Home Diversified Mortgage Needs National Platform for Scaling Up
News related to:Home Diversified Solutions Corp · 1 min read
Home Diversified Solutions Corp. announced today that a new article by Marc Biron, MBA, CFA, and Steven L. Siegel, DBA, published in Chrisman Commentary, highlights the critical need for a national mortgage platform to bring the company's innovative Home Diversified Mortgage to market at scale.
The Home Diversified Mortgage is designed to allow homeowners to exchange the price performance of an individual property for the performance of a diversified pool of homes. This approach aims to reduce exposure to the performance of a single home and local housing market while maintaining ownership of the property. According to Biron, the chief executive officer of Home Diversified Solutions Corp., the product could offer zero-down financing without traditional private mortgage insurance and appeal to financially strong borrowers seeking to preserve liquidity and reduce local market exposure.
Research by Biron and Michael J. Seiler, published in Real Estate Finance in 2022 and based on more than one million Freddie Mac loans originated between 1999 and 2020, showed materially lower expected credit losses for a zero-down Home Diversified Mortgage compared to conventional mortgage structures.
The article also highlights the potential role of residential real estate brokers and agents as a national distribution channel once an executable mortgage product is established. Real estate professionals interact with consumers at the point when they are deciding whether to purchase a home and how to finance it, potentially creating a scalable channel for introducing a differentiated mortgage product.
Home Diversified Solutions is currently exploring relationships with lenders, secondary-market participants, and other institutions that could help develop and distribute the Home Diversified Mortgage nationally.
Important regulatory questions remain unresolved. The company has not yet obtained a formal legal opinion determining the classification of the Home Diversified agreement or the eligibility of mortgages paired with the agreement for purchase by Fannie Mae or Freddie Mac. Independent actuarial validation will also be required before institutional commercialization.