Home appreciation participation notes

A computer-implemented method for issuing and servicing a home appreciation participation note (HAPN) for a real estate property, comprising:

• initiating a participation contract (PC) for the real estate property, and issuing the PC to a PC investor for a PC price;
• specifying, for a valuation of the PC, a proxy and a set of sharing formulae, a payoff value of the PC at a settlement time of the HAPN being specified by the set of sharing formulae using a value of the proxy at the settlement time, the value of the proxy at the settlement time being ascertainable by using a plurality of attributes specific to the real estate property, the plurality of attributes being of a condition of the real estate property prior to the settlement time, and being independent of an actual condition of the real estate property at the settlement time;
• and
• issuing a HAPN Bond for the real estate property to a HAPN Bond investor, the HAPN Bond having an initial value being a sum of the PC price and a discounted amount of the initial value of the HAPN Bond;
• wherein
• both the PC and the HAPN Bond represent claims on the real estate property, and are paid off respectively to the PC and HAPN Bond investors at the settlement time;
• a payoff amount of the PC to the PC investor at the settlement time corresponds to the payoff value of the PC at the settlement time;
• and
• a payoff amount of the HAPN Bond to the HAPN Bond investor at the settlement time is the initial value of the HAPN Bond if the payoff value of the PC at the settlement time is not negative, and is a remaining portion of the initial value, after deducting the absolute value of the payoff value of the PC at the settlement time, if the payoff value of the PC at the settlement time is negative.

A computer program product for issuing and servicing a home appreciation participation note (HAPN) for a real estate property, the computer program product comprising:

• a non-transitory computer readable medium having instructions embodied therewith for causing a computer to execute a method comprising:
• initiating a participation contract (PC) for the real estate property, and issuing the PC to a PC investor for a PC price;
• specifying, for a valuation of the PC, a proxy and a set of sharing formulae, a payoff value of the PC at a settlement time of the HAPN being specified by the set of sharing formulae using a value of the proxy at the settlement time, the value of the proxy at the settlement time being ascertainable by using a plurality of attributes specific to the real estate property, the plurality of attributes being of a condition of the real estate property prior to the settlement time, and being independent of an actual condition of the real estate property at the settlement time;
• and
• issuing a HAPN Bond for the real estate property to a HAPN Bond investor, the HAPN Bond having an initial value being a sum of the PC price and a discounted amount of the initial value of the HAPN Bond;
• wherein
• both the PC and the HAPN Bond represent claims on the real estate property, and are paid off respectively to the PC and HAPN Bond investors at the settlement time;
• a payoff amount of the PC to the PC investor at the settlement time corresponds to the payoff value of the PC at the settlement time;
• and
• a payoff amount of the HAPN Bond to the HAPN Bond investor at the settlement time is the initial value of the HAPN Bond if the payoff value of the PC at the settlement time is not negative, and is a remaining portion of the initial value, after deducting the absolute value of the payoff value of the PC at the settlement time, if the payoff value of the PC at the settlement is negative.

A computer system comprising:

• a processor;
• a memory operatively coupled with the processor;
• a storage device operatively coupled with the processor and the memory;
• and
• a computer program product for issuing and servicing a home appreciation participation note (HAPN) for a real estate property, the computer program product comprising:
• a non-transitory computer readable medium having instructions embodied therewith for causing the processor to execute a method comprising:
• initiating a participation contract (PC) for the real estate property, and issuing the PC to a PC investor for a PC price;
• specifying, for a valuation of the PC, a proxy and a set of sharing formulae, a payoff value of the PC at a settlement time of the HAPN being specified by the set of sharing formulae using a value of the proxy at the settlement time, the value of the proxy at the settlement time being ascertainable by using a plurality of attributes specific to the real estate property, the plurality of attributes being of a condition of the real estate property prior to the settlement time, and being independent of an actual condition of the real estate property at the settlement time;
• and
• issuing a HAPN Bond for the real estate property to a HAPN Bond investor, the HAPN Bond having an initial value being a sum of the PC price and a discounted amount of the initial value of the HAPN Bond;
• wherein
• both the PC and the HAPN Bond represent claims on the real estate property, and are paid off respectively to the PC and HAPN Bond investors at the settlement time;
• a payoff amount of the PC to the PC investor at the settlement time corresponds to the payoff value of the PC at the settlement time;
• and
• a payoff amount of the HAPN Bond to the HAPN Bond investor at the settlement time is the initial value of the HAPN Bond if the payoff value of the PC at the settlement time is not negative, and is a remaining portion of the initial value, after deducting the absolute value of the payoff value of the PC at the settlement time, if the payoff value of the PC at the settlement time is negative.