The following report provides an overview of a Home Value Protection (HVP) product to evaluate the practicality of making such a program more widely available and provide background for anyone considering such a plan. The paper is based largely on the Home Value Protection product established in Syracuse New York in 2002, and a number of the authors of this paper participated in the establishment of the Syracuse Home Value Protection program.
The paper contains four sections:
1: Investor Outreach
This section provides background information about the Syracuse program, the current and potential participants and what roles they might play, a review of a few of the ways such a program could be implemented, and links to various media coverage.
2: Index Research
The Syracuse program measured changes in house values by a real estate index for the area (rather than individual house sale price), and this section evaluates a number of different index methods using four markets historical data to see how well the different indexes would have performed with a HVP product (had it been available).
3: Capital Requirements & Pricing
This section provides a model for estimating the pricing requirements and capital required for a program across multiple markets. While not exhaustive, this approach will provide a useful reference and starting point for anyone evaluating investment in such a program.
4: Regulatory Environment
This section provides information on some of the regulatory entities across the markets used in the analysis. Due to the variations in the way a HVP product could be implemented, regulations could apply in a variety of ways and this section can only offer a starting point for potential investors or participants.
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