PARTNERS: Government, Federal, State and Housing Agencies
A PARADIGM SHIFT IN HOUSING FINANCE AND THE PURSUIT OF SUSTAINABLE HOME OWNERSHIP
THE PRIMARQ EXCHANGEPRIMARQ is a proposed integrated capital market exchange that will bring home buyers or home owners together with a universe of accredited individual and institutional investors. The Exchange provides a transparent electronic platform to conduct equity sharing transactions to enable investors to contribute equity for the purchase and refinancing of homes. Both investor and buyer would share ownership and in the potential appreciation (and depreciation) of the purchased property. PRIMARQ manages both a primary and secondary market, wherein investors can monetize their equity interest without requiring the home to be sold or refinanced.
INNOVATIVE HOME OWNERSHIP EQUITY TRADING
PLATFORM USING PROVEN MODELPRIMARQ has been designed with a “best practices” approach, having reviewed capital market systems, exchanges and bourses across the globe, including key attributes such as transparency in price discovery, trading and settlement. Further, we have mirrored the approach the SEC has taken in terms of disclosure standardization in order provide consistency and objectivity to the market’s “accredited” investor community for both primary and secondary transactions. Additionally, our technology platform is being built for scalability, security, efficiency, and consistency, with planned access by appropriate regulatory bodies.
LESS DEBT, MORE EQUITY EQUALS SUSTAINABLE HOME
OWNERSHIPThe PRIMARQ Exchange can improve the performance of single family mortgages through more prudent loan underwriting and structuring, utilizing lower levels of debt, with attendant reduced payments, and therefore creating a more sustainable home ownership profile. PRIMARQ’s Exchange will assist a home owner in being able to “afford” a home as well as to diversify away from a single asset housing-biased investment portfolio. As a web-based platform, the Exchange will avail and direct hundreds of billions of dollars of private sector equity capital on a global basis into the currently challenged housing finance market, complementing existing mortgage lending activities. As a result of an improved method of housing finance, PRIMARQ will contribute to a sound economic environment and a healthier financial system.
EQUITY SHARING: HOW IT WORKSUnlike other significant asset classes, such as stocks and bonds, which exist with shared ownership structures, there has never been a practical and scalable mechanism for shared ownership for owner-occupied housing until PRIMARQ. The electronic PRIMARQ Exchange will facilitate transactional activity involving the contribution of equity by investors for enhancing down payment funds for home buyers and for providing funds to those home owners seeking to monetize their home equity. Such transactions entail the investor purchasing an equity interest in the underlying property and both the home owner and investor sharing in the market returns of the property. Additional equity capital provides more cushion to the mortgage lender and guarantors in down markets.
BENEFITS OF THE PRIMARQ EXCHANGEFor Consumers
- Affordable and Sustainable Home ownership. The PRIMARQ Exchange will significantly improve the affordability gap and create sustainable home ownership. PRIMARQ delivers a means for acquiring and maintaining a home with less mortgage debt, and accordingly lower monthly payments, no PMI, and improved overall terms.
- Less Debt Required to Achieve Home ownership. The PRIMARQ Exchange will reduce dependency on excessive leveraging in the home financing mortgage marketplace, ensuring that consumers are not faced with overwhelming levels of debt. Both the home buyer and investor will have “skin in the game,” and bear the price volatility of the property.
- Access to Home Equity for Diversification of Assets. The PRIMARQ Exchange will allow consumers to diversify their assets, alleviating the risk of a housing-biased net worth. U.S. wealth has predominantly rested in home equity, which had been used for nest-egg retirement, education expenses and health care costs. With this housing-biased portfolio, in the midst of the price correction, the nation has witnessed the largest wealth destruction in history. With PRIMARQ, housing-biased home owners can diversify away from a single asset and class, by selling a percentage of their homes, and diversify the proceeds into other investment classes, including stocks, bonds, 401(k) s, etc.
- Helping Home owners to Avoid Foreclosure. PRIMARQ makes new capital available, providing lenders with additional incentive to aggressively modify challenged mortgages.
- Performance of Single Family Mortgages. PRIMARQ provides access to incremental equity capital for home buyers and home owners, lowering the level of debt which lowers LTVs and improves DTI ratios. As such, lenders and servicers who hold mortgages on properties with PRIMARQ equity should see better performance on their loans.
- Safe Lending. The PRIMARQ Exchange will provide for a more prudent lending environment for mortgage lenders to start lending again. Improved loan structures will lead to improved salability.
- Opening up the Lending Window. The inclusion of an equity pool through PRIMARQ will facilitate and stimulate home purchases, while allowing the banks to reengage in lending on a much more conservative basis, with reduced LTVs and DTI ratios.
- Access to a familiar, yet new asset class. Our nation’s housing stock represents the single largest asset class. Through PRIMARQ’s exchange protocols, global investors can invest and trade in “owneroccupied” properties.
- Compelling return profile. While reducing the debt amount, mortgages will continue to play a role in housing finance. As such, investors can attain leveraged returns, with the attractive tax treatments of investment property.
- Secondary market liquidity. Unlike other alternative asset classes, PRIMARQ’s approach to investor liquidity includes a deep secondary trading platform, to enable monetization without the underlying property being refinanced or sold.
- Economic Benefits. PRIMARQ will reinvigorate the U.S. economy, which is tremendously reliant on housing market health. Housing represents one of the largest components to US GDP and is critical to the health of the US economy.
- Socioeconomic Benefits. PRIMARQ provides a new source of non-debt capital for home ownership in all income strata. Home ownership creates improved neighborhoods and communities, enables educational achievement, provides the opportunity for wealth creation, and enhances the local tax base.
- Paradigm Shift in U.S. Housing Policy. PRIMARQ is a private sector
solution that appropriately allocates risk and return in the capital
structure of home ownership.
- Places the risk of downside price movement on the private market, while enabling new capital to flow into the housing market in search of a market return.
- Reduces lenders’ risk with more contributed equity and less leverage.
- Reduces consumers’ risk of foreclosure from too much debt and enables diversification out of a single asset.
- Ultimately reduces taxpayer risk in lessening the need for bailout funding for banks and GSEs, with better performing single family mortgage loans
- Reduced reliance on GSE/public sector role for mortgage liquidity. PRIMARQ creates a primary and secondary market for investing and trading the single largest asset class in the U.S. This reduces the risk being incurred by the FHA, FNMA, FHLMC and ultimately the US taxpayer