SHARED HOME APPRECIATION CONTRACTS AND METHODS FOR SECURITIZING SAME

摘要

A method for creating and selling a contract that provides equity participation to an investor in a homeowner's residential real estate property. A contract is executed between the homeowner and an originator in which the mortgage originator purchases an equity portion of the residential real estate property from the homeowner. In connection with the purchasing, the homeowner grants a lien on the homeowner's residential real estate property to the originator in order to secure a future payment obligation of the homeowner. The future payment obligation has an amount that is determined in accordance with a value of the purchased equity portion of the homeowner's residential real property at a time of the future payment. A security is created by pooling the contract with other contracts sold to a plurality of other homeowners each of whom owns at least one of a plurality of residential real estate properties, and selling the security to an institutional investor in a secondary market. The security provides that, upon a sale of each given residential real estate property, the institutional investor has a right to receive a payment corresponding to the value of the purchased equity portion of the given residential real property at the time of the sale.