Home Diversification Corp., a startup Fintech financial product provider, today announced that it will begin selling its signature solution for the newly established Home Diversification Industry (HD) in the 3rd-quarter of this year. Their product – Home Diversification Agreement – will be made available to industry partners and the general public at that time.
The HDC Agreement enables homeowners to switch their volatile local-market home price value (typically 72-percent more volatile) for that of a broader and more stable countrywide home price index. This new product is designed to reduce risk for all stakeholders and provide much needed stability to the housing finance system.
The HD concept is currently undergoing a rigorous study by a highly-regarded industry research organization, the purpose of which is to determine validity and to quantify the percent of risk reduction for lenders and homeowners.
The company obtained previous validation of this approach and their product through an extensive internal study and that of a well-respected academic institution (Cornell University), in addition to a tremendous amount of back testing and analysis.
The HDC Agreement marks the first time ever homeowners have been able to diversify and reduce price risk for what is typically their single-most consolidated asset – their home. Home equity value (price) and foreclosure risk are reduced up to 40-percent. And systemic credit-loss risk for lenders is reduced up to 70-percent.
Having founded the concept of home diversification, HDC plans to lead the new market with a series of signature solutions, including standard home diversification for new and existing homeowners, as well as high LTV/"low" to "no down" products for new buyers that work in conjunction with mortgage insurance, or provide "stand-alone" credit enhancement for non-QM/PLS customers.
"We've talked with influential groups and individuals throughout the home finance industry and they all agree that the concept of home diversification will transform the market for both homeowners and lenders," states Marc Biron, HDC founder and CEO. "Most wonder why this has never been introduced in the past. Without doubt, this new home diversification product is the most important financial innovation since securitization."
"Home diversification will become a standard component on the homeownership checklist, along with inspections, appraisals, mortgages, home insurance and the like," adds HDC President David Margulies, a 30-yr plus veteran of the mortgage finance industry. "Our product is going to be a shot in the arm for players across the spectrum seeking to differentiate and gain share in the incredibly competitive home finance space."
