Northeast Ohio man touts home-price protection

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By Karl Henkel

A Northeast Ohio man has reached a breakthrough in his effort to curb the side effects of the housing crisis.

Ted Rusinoff, president of Colorado-based EquityLock Solutions and a Hudson native, says his company’s home-price protection policy can help offset any further losses in home values.

“Most believe you buy homeowners insurance when you buy a home,” Rusinoff said. “But you’re four times more likely to lose money on market value than a fire or theft or casualty loss.”

The protection policy works like this: a home-owner buys the protection policy for about 2 percent of his or her home’s current value. That home-owner can pay the entire cost up front or defer the payments monthly.

The protection is available throughout the country.

The protection value is then based on the local house-price index, a figure calculated by the Federal Housing Finance Agency.

The current house-price index and the value of the home — for example, $100,000 — sets the baseline.

If the house-price index drops to 95, EquityLock Solutions will pay the homeowner 5 percent of the baseline price, in this case $5,000.

If the house-price index drops to 90, EquityLock will pay 10 percent, or $10,000.

If the homeowner is able to profit off a sale but the house-price index still declined since the original purchase, the company will still pay the requisite percent of the baseline price.

To receive the protection payments, a homeowner must sell his or her house but cannot do so within two years of the start of the contract to prevent the “flipping” of houses, Rusinoff said.

The contract is valid for 15 years.

If the house-price index stays consistent or increases, the contract does not have any value.

In the Mahoning Valley, the house-price index in 2011’s third quarter was minus 2.71. The Valley has had a negative HPI in 12 of the past 13 quarters.

But after a devastating burst in the housing bubble just a few years ago, can EquityLock’s business model last through another housing- value deterioration?

Rusinoff says it can, because the company based its business model on previous housing trends.

“As a homeowner, I know that I might want to move, but the market might stop me,” Rusinoff said “The product [or home-price protection] takes away that concern.”

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