Equity Sharing, Loan Modification Service Unveiled

Technology provider ISGN Corp. is partnering with EquityRock, a company with experience in residential real estate equity sharing, to create RESET, a loss mitigation solution for lenders. The product's creators say they can help lenders reduce losses from properties in imminent danger of foreclosure, while also keeping the borrower in the property. RESET (Real Estate Shared Equity Transaction) gives a borrower who is qualified for a loan modification a principal reduction in exchange for a share in equity with their lender. With RESET, in addition to modifying or refinancing the borrower's mortgage, the lender writes down the borrower's principal balance so that the borrower no longer owes more than the property is worth, ensuring they have equity in their property, says ISGN. As part of the transaction, the lender will gain a stake in any future appreciation should the property be sold or refinanced. When the transaction is complete, the borrower gets to stay in the home and keeps a monetary stake in the property. A key feature of RESET is a fair, debt-for-equity exchange that benefits both the lender and the homeowner. The service can be used by lenders and investors, as well as by housing finance agencies in support of the Treasury Department's Help for the Hardest-Hit Housing Markets (4HM) program. An estimated 3.7 million homeowners across the five states targeted by 4HM have negative equity with loan to value ratios that exceed 125%.