WELCOME TO

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WELCOME TO
The Leader In Real Estate Risk Solutions
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EquityLock Financial is a privately owned
corporation led by a team of sophisticated
financial executives with years of experience in
banking, law, financial planning, real estate
analysis, real estate investing and marketing.
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The Company was founded in early 2007. The
intent of the organization is to provide
innovative solutions to help reduce real estate
risk through a variety of instruments. For two
years the EquityLock Financial founders focused
on developing a product with the appropriate
infrastructure and risk aversion to offer the
average homeowner the ability to protect
themselves against losses in equity when their
home is re-sold. .
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The company launched Home Price Protection early
August of 2008. Currently offered through
Builders, Developers, Mortgage Companies and
Insurance Companies, Home Price Protection can be
purchased in all 50 states. The company has
over 50 Strategic Partner Sales Outlets at local
levels nationally including well known brands
like favoriteagent.com, Keller Williams Realty,
ColdWell Banker and mortgagetoday.com.
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EQUITYLOCK FINANCIAL is the first company in
the US to offer a contract that protects a home
owners financial interest in real estate
against market downturns
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Evolution of the Concept Early 1990s academic
Economists publicize need for housing risk tools
in academic articles. 2002
pilot/non-profit City of Syracuse establishes
home value protection concept to fight against
ongoing house declines. 2007
commercialization A few large builders begin to
guarantee pricing of developments.
EQUITYLOCK FINANCIAL FOUNDED
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• The Company Vision
• Establish a name in the real estate industry of
  respect and trust.
• Dominate industry need for the product.

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HOME PRICE PROTECTIONTM
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EquityLock Financial Home Price ProtectionTM is
a revolutionary contract that protects a
homeowners' equity in the event of a real estate
market decline.
With most investments, there are ways to hedge,
or reduce the risk of loss. To date, nothing has
ever been offered to protect homeowners in their
number 1 investment.
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A Home Price Protection Contract is an
agreement between a homeowner and EquityLock
Financial that entitles the homeowner to a cash
payment when their home is sold.
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Home Price Protection pays the owner upon
resale of the property to the extent that a
geographically-defined index of housing prices
decreases from its level at the time the contract
was first purchased.
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Each Home Price Protection contract refers to a
relevant House Price Index (an aggregate of
local housing prices). If the index has
dropped at the time the house is sold,
EquityLock will pay the homeowner the
percentage of the index drop multiplied by the
value of the home at the time of the Home Price
Protection contract.
Contract Index 100 New Index 90
Change 10
Home Value at Contract 200,000 200,000 x 10
20,000 Claim

• Homeowners do not qualify for a claim in the
  event of
• Natural disaster resulting in devastation of the
  home.
• Foreclosures
• Resale's that are not at arms length. No relative
  sales. Closings will be verified.

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The EquityLock Home Price Protection contract
is designed to be able to pay homeowners in a
declining market whether one local market or the
real estate markets on a national level are in
decline.
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Home Price Protection is available for any whole
ownership real estate products.

• Single Family
• Townhomes
• Condos
• Lots

It does not matter how long the home has been
owned. 6 months.60 years Or in escrow for
closing Any Homeowner or Home Buyer Can
Qualify!
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Below are a few examples of how Home Price
Protection contracts would pay customers (or
expire) in particular situations. Example In
2008, Mr. Jones purchases a home for 300,000 and
an EquityLock Home Price Protection contract for
4,500. The local index at the time is 100. In
2011, 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
index in his area is 105. Mr. Jones sells him
home for a profit and the Home Price Protection
contract terminates with no value. Scenario
B Mr. Jones sells the home for 290,000 and the
local index has fallen to 90. EquityLock
Financial pays Mr. Jones 30,000 at the time of
sale (the local index fell 10 therefore a
payment of 10 of the original purchase price is
paid). Scenario C Mr. Jones sells the home
for 350,000 and the local index has fallen to
90. Mr. Jones receives a payment of 30,000, even
though he did not lose money on the home. (The
local index fell 10 therefore, a payment of 10
of the original purchase price is paid.) Below
is a table summarizing the previous scenarios
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What kind of a Product is this? Is this
Insurance? No. A homeowner does not have an
insurable interest in the market index.
See NY General Counsel Opinion 5-1-2002 (2).
Compare also weather derivatives which is not
regulated for lack of insurable
interest. Is this an Investment? No. It is
not entered into with the attempt to make
money. It is a private contract a risk
reduction tool unregulated by the State or
Federal Governments.
The transaction is structured as a contract, and
not as an insurance policy therefore the payment
is made if the market index falls, regardless of
whether you sell the home for more or less than
what was paid for it.
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How Home Price Protection Works
Premium Pricing Contracts will be underwritten
individually and typically priced between 1.5
and 3 of the home value. The average contract
price is approximately 2. Individual market
characteristics will determine the contract
price. Various factors impact the price of a
contract, including prior home ownership history
employment history family status whether the
home is the primary or secondary residence, owner
occupied or not, etc. Geographic and market
considerations are based on industry and our
proprietary analysis of the market. In addition,
there may be limits on how many Home Price
Protection contracts EquityLock Financial will
enter into in a specific area. Exclusion and
Limitations Coverage is effective 18 to 36
months after purchase (depending on
geographic/market considerations) and continues
for a period of 15 years. Homeowners will have
the right to collect payment if they have paid
the contract premium they sell their home within
a 15-year period and if on the day the home is
sold the homes area index is less than 100 of
the value of the original agreement date. They
may not collect a payment if the sale of the home
was to a related party.
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• How to Pay for It
• The ultimate goal is to establish a real estate
  industry where a HPP product is offered via the
  Seller, in most all circumstances (see Strategic
  Partner and Bulk Sale Section) In this scenario
  the premium is paid for by
• The Builder or Developer
• The Realtor
• The Seller of a home
• The Mortgage Company
• Rolled into the mortgage

In many circumstances the Homeowner will need to
cover the cost of the premium.
Make a one time payment. Finance it
through EquityLock Financial. Use
your homes equity. Pay with a credit
card.
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• How much does it cost
• A Home Price Protection Contract typically cost
  anywhere from 1.5 to 3 of the current value of
  the subject home. In some circumstance premiums
  can be lower or higher depending on the
  individual circumstance and location of the home.
  
• Two Important Factors of Establishing a
  Premium.
• Volatility of the homes market.
• Terms associated with the contract

Understanding market risk is vital to the
underwriting process. All premiums are paid in
full at closing of the HPP contract unless
financing or other arrangements have been made.
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What is a House Price Index (HPI)?
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Each Home Price Protection contract refers to a
relevant House Price Index.
What is a HPI or Market Index?
A market index is an unbiased, structured
methodology which measures the relative health of
the local and national real estate markets.
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There are a number of established market indexes
published by government and private
organizations. EquityLock Financial currently
uses the Government established House Price Index
(HPI) as its constant source for measuring real
estate market health and as a means to tie a Home
Price Protection contract against. The HPI data
is refreshed quarterly at the Local Level and
monthly at the state level and national level.

• Other Indexes which can be researched
• Case Schiller
• NAR
• Luxury Homes

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All Home Price Index information can be accessed
by going to www.OFHEO.gov and exploring the HPI
sections.

• Go to House Price Index Dropdown
• Select Downloadable HPI Data
• Select
• 3Q 2008 Manipulatable Data for the
  Metropolitan Statistical Areas
  (MSAs)(Excel Format)

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Sample of a HPI Local Market Fluctuation
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Why use a Market Index for the HPP contract?
Objectivity because the market index is
established and regulated by government and
industry professionals it represents a true way
to measure the health of a particular market. The
companys objective is to protect a homeowner in
the event of a true loss in value due to market
conditions, not negligence.
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• A Home Price Protection Agreement does not
• negate the responsibility of the homeowner to
• Negotiate and buy their home at the right
  price!
• Maintain the home and keep it in marketable
  order!
• Sell at fair market value!

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Equity Lock has left itself open to adjust the
Market Index used for a homeowner in any given
market. EquityLock has intentions of creating
its own proprietary index in the future which
will use an aggregate of current home sales in a
immediate area defined by a certain radius.
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Why is HPP important in today's Real Estate
Market?
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The Need The Cyclical Real Estate Market For
most people, their home is their biggest
investment. If their market crashes, so can the
equity in their home and along with it, their
plans for retirement, childrens education, and
so on. The common perception is that real estate
always appreciates. Overall, it is true that real
estate tends to appreciate some. But as recent
events underscore, rising real estate values are
not inevitable. And, even when real estate values
increase overall, there are hundreds of real
estate markets in the U.S. and some decline from
time to time. The question to be asked is when
you want or are forced to sell your home, for any
reason, where will the market be? Even in an
appreciating market, buyers can experience
significant increases and decreases in the value
of their home. By mid-2008 the majority of
housing markets in the U.S. were overvalued, with
a sluggish real estate market projected for years
to come. As a home represents the largest asset
for more homeowners, a market drop can have
devastating consequences.
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The Threat of Financial Loss to Homeowners in
Today's Market? Catastrophic U.S. is in the
worst market since the Depression. Housing
Declines on a National Level. Expected Losses
range from 1 to 40 before recovery.
There are NO immune markets!
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Most All U.S. Markets Expected to Decline through
2017 and Beyond
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Why home values may take decades to recover!
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So far, home values nationally have tumbled an
average of 19 from their peak. As bad as that
is, prices would need to fall at least 17 more
to reach their traditional relationship to
household income, according to a USA TODAY
analysis of home prices since 1950. In that
scenario, a 300,000 house in 2006 could be worth
about 200,000 when real estate prices hit bottom.
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Nationally, the typical existing home was worth
roughly the same in 2000 as it was in 1950, after
adjusting for inflation, according to Yale
University economist Robert Shiller.
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Sample of Top 100 Markets to Decline
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70 of Markets Expected to Decline through
2013.others beyond
Projections based on historical results of Office
of Federal Housing and Employment Office (OFHEO)
and the National Association of Realtors (NAR).
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Claims and Reserve Management
Reserves Management Strategies Company policy is
to maintain sufficient Reserves to satisfy Payout
Obligations that could result under even an
extreme and widespread downturn in the real
estate market. The Company does this by
establishing initial Reserves adequate for a
Catastrophic Payout Level, and by managing the
investment of those Reserves to preserve capital
while pursuing long-term, conservative growth.
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• How We Manage Reserves and Pay Claims
• 53 of gross revenue is immediately placed in a
  3rd party custodial account.
• Our custodial account is managed by Chase Bank.
• These funds are tax deferred and can not be used
  for any other purpose other than to pay claims.
• The company operates on a transparency concept.
  Anyone at anytime can view the account balance.
• Quarterly reports will be issued, advising all
  contract holders of the current balance, recent
  claim payments and the projected balance in the
  forthcoming quarter.

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• How We Pay Claims (contd)
• The 53 is reserved assuming that 100 of our
  projected contracts were to de-value by 51 in
  the future.
• Each home and each market is individually
  reviewed for approval, in order to asses risk
  exposure.
• Nationwide diversification.
• Down markets are offset by up markets.
• Constant monitoring of portfolio allows us to
  balance and to offset within negatively
  correlated markets.
• Some catastrophic markets are excluded. Based
  on the history of volatility.
• Pricing and market projections are based on
  analysis of sophisticated, proprietary market
  data.
• Ability to bundle our contracts and hedge
  against the institutional market.
• On a selected basis re-insurance is available
  which is guaranteed by a 3rd party insurance
  company.
• We target markets that are forecasted to incur
  losses of no more than 20 however we reserve
  for more than 200 of that amount.