Nationally new mortgage originations and refinancing  continue to slow, but not all loans are created equal.  Our lending partners have figured out a way to differentiate themselves, some increasing new purchase loans by more than 40% (case study below).  EquityLock FIRST not only makes you stand out for new purchase business, but it eliminates refinance objections.  FIRST  provides your borrowers peace of mind from unforeseen situations that might have otherwise caused them to sell their home prematurely.  To learn how you can increase your mortgage business and become one of our partners, contact us at 1-800-401-9290.


In the middle of 2013 and during a difficult and evolving mortgage market, a Chicago suburb based mortgage lender, 1st Advantage Mortgage (1AM) partnered with the Denver-based EquityLock Solutions to create a product sponsored by 1AM and was made available to their customers when securing a new mortgage. During the months that followed, traditional refinance business for mortgage origination companies continued to decline and new business opportunities would have to be cultivated from traditional sources of new purchase mortgages.

Given the mortgage market, these traditional sources would have a large number of fairly commoditized options. The typical mortgage loan originator would have a hard time differentiating their 30 year fixed mortgage offer from all other offers when the rates were identical and lending standards have become more uniform and regulated. However, 1AM empowered their loan originators to stand out and help attract new business by offering home market protection.

With their partnership with EquityLock, 1AM private labeled EquityLock FIRST and began including the product on all new mortgage business, a free benefit to its customers to provide home value protection. This benefit provides two significant benefits to 1AM in the market. Paul Lueken, president of 1AM, has used the product as a significant way to differentiate their offering to potential new loan originators. In order to grow, and recognizing that each loan originator will generate a finite number of mortgages, Lueken has used this benefit to help increase the number and quality of the loan originators that are affiliated with 1AM. When a loan originator understands the value of this benefit, the second significant effect becomes apparent. New purchase mortgage business grows from the efforts of those loan originators recruiting more referral sources who recognize the difference between a mortgage like everyone else’s and one that has similar rates and terms with an added benefit that provides greater value to the homeowner. These originators were able to make it simple – a mortgage with the same rates and terms that protects the homeowner versus one that doesn’t.

Local home prices have stabilized, but this Chicago lender is continuing to court homeowners bracing for another downturn, offering mortgages that come with protection against falling prices, because it is working.

After 14 months of deploying this program within their organization, 1AM has seen significantly improved results. Month over month new purchase loans have increased by more than 40%, while the new purchase mortgage opportunities have remained relatively flat within the industry. See Exhibit 1. These results directly correlate to 1AM’s ability to differentiate themselves in their market. Recruiting more quality loan originators and attracting more new purchase mortgage business combines to grow good business in all mortgage lending operations.

Exhibit 1. (Above)

“We protect the people who need it most: the homeowner who doesn’t understand the bigger market and macroeconomics of real estate,” said EquityLock CEO Ted Rusinoff. “The more competitive the mortgage market gets, the more mortgage companies want to distinguish themselves.”

1st Advantage has placed hundreds of Value Guard loans since introducing them at the beginning of May 2013. Borrowers can also buy extended protection for 15 years by paying 1.75 percent of the equity that they want to cover – protection for another $100,000, for instance would cost $1,750.

“I truly believe that my sales force gets picked more often on loans that wouldn’t have been picked before,” Mr. Lueken said. “This is the deciding factor, we don’t make any money on this.”

Value Guard would have hardly gathered attention a decade ago when home values were soaring. 1st Advantage was betting the innovation would give them an edge in the competitive residential lending business while memories of the housing crisis are still fresh. Chicago area single-family home prices are 5.5% percent higher since the launch of Value Guard, but are still down 22 percent from its peak in 2007.

Value Guard borrowers are eligible for payment if the Chicago-­area house price index computed by the Federal Housing Finance Agency is lower upon resale than the level recorded the day they took out the loan. An index is used instead of individual sale prices to encourage customers to maintain their home values. The maximum payout, $10,000, represents 10 percent of the $100,000 protected home value by Value Guard.

EquityLock FIRST Product Details
EquityLock FIRST offers $100,000 in home value protection on your borrower’s home purchase at no additional cost to the borrower.  The lender pays the $295 fee for the coverage which will appear on the HUD-1 as a lender credit.

The borrower will be paid up to $10,000 if the FHFA housing market index for their area declines between the closing date and when they sell their home in the future, even if they make a profit, thus protecting the equity they have invested.

• Coverage
The borrower is eligible to receive $100,000 in equity protection at your closing, no matter the property value, if this is a purchase transaction. Additional coverage is available for the borrower to purchase through our other equity protection products.

• Coverage Period
5 years with a 24 month initial waiting period.

• Property Types
Available on primary residences, second homes, and investment properties with no additional appraisal required.

• Home Index
Government issued FHFA,

• Maximum Payout
Up to $10,000 cash (10% of $100,000 in equity coverage). The first 5% decrease of the FHFA House Price Index is not eligible for a payout.

• Cost
$295 paid by the Lender


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