Risk Reduction Mortgage Corp
The Right Mortgage
For The Modern Economy
To see how the Risk Reduction Mortgage would perform over the last 20 years in your local market, enter your zip code here
Most homeowners don't realize the massive financial risk they face due to mortgage default/foreclosure. They think: it won't happen to me.
The primary reasons homeowners lose their home in foreclosure are:
  • Negative equity where home value falls below the mortgage balance. Our product reduces this risk by approximately 40% on average.
  • Inability to make monthly mortgage payment due to a personal crisis such as job loss, divorce, significant health issue or death. With our product, we will make the monthly payment for you in these financial distress situations from any positive cash balance you might have per our contract only in the event your local housing market underperforms a national average – just when you need it most.
Our product eliminates the high level of home price volatility from your local market – and allows the value of your home to be based on the national average. No matter how wildly home prices swing in your local market, your home value will stay within the much narrower range of the national average.
This is similar to what investors do when they put money into an index or mutual fund rather than individual stocks. Financially, all investors should diversify, and so too should all homeowners. Diversification mathematically improves your expected return-on-risk equation.
If you are taking out a new mortgage or refinancing, as a result of the significantly reduced risk with our risk reduction plan, you will be able to obtain a reduction in interest rate of up to 1/8%, amounting to a savings of more than $6,500 over the life of a typical 30-year $250,000 mortgage. Or, more importantly for most borrowers, you will be able to lower your down payment to as low as 5% without expensive mortgage insurance or piggyback second mortgages, saving you thousands of dollars annually. Also, when you refinance you can take more cash out.

From one basket…

… to many baskets.

Your home’s value is also determined by other things in addition to local market conditions, such as any improvements you’ve made and how well you’ve maintained it. Those are specific to your home, and are not affected by our product.

Here's how it works. If you buy a Risk Reduction Plan from us, it will have a value that’s updated monthly based on how your local real estate market performs relative to the national average. Your value may fluctuate - up or down – by an amount that is the DIFFERENCE between your local home price index and a nationally diversified home price index. Here's how it works. If you buy a Risk Reduction Plan from us, it will have a value that’s updated monthly based on how your local real estate market performs relative to the national average. Your value may fluctuate - up or down – by an amount that is the DIFFERENCE between your local home price index and a nationally diversified home price index.
To illustrate, if your local market underperforms a national home price index, you will be paid the difference at the sale of your home (or mortgage payments can be made during periods of financial distress), just when you need it most. Conversely, If your local market outperforms a national average, you will pay the amount of the outperformance at the sale of your home, essentially offsetting your outperformance.To illustrate, if your local market underperforms a national home price index, you will be paid the difference at the sale of your home (or mortgage payments can be made during periods of financial distress), just when you need it most. Conversely, If your local market outperforms a national average, you will pay the amount of the outperformance at the sale of your home, essentially offsetting your outperformance.
You can think of this as an insurance policy. During the recent real estate crash, the national home price index declined 27% from August, 2006 to its lowest point in February, 2012, but the home price indices in many metro areas fell much further. For example Phoenix fell 54%, Las Vegas fell by a whopping 62%, Tampa by 48%, Miami by 50%, San Francisco by 43%, San Diego by 40%, and Los Angeles by 42%. This problem was not limited to Sunbelt and coastal cities – even traditionally stable markets in the Midwest experienced larger than average declines – Chicago declined by 37%, Detroit by 43%, and Minneapolis by 37%. If people in any of those metro areas owned a Risk Reduction Plan, their loss due to the market (not including any factors specific to their home) would have been limited to that of a nationally diversified index. Millions of foreclosures and much pain would have been avoided had Risk Reduction Mortgages been widely available before the last real estate crash -- and even during typical real estate markets like we are in now. You can think of this as an insurance policy. During the recent real estate crash, the national home price index declined 27% from August, 2006 to its lowest point in February, 2012, but the home price indices in many metro areas fell much further. For example Phoenix fell 54%, Las Vegas fell by a whopping 62%, Tampa by 48%, Miami by 50%, San Francisco by 43%, San Diego by 40%, and Los Angeles by 42%. This problem was not limited to Sunbelt and coastal cities – even traditionally stable markets in the Midwest experienced larger than average declines – Chicago declined by 37%, Detroit by 43%, and Minneapolis by 37%. If people in any of those metro areas owned a Risk Reduction Plan, their loss due to the market (not including any factors specific to their home) would have been limited to that of a nationally diversified index. Millions of foreclosures and much pain would have been avoided had Risk Reduction Mortgages been widely available before the last real estate crash -- and even during typical real estate markets like we are in now.
We all insure our health, home and auto to protect these assets. Why not also protect your largest investment? The primary difference between insurance and our diversification plan is that insurance simply transfers risk whereas our plan significantly reduces overall risk. We all insure our health, home and auto to protect these assets. Why not also protect your largest investment? The primary difference between insurance and our diversification plan is that insurance simply transfers risk whereas our plan significantly reduces overall risk.
The risk reduction value proposition is stunning. The value added is estimated at more than 1% of your home value after nominal fees. That’s more than $3,000 per year in added value for a typical $300,000 home. The logic is that if you take less risk in your home value, you can take more risk in your investments and maintain the same level of risk to your overall net worth. If you take more risk in your investments, you would expect to earn higher returns. The value added from diversification is simply a calculation of the expected additional earnings in your investments if you transfer the reduction in risk. Whether you do or not is up to you, but the economic value added is simply a measurement of the value of diversification benefit commonly used in the financial services industry. It may sound too good to be true, but this is why diversification benefit has be termed “the only free lunch in Economics.” The risk reduction value proposition is stunning. The value added is estimated at more than 1% of your home value after nominal fees. That’s more than $3,000 per year in added value for a typical $300,000 home. The logic is that if you take less risk in your home value, you can take more risk in your investments and maintain the same level of risk to your overall net worth. If you take more risk in your investments, you would expect to earn higher returns. The value added from diversification is simply a calculation of the expected additional earnings in your investments if you transfer the reduction in risk. Whether you do or not is up to you, but the economic value added is simply a measurement of the value of diversification benefit commonly used in the financial services industry. It may sound too good to be true, but this is why diversification benefit has be termed “the only free lunch in Economics.”
You can diversify your home value, secured by a home lien, for just 0.06% of your home value annually ($15 per month on a $300,000 home).You can diversify your home value, secured by a home lien, for just 0.06% of your home value annually ($15 per month on a $300,000 home).
The Risk Reduction Mortgage is coming to all 50 US states in 2019, backed by an array of investors, and with a limited number of homeowners invited to be a part of our first national portfolio. Enter your contact information below to reserve your option to be a part of the first true diversification option in housing finance.
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