EquityLock Solutions offers Home Price Protection (HPP) contracts that compensate homeowners if local real estate values decline when they sell their home. HPP benefits various real estate and financial institutions. It allows faster sale of foreclosed homes and higher prices, and helps manage risks for mortgage-backed securities. HPP contracts are based on a national home price index and pay out a percentage of the original home value equal to any drop in the index since purchase. EquityLock ensures it can pay claims through actuarial review and purchasing insurance from its affiliate Equity Assurance Company.

1. EquityLock Solutions, Inc.
Company and Product Overview
Background – EquityLock Solutions is a financial services company offering property owners protection against future
declines in real estate market values through its innovative Home Price Protection® product. In sum, HPP compensates
a property owner in the event of a real estate market decline when the property owner sells the home, and in essence
helps to protect equity. If the House Price Index is lower than it was when the contract was purchased, the contract
holder is entitled to a payment equal to the contract value multiplied by the percentage drop in the index.
HPP benefits the activities of REALTORS, relocation companies, mortgage originators, builders, investors, banks and
financial institutions and non-profit entities.
HPP benefits institutional clients (servicers, banks, asset managers, etc.) because it:
▪ Permits the sale of REO faster and at a higher price
▪ Functions as a hedge tool to protect values when modified loans eventually re-default
▪ Allows impaired and non-performing asset reserves to be reduced and redeployed as capital
▪ Lowers the required credit enhancement for RMBS issuers, thereby increasing deal proceeds
The Product – The Company’s product offering is the Home Price Protection® contract which offers homeowners
protection against declining property values:
▪ The EquityLock contract is based on a nationally accepted, geographically defined index of residential real
estate values issued quarterly by the Federal Housing Finance Agency
▪ If an EquityLock contract holder sells the home, and the index is lower than it was when the contract was
purchased, the contract holder is entitled to a payment equal to the value of the home when the contract was
purchased multiplied by the percentage drop in the index
How it Works – The Company’s product is structured as a pure index contract and is not an insurance policy;
payment of claims is based solely on the performance of the House Price Index and not on the actual gain or loss
personally experienced by the property owner
▪ EquityLock Solutions uses the House Price Index (“HPI”) provided by the Federal Housing Finance Agency
(available at www.FHFA.gov) as the baseline metric used to track changes in home values for claim calculations
▪ The claim payment is made if the HPI falls, regardless of the price at which the home is sold and regardless of
the appraised value of the home – the payable claim will be equal to the percentage of negative change in HPI
times the notional amount of the contract
Surety – Although Home Price Protection® is not insurance, it is important to provide consumers with the confidence
of capital behind the financial promise of ability-to-pay claims.
▪ EquityLock Solutions does not issue insurance, but it does insure its own financial risk of loss through an
affiliate, Equity Assurance Company
▪ Both EquityLock and Equity Assurance underwent months of extensive actuarial review and stress testing
▪ The Company’s underwriting and risk management models were developed to ensure sustainability, profitability
and the ability to pay claims regardless of regional/local market deterioration
▪ The insurance license was granted by the Washington, D.C. Insurance Commissioner in November, 2010, and
EquityLock’s insurance of its liabilities stemming from Home Price Protection® was approved by the Washington,
D.C. Insurance Commissioner in March, 2011
▪ The actuarial examination study that quantified the risk reserve requirement has been reviewed and approved
by the Washington D.C. Insurance Commission and was further vetted during the Wall Street Venture Capital
investment process; all of the resulting documentation / back-testing is available for review
EquityLock Solutions® Protect Your Property's Value at Today's Price with Home Price Protection®
8400 East Prentice Avenue, Suite 660
Greenwood Village, CO 80111

2. Examples – In 2011, Mr. Jones purchases a home for $300,000 and an EquityLock Home Price Protection® contract
for $5,700 (1.90% of the home price). The local House Price Index at the time is 100. In 2014, Mr. Jones sells the
home under one of the following potential scenarios:
▪ Scenario A: Mr. Jones sells the home for $350,000 and the local House Price Index in his area is 105. He sells
his home for a profit and the Home Price Protection® contract terminates with no payout on EquityLock’s part
because the index has increased from 100 to 105.
▪ Scenario B: Mr. Jones sells the home for $250,000 and the local House Price Index has fallen to 80.
EquityLock pays him $60,000 at the time of sale (the local House Price Index has declined by 20%; therefore,
a payment of 20% of the original value of $300,000 is paid).
▪ Scenario C: Mr. Jones sells the home for $325,000 and the local House Price Index has fallen to 90. He
receives a payment from EquityLock of $30,000 even though he made a $25,000 profit on the home sale. The
local Index fell 10%; therefore, a payment of 10% of the original value is paid.
Re sa le P ric e G a in / Loss on P ric e Inde x P a yout O n Le ss: Cost of Ne t P rope rty
S c e na rio
in 2 0 14 S a le o f House Cha nge Contra c t HP P Con tra c t O wne r P o sition
A $350,000 $50,000 +5% $0 -$5,700 $344,300
B $250,000 -$50,000 -20% $60,000 -$5,700 $304,300
C $325,000 $25,000 -10% $30,000 -$5,700 $349,300
Product Basics
Feature Description
Protection Tenor 15 Years
Lockout Period No claims paid within 24 Months of contract start date
Property sales must be on arm's length terms to an unrelated party; claim terms for RMBS
Claim Terms
structures under review
Standard Contract is 20% of Property's Initial Value; custom risk coverage packaging
Coverage
available
Property Types Primary residences, second homes, non-owner occupied and multifamily up to 49 units
Portfolio and Institutional pricing is based on property and loan metrics including: loan
Premium Sizing status; property type; property value; occupancy type (owner occupied, rental, lease-to-
own, etc.); and geography
1.75% to 3.00% Financing available; HPP RMBS pricing paid as an ongoing cost of deal
Pricing Terms
waterfall
Reference Terms House Price Index issued by the Federal Housing Finance Agency (www.fhfa.gov)
Additional Information Sample contract and premium sizing available on request
Pricing – Protection agreements are individually underwritten and typically priced between 1.75% and 3.00% of the
asset values comprising a given pool, with a national average price of 1.90%
▪ A number of factors impact the price of a protection agreement and are based on both individual
considerations and geographic/market considerations, including: prior home ownership history, primary or
secondary residence status, owner occupancy type, etc.
▪ Geographic and market considerations are based on industry data and the Company’s proprietary analysis of
the market
▪ Final pricing for a given pool of assets is a risk-based pricing exercise that evaluates and combines the qualities
and disadvantages of each individual asset in a pool of assets being reviewed
▪ States with notorious recent declines in housing values (Nevada, Florida and Arizona) are not necessarily
adverse locales that will drive a higher price in today’s model
EquityLock Solutions® Protect Your Property's Value at Today's Price with Home Price Protection®
8400 East Prentice Avenue, Suite 660
Greenwood Village, CO 80111