Company Aims to Insure Against Home Value Loss

Following months of development a group of Fortune 100 executives have launched Working Equity Inc. and its signature insurance product, which is aimed at providing homeowners with a form of future home value protection. The product, Equity Protection, is tied to the First American CoreLogic Inc. Index. It is priced two ways: as lifelong protection for 1% of the home's value, or as a monthly payment option at $20 for every $100,000. Working Equity Inc. co-founder Craig Schmeizer told MortgageWire the company is in the process of negotiating with five major insurers he would not disclose, who are expected to serve as reinsurers. "Reinsurance is helpful in the event the market has a significant shock, but the nature of the product does not create risk of that to our business for ... years. We do fully manage the primary risk on the product. We actually retain and manage the risk as an insurance company would. We only use reinsurance as a supplement to our ability to support risk." He added, "Our reserves, such as the fees and premiums we collect, are maintained in a reserve managed by Merrill Lynch, so it is managed by a third party." Mr. Schmeizer said the insurance provides homeowners the type of protection available to lenders through mortgage insurance. Anyone can purchase it independent of his or her mortgage, he said. The concept was originally introduced in military housing where it has been successfully used for years, he said.