Product Developed to Protect Borrowers Home Values

image Working Equity released an interesting solution that allows homeowners to protect 100% of the value of their home even while real estate values fluctuates said a company statement.   

"We saw an immediate, pressing need for products that protect homeowners given the tremendous loss of wealth caused by the devastation in the national housing market," said Craig Schmeizer, Co-Founder of Working Equity, Inc.

Developed by a group of Fortune 100 executives, homeowners who purchase Equity Protection will receive a payment equal to their home value multiplied by the percentage decline in their local housing index.

The company offers two protection products:

  • Lifetime Protection is available for existing home owners, new home buyers or home sellers as an affordable way to remove the risk of loss due to declining market conditions. With Equity Protection, 100% of a home’s market value is protected for as long as the customer owns the home. The Lifetime product can be paid for as an easy part of a home closing, or as a single payment for as little as 1% of a home’s price.
  • Flexible Term Protection is perfect for existing home owners or new home buyers that are concerned about changes in the housing market and want an easy and affordable way to immediately protect against market declines, achieve stability until markets normalize, or for as long as they feel protection is needed. The product protects 100% of a home’s market value for as long as it is maintained, and can be cancelled at any time. For a typical home, flexible term protection is available for as little as $35 per month, depending on the local housing market.

As an example, if you own a home valued at $250,000 and purchase Equity Protection with a local housing market index of 100 at the time of purchase, the following scenarios could happen.

Scenario A: You sell your home for $225,000 – a $25,000 loss:
At the time of sale, the local market index is 90, a 10% decline. Since the local housing market index is down, you receive an Equity Protection Payment of $25,000.

Scenario B: You sell your home for $265,00 – a $15,000 profit:
At the time of sale, the local market index is 95, a 5% decline. You still receive an Equity Protection payment of $12,500 since the local housing market index is down when you sell.

Scenario C: You sell your home for $265,000 – a $15,000 profit:
At the time of sale, the local market index is 110, a 10% increase. Since the local housing market index is higher, the Equity Protection contract terminates with no payment.

You can run your own scenario at the link below.

Equity Protection

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