GB2424289A

GB2424289A - Equity Protection

Info

Publication number: GB2424289A
Application number: GB0416129A
Authority: GB
Inventors: Steven Edwards
Original assignee: Individual
Current assignee: Individual
Priority date: 2004-03-24
Filing date: 2004-07-20
Publication date: 2006-09-20
Also published as: GB0406557D0; GB0416129D0

Abstract

A financial product that enables a buyer of positive equity protection and/or negative equity protection (the "Buyer") 1 to purchase protection either directly or indirectly from the seller of positive equity protection and/or negative equity protection (the "Seller") 2 against the prospective future positive equity depreciation and/or against the prospective future negative equity (within agreed parameters) in a specified property 3 between the commencement of the agreement and any time up to and including expiry, set dates up to and including expiry or upon expiry of the agreement. The Buyer 1 makes one or more periodic payments 4 to the Seller 2 in return for a contingent positive equity protection payment and/or contingent negative equity protection payment 5 from the Seller 2 equal to the positive equity depreciation and/or the negative equity (within agreed parameters) in a specified property 3.

Description

I

EQUITY PROTECTION

This invention consists of two parts that can be used on either a mutually inclusive or mutually exclusive basis.

Positive Equity Protection The first part of this invention is a financial product in the form of an agreement between at least one party (the "Positive Equity Protection Buyer") and another party (the "Positive Equity Protection Seller") by which the Positive Equity Protection Buyer purchases protection either directly or indirectly from the Positive Equity Protection Seller against the prospective future positive equity depreciation (within agreed parameters) in a property specified in such agreement (the "Specified Property"). For the purposes of this description, it is assumed th.a-Specified Property is in either positive equity or notional positive equity on or about tl nmencement of the agreement (but this does not preclude using this positive equity protection financial product in conjuncivith a negative equity protection financial product, as set out in the final paragraph j1 this positive equity protection description). The Positive Equity Protection Buyer may be a commercial institution, property owner or other individual and the Positive Equity Protection Seller may be a financial institution.

The positive equity in any particular property is created by the market value of that property being greater than the debt in respect of a related mortgage (if any). Due to the volatility of the property market, any positive equity in a property may appreciate or depreciate in accordance with the future market value of a property. At present, the positive equity in a property may only be realised by the property owner (i) as an equity of redemption by selling the property in conjunction with redeeming any outstanding mortgage (ii) by remortgaging the property up to its full market value or (iii) by utilising an equity release scheme. There is no financial product invented that enables property owners or other parties to either purchase protection against the prospective future positive equity depreciation (within agreed parameters) in a Specified Property or speculate in relation thereto (as opposed to merely realising positive equity).

The purpose of the first part of this invention is to make it possible for property owners to purchase protection against the prospective future decline in actual positive equity or notional positive equity which, for convenience, shall be termed positive equity (within agreed parameters) in a Specified Property and also to enable other parties to buy and sell protection against the prospective future decline in positive equity (within agreed parameters) in a Specified Property that is not owned by the Positive Equity Protection Buyer. The first part of this invention (together with the second part thereof) would allow financial institutions to participate in and develop an innovative financial market and could also help to stabilise volatility in the property market.

The first part of this invention therefore allows property owners or other parties to purchase positive equity protection either directly or indirectly from another party in order to protect against or speculate in relation to the prospective future positive equity depreciation (within agreed parameters) in a Specified Property.

The first part of this invention is described below with reference to the attached drawings in which: Figure 1 shows the Positive Equity Protection Buyer 1, Positive Equity Protection Seller 2, Specified Property 3, one or more periodic payments 4 and positive equity protection payment 5; and Figure 2 shows a Specified Property 3, positive equity 6, debt in respect of a relevant outstanding actual mortgage or allocated debt in respect of a notional mortgage (if any) (in each case, such debt represents the outstanding mortgage capital balance after taking into account positive sums in any set-off accounts) 7, flexibility in the levels of positive equity protection that can be purchased 8 and excluded amount(s) 9 therefrom.

In Figure 1, there is an agreement (the term of which is agreed between the parties thereto) in which the Positive Equity Protection Buyer 1 purchases positive equity protection from the Positive Equity Protection Seller 2 in relation to a Specified Property 3 that is, for example, valued at 100,000 and has a debt in respect of a relevant outstanding actual mortgage of 60,000 (expressed as a positive number) on or about the commencement of the agreement. The positive equity (where the valuation exceeds such debt) is a Specified Property 3 valuation minus the debt in respect of a relevant outstanding actual mortgage (expressed as a positive number), which equals 40,000.

On or about the commencement of the agreement, the Positive Equity Protection Seller 2 will arrange or procure the arrangement of a valuation of a Specified Property 3 (any cost of such valuation is borne as agreed by the parties to the agreement) and ascertain the debt in respect of a relevant outstanding actual mortgage or, if applicable, allocated debt in respect of a notional mortgage (if any) in relation to a Specified Property 3. If, as in this first example, the positive equity is 40,000 on or about the commencement of the agreement, the Positive Equity Protection Seller 2 may, subject to its risk policies, sell positive equity protection to the Positive Equity Protection Buyer 1 in respect of any amount(s) up to and including 40,000. The Positive Equity Protection Buyer 1 will make one or more periodic payments 4 (e.g. monthly, quarterly, annually or such other agreed period) to the Positive Equity Protection Seller 2 in return for protection against the prospective future positive equity depreciation (within agreed parameters which, in this first example, is up to 40,000) in a Specified Property 3. The Positive Equity Protection Seller 2 will determine the level of periodic payments 4 to be paid by the Positive Equity Protection Buyer 1.

Between the commencement of the agreement and any time up to and including expiry, set dates up to and including expiry or upon expiry of the agreement, the Positive Equity Protection Buyer 1 may elect to potentially receive (or, if agreed, the Positive Equity Protection Seller 2 may elect to potentially pay) a positive equity protection payment 5 (for the purposes of this description, it is assumed that the election is solely the right (but not an obligation) of the Positive Equity Protection Buyer 1). Upon such election, the Positive Equity Protection Seller 2 will arrange or procure the arrangement of a revaluation of a Specified Property 3 (any cost of such revaluation is borne as agreed by the parties to the agreement) and ascertain the outstanding actual debt or notional debt (if any) in relation thereto on or about the date of such revaluation. Following a calculation in respect of the positive equity on or about the commencement of the agreement and any positive equity on or about such revaluation, if the initial positive equity in a Specified Property 3 has declined by an amount up to and including the level of positive equity protection purchased, the Positive Equity Protection Seller 2 will be obliged to make a positive equity protection payment 5 equal to that calculated decline in the positive equity (provided that such is within the agreed parameters) in a Specified Property 3 to the Positive Equity Protection Buyer 1.

In this first example, if the revaluation of a Specified Property 3 was 80,000 and the debt in respect of a relevant outstanding actual mortgage was 58,000 (expressed as a positive number) on or about the date of such revaluation, the positive equity (where such revaluation exceeds the related debt) would be 22,000. The decline in positive equity is the positive equity on or about the commencement of the agreement (i.e. 40, 000) minus the positive equity (if any) on or about the revaluation (i.e. 22,000), which equals 18,000. The positive equity protection payment 5 to be made by the Positive Equity Protection Seller 2 to the Positive Equity Protection Buyer 1 would therefore be 18,000, provided that the Positive Equity Protection Buyer 1 had purchased positive equity protection from the Positive Equity Protection Seller 2 for an amount of the first 18,000 decline in positive equity or more and no excluded amount(s) 9 are applicable. If the Positive Equity Protection Buyer 1 had purchased positive equity protection for an amount less than the first 18,000 decline in positive equity, the positive equity protection payment would be that lesser amount (after taking into account the application of any excluded amount(s) 9). Alternatively, if the positive equity in a Specified Property 3 had not declined upon such a revaluation either at all (as it had, in fact, increased or remained static) or to the extent that a positive equity protection payment 5 could be triggered, a positive equity protection payment 5 would not be due and payable from the Positive Equity Protection Seller 2 to the Positive Equity Protection Buyer 1.

The determination of any positive equity 6 (where the revaluation of a Specified Property 3 exceeds the related actual debt or notional debt, as the case may be) on or about the date of such revaluation includes (i) the revaluation of a Specified Property 3 minus either (ii) the debt in respect of a relevant outstanding actual mortgage 7 (if any) (expressed as a positive number), taking into account any amortisation of any such mortgage debt, but excluding (amongst other things) any additional mortgage debt, other relevant borrowing, arrears, late payment fees or other charges or penalties in respect of a Specified Property 3 that existed on or about the date of such revaluation or (iii) the allocated debt in respect of a notional mortgage 7 (if any) (expressed as a positive number), taking into account agreed adjustments (if any) which may include, amongst other things, amortisation of any such notional mortgage debt on or about the date of such revaluation.

Methods of resolving disputes by way of a further revaluation of a Specified Property 3 by an independent third party (which shall be binding in the absence of manifest error) may be incorporated into the agreement (any cost of such further revaluation is borne as agreed by the parties to the agreement). Upon the earlier of either a positive equity protection payment 5 becoming due and payable or the term of the agreement expiring without the Positive Equity Protection Buyer 1 electing to potentially receive a positive equity protection payment 5 from the Positive Equity Protection Seller 2, the agreement will terminate. If a positive equity protection payment 5 is not due and payable upon the Positive Equity Protection Buyer 1 electing to potentially receive a positive equity protection payment 5 from the Positive Equity Protection Seller 2 during the term of the agreement (as the positive equity had not declined either at all or to the extent that a positive equity protection payment 5 could be triggered on or about the date of such a revaluation), the parties may agree or have agreed that the agreement will either terminate immediately or continue until expiry.

In Figure 2, the positive equity 6 is demonstrated in relation to the debt in respect of a relevant outstanding actual mortgage or allocated debt in respect of a notional mortgage (if any) 7 in relation to a Specified Property 3. If, as in this first example, the valuation of a Specified Property 3 on or about the commencement of the agreement is 100,000 and the debt in respect of a relevant outstanding actual mortgage 7 is 60,000 (expressed as a positive number) on such date, the positive equity 6 is 40,000 (therefore, in this first example, the sum of the positive equity 6 and the debt in respect of a relevant outstanding actual mortgage 7 equals the initial market value of a Specified Property 3). The levels of positive equity protection that can be purchased 8 are flexible within the parameters of the available positive equity 6, as agreed by the parties to the agreement and, in order to increase this flexibility, the parties thereto may agree excluded amount(s) 9 from the positive equity protection that can be purchased 8.

This positive equity protection financial product may be used in conjunction with a negative equity protection financial product set out in the second part of this invention to form a combined equity protection financial product that both protects against the prospective future positive equity depreciation and protects against the prospective future negative equity (within agreed parameters) in a Specified Property 3.

Negative Equity Protection The second part of this invention is a financial product in the form of an agreement between at least one party (the "Negative Equity Protection Buyer") and another party (the "Negative Equity Protection Seller") by which the Negative Equity Protection Buyer purchases protection either directly or indirectly from the Negative Equity Protection Seller against the prospective future negative equity (within agreed parameters) in a Specified Property. For the purposes of this description, it is assumed that a Specified Property is in either positive equity or notional positive equity on or about the commencement of the agreement (but this does not preclude protection against further negative equity or notional negative equity in circumstances where a Specified Property is already in negative equity or notional negative equity on or about the commencement of the agreement). The Negative Equity Protection Buyer may be a commercial institution, property owner or other individual and the Negative Equity Protection Seller may be a financial institution.

The negative equity in any particular property is created by the market value of that property being less than the debt in respect of a related mortgage. Due to the volatility of the property market, any negative equity in a property may increase or decrease in accordance with the future market value of a property. At present, a property owner may only be shielded from negative equity as part of an equity release scheme that has a no negative equity guarantee', by which the mortgagee agrees to waive any debt in excess of the value of the property. There is no financial product invented that enables property owners or other parties to either purchase protection against the prospective future negative equity (within agreed parameters) in a Specified Property or speculate in relation thereto (as opposed to merely having the benefit of a guarantee in respect of an equity release scheme).

The purpose of the second part of this invention is to make it possible for property owners to purchase protection against the prospective future actual negative equity or notional negative equity which, for convenience, shall be termed negative equity (within agreed parameters) in a Specified Property and also to enable other parties to buy and sell protection against the prospective future negative equity (within agreed parameters) in a Specified Property that is not owned by the Negative Equity Protection Buyer. The second part of this invention (together with the first part thereof) would allow financial institutions to participate in and develop an innovative financial market and could also help to stabilise volatility in the property market.

The second part of this invention therefore allows property owners or other parties to purchase negative equity protection either directly or indirectly from another party in order to protect against or speculate in relation to the prospective future negative equity (within agreed parameters) in a Specified Property.

The second part of this invention is described below with reference to the attached drawings in which: Figure 1 shows the Negative Equity Protection Buyer 1, Negative Equity Protection Seller 2, Specified Property 3, one or more periodic payments 4 and negative equity protection payment 5; and Figure 3 shows a Specified Property 3, positive equity 6, debt in respect of a relevant outstanding actual mortgage or allocated debt in respect of a notional mortgage (in each case, such debt represents the outstanding mortgage capital balance after taking into account positive sums in any set-off accounts) or prospective future negative equity 7 (part of which will equate negative equity if the market value of a Specified Property 3 becomes less than such actual debt or notional debt, as the case may be), flexibility in the levels of negative equity protection that can be purchased 8 and excluded amount(s) 9 therefrom.

In Figure 1, there is an agreement (the term of which is agreed between the parties thereto) in which the Negative Equity Protection Buyer 1 purchases negative equity protection from the Negative Equity Protection Seller 2 in relation to a Specified Property 3 that is, for example, valued at 100,000 and has a debt in respect of a relevant outstanding actual mortgage of 60,000 (expressed as a positive number) on or about the commencement of the agreement. The positive equity (where the valuation exceeds such debt) is a Specified Property 3 valuation minus the debt in respect of a relevant outstanding actual mortgage (expressed as a positive number), which equals 40,000.

On or about the commencement of the agreement, the Negative Equity Protection Seller 2 will arrange or procure the arrangement of a valuation of a Specified Property 3 (any cost of such valuation is borne as agreed by the parties to the agreement) and ascertain the debt in respect of a relevant outstanding actual mortgage or, if applicable, allocated debt in respect of a notional mortgage in relation to a Specified Property 3. The Negative Equity Protection Seller 2 may, subject to its risk policies, sell negative equity protection to the Negative Equity Protection Buyer 1 in respect of any amount(s) of the prospective future negative equity 7 (which, by definition, thereby excludes the 40,000 of positive equity on or about the commencement of the agreement in this second example). The Negative Equity Protection Buyer I will make one or more periodic payments 4 (e.g. monthly, quarterly, annually or such other agreed period) to the Negative Equity Protection Seller 2 in return for protection against the prospective future negative equity (within agreed parameters) in a Specified Property 3. The Negative Equity Protection Seller 2 will determine the level of periodic payments 4 to be paid by the Negative Equity Protection Buyer 1.

Between the commencement of the agreement and any time up to and including expiry, set dates up to and including expiry or upon expiry of the agreement, the Negative Equity Protection Buyer 1 may elect to potentially receive (or, if agreed, the Negative Equity Protection Seller 2 may elect to potentially pay) a negative equity protection payment 5 (for the purposes of this description, it is assumed that the election is solely the right (but not an obligation) of the Negative Equity Protection Buyer 1). Upon such election, the Negative Equity Protection Seller 2 will arrange or procure the arrangement of a revaluation of a Specified Property 3 (any cost of such revaluation is borne as agreed by the parties to the agreement) and ascertain the outstanding actual debt or notional debt in relation thereto on or about the date of such revaluation. If the positive equity in a Specified Property 3 has declined to less than zero, the Negative Equity Protection Seller 2 will be obliged to make a negative equity protection payment 5 equal to the amount of negative equity (provided that such is within the agreed parameters) in a Specified Property 3 to the Negative Equity Protection Buyer 1.

In this second example, if the revaluation of a Specified Property 3 was 40,000 and the debt in respect of a relevant outstanding actual mortgage was 58,000 (expressed as a positive number) on or about the date of such revaluation, the negative equity (where the related debt exceeds such revaluation) would be 18,000 (expressed as a positive number).

The negative equity protection payment 5 to be made by the Negative Equity Protection Seller 2 to the Negative Equity Protection Buyer I would therefore be 18,000, provided that the Negative Equity Protection Buyer 1 had purchased negative equity protection from the Negative Equity Protection Seller 2 for an amount of the first 18,000 of negative equity or more and no excluded amount(s) 9 are applicable. If the Negative Equity Protection Buyer 1 had purchased negative equity protection for an amount less than the first 18,000 of negative equity, the negative equity protection payment 5 would be that lesser amount (after taking into account the application of any excluded amount(s) 9).

Alternatively, if the positive equity in a Specified Property 3 had not declined upon such a revaluation either at all (as it had, in fact, increased or remained static) or to the extent that a negative equity protection payment 5 could be triggered, a negative equity protection payment 5 would not be due and payable from the Negative Equity Protection Seller 2 to the Negative Equity Protection Buyer 1.

The determination of any negative equity (where the related actual debt or notional debt, as the case may be, exceeds the revaluation of a Specified Property 3) on or about the date of such revaluation includes either (i) the debt in respect of a relevant outstanding actual mortgage 7 (expressed as a positive number), taking into account any amortisation of any such mortgage debt, but excluding (amongst other things) any additional mortgage debt, other relevant borrowing, arrears, late payment fees or other charges or penalties in respect of a Specified Property 3 that existed on or about the date of such revaluation or (ii) the allocated debt in respect of a notional mortgage 7 (expressed as a positive number), taking into account agreed adjustments (if any) which may include, amongst other things, amortisation of any such notional mortgage debt on or about the date of such revaluation, minus (iii) the revaluation of a Specified Property 3.

Methods of resolving disputes by way of a further revaluation of a Specified Property 3 by an independent third party (which shall be binding in the absence of manifest error) may be incorporated into the agreement (any cost of such further revaluation is borne as agreed by the parties to the agreement). Upon the earlier of either a negative equity protection payment 5 becoming due and payable or the term of the agreement expiring without the Negative Equity Protection Buyer I electing to potentially receive a negative equity protection payment 5 from the Negative Equity Protection Seller 2, the agreement will terminate. If a negative equity protection payment 5 is not due and payable upon the Negative Equity Protection Buyer 1 electing to potentially receive a negative equity protection payment 5 from the Negative Equity Protection Seller 2 during the term of the agreement (as the positive equity had not declined either at all or to the extent that a negative equity protection payment 5 could be triggered on or about the date of such a revaluation), the parties may agree or have agreed that the agreement will either terminate immediately or continue until expiry.

In Figure 3, the positive equity 6 is demonstrated in relation to the debt in respect of a relevant outstanding actual mortgage or allocated debt in respect of a notional mortgage or prospective future negative equity 7 (part of which will equate negative equity if the market value of a Specified Property 3 becomes less than such actual debt or notional debt, as the case may be) in relation to a Specified Property 3. If, as in this second example, the valuation of a Specified Property 3 on or about the commencement of the agreement is 100,000 and the debt in respect of a relevant outstanding actual mortgage 7 is 60,000 (expressed as a positive number) on such date, the positive equity 6 is 40,000 (therefore, in this second example, the sum of the positive equity 6 and the debt in respect of a relevant outstanding actual mortgage 7 equals the initial market value of a Specified Property 3).

The levels of negative equity protection that can be purchased 8 are flexible within the parameters of the prospective future negative equity 7, as agreed by the parties to the agreement and, in order to increase this flexibility, the parties thereto may agree excluded amount(s) 9 from the negative equity protection that can be purchased 8.

This negative equity protection financial product may be used in conjunction with a positive equity protection financial product set out in the first part of this invention to form a combined equity protection financial product that both protects against the prospective future negative equity and protects against the prospective future positive equity depreciation (within agreed parameters) in a Specified Property 3.

Features of Equity Protection The Positive Equity Protection Buyer andlor Negative Equity Protection Buyer (hereafter, the "Buyer") may or may not own andlor be the mortgagor in respect of a Specified Property, which (i) in relation to positive equity protection, may or may not have either an outstanding actual mortgage or allocated notional mortgage in relation thereto on or about the commencement or otherwise during the term of the agreement and (ii) in relation to negative equity protection, must have either an outstanding actual mortgage or allocated notional mortgage in relation thereto on or about the commencement of the agreement.

Notwithstanding the existence of any outstanding actual mortgage in respect of a Specified Property, the parties may agree to use an allocated notional mortgage as an alternative for the calculation of any positive equity or negative equity, which is designed to facilitate breadth in a prospective financial market.

If the Buyer owns a Specified Property (which, as a matter of contract, is not an obligation on such party), there is no requirement to sell a Specified Property in order to receive a positive equity protection payment andlor negative equity protection payment from the Positive Equity Protection Seller andlor the Negative Equity Protection Seller (hereafter, the "Seller"). In circumstances where the Buyer owns a Specified Property (and has a mortgage thereupon) on or about the commencement or otherwise during the term of the agreement and sells a Specified Property during the term of the agreement (thereby redeeming that mortgage), the agreement still subsists and any positive equity protection payment and/or negative equity protection payment made thereafter by the Seller to the Buyer will be calculated by reference to an allocated notional mortgage. Furthermore, if the Buyer owns a Specified Property (without a mortgage but, for the purposes of the agreement, has an allocated notional mortgage) on or about the commencement or otherwise during the term of the agreement and sells a Specified Property during the term of the agreement, the agreement still subsists and any positive equity protection payment and/or negative equity protection payment made thereafter by the Seller to the Buyer will be calculated by reference to that allocated notional mortgage.

Characterisation of Equity Protection As a matter of law, this invention is (i) not a contract of insurance as the right to receive a contingent positive equity protection payment and/or contingent negative equity protection payment is based on the future positive equity depreciation and/or the future negative equity (within agreed parameters) in relation to a Specified Property, irrespective of whether the Buyer has either been subject to a risk of loss or sustained an actual loss (ii) in respect of negative equity protection, not an equity release scheme guarantee as the right to receive a contingent negative equity protection payment is based on the future negative equity (within agreed parameters) in relation to a Specified Property and therefore not a mortgagee undertaking to waive any debt in excess of the value of a Specified Property (iii) not a credit derivative as the right to receive a contingent positive equity protectionpayment and/or contingent negative equity protection payment is based on the future positive equity depreciation and/or the future negative equity (within agreed parameters) in relation to a Specified Property and therefore not on credit events, mere value of securities or any credit index or indices (iv) not an invented property derivative as the right to receive a contingent positive equity protection payment and/or contingent negative equity protection payment is based on the future positive equity depreciation and/or the future negative equity (within agreed parameters) in relation to a Specified Property and therefore not merely on the capital value of property or any property price index or indices (v) not an equity derivative as the right to receive a contingent positive equity protection payment and/or contingent negative equity protection payment is based on the future positive equity depreciation and/or the future negative equity (within agreed parameters) in relation to a Specified Property and therefore not on any company share price(s) or any company share price index or indices and (vi) not a business method (the fundamental nature of which is a procedure or process) as this invention is a financial product that has a value based on the prospective future positive equity depreciation and/or prospective future negative equity (within agreed parameters) in relation to a Specified Property.

Claims

A financial product in the form of one or more agreement(s) (the term(s) of which is/are agreed between the parties thereto) that provide(s) protection to property owners or other parties either directly or indirectly from another party against the prospective future positive equity depreciation and/or the prospective future negative equity (within agreed parameters) in a property specified in such agreement.
2. A product, as claimed in Claim 1, that can be entered into at any time (i) in respect of positive equity protection, provided that such a specified property has either positive equity or notional positive equity and (ii) in respect of negative equity protection, irrespective of whether such a specified property has positive equity, notional positive equity, is in negative equity or notional negative equity, in each case on or about the commencement of the agreement.
3. A product, as claimed in Claim 1, that the parties can enter into at any time, irrespective of whether the purchaser of positive equity protection and/or negative equity protection owns and/or is the mortgagor in respect of such a specified property that (i) in relation to positive equity protection, may or may not have a debt in respect of a relevant outstanding actual mortgage or allocated debt in respect of a notional mortgage in relation thereto on or about the commencement or otherwise during the term of the agreement and (ii) in relation to negative equity protection, must have a debt in respect of a relevant outstanding actual mortgage or allocated debt in respect of a notional mortgage in relation thereto on or about the commencement of the agreement.
4. A product, as claimed in Claim 1, that enables the purchaser of positive equity protection and/or negative equity protection to make one or more periodic payments to the seller of positive equity protection and/or negative equity protection in return for a contingent positive equity protection payment and/or contingent negative equity protection payment equal to the future positive equity depreciation and/or the future negative equity (within agreed parameters) in such a specified property between the commencement of the agreement and any time up to and including expiry, set dates up to and including expiry or upon expiry of the agreement.
5. A product, as claimed in Claim 1, that entitles the purchaser of positive equity protection and/or negative equity protection which does in fact own such a specified property (which, as a matter of contract, is not an obligation on such party) to receive a contingent positive equity protection payment and/or contingent negative equity protection payment, irrespective of whether the purchaser of positive equity protection and/or negative equity protection sells such a specified property either during the term of the agreement or upon election to receive a positive equity protection payment and/or negative equity protection payment.
6. A product, as claimed in Claim 1, in which a contingent positive equity protection payment is due and payable if the positive equity in relation to such a specified property on or about the commencement of the agreement has declined on or about the revaluation thereof (subject to the agreed parameters) and/or in which a contingent negative equity protection payment is due and payable if any negative equity in relation to such a specified property on or about the revaluation thereof is within the agreed parameters.
7. A product, as claimed in Claim 1, that has a positive equity protection payment and/or negative equity protection payment calculated by reference to the positive equity depreciation and/or the negative equity in relation to valuations of such a specified property.
8. A product, as claimed in Claim 1, that has a value based on the prospective future positive equity depreciation and/or the prospective future negative equity (within agreed parameters) in relation to such a specified property.
9. A product, as claimed in Claims 1 to 8, that is not a contract of insurance as the right to receive a contingent positive equity protection payment andlor contingent negative equity protection payment is based on the future positive equity depreciation and/or the future negative equity (within agreed parameters) in relation to such a specified property and therefore not on the existence of an insurable interest and/or an actual loss.
10. A product, as claimed in Claims ito 8, in respect of negative equity protection, that is not an equity release scheme guarantee as the right to receive a contingent negative equity protection payment is based on the future negative equity (within agreed parameters) in relation to such a specified property and therefore not a mortgagee undertaking to waive any debt in excess of the value of such a specified property.
11. A product, as claimed in Claims I to 8, that is not a credit derivative as the right to receive a contingent positive equity protection payment and/or contingent negative equity protection payment is based on the future positive equity depreciation and/or on the future negative equity (within agreed parameters) in relation to such a specified property and therefore not on credit events, mere value of securities or any credit index or indices.
12. A product, as claimed in Claims I to 8, that is not an invented property derivative as the right to receive a contingent positive equity protection payment and/or contingent negative equity protection payment is based on the future positive equity depreciation and/or the future negative equity (within agreed parameters) in relation to such a specified property and therefore not merely on the capital value of property or any property price index or indices.
13. A product, as claimed in Claims I to 8, that is not an equity derivative as the right to receive a contingent positive equity protection payment andlor contingent negative equity protection payment is based on the future positive equity depreciation andlor the future negative equity (within agreed parameters) in relation to such a specified property and therefore not on any company share price(s) or any company share price index or indices.
14. A product, as claimed in Claims 1 to 8, that is not a business method (the fundamental nature of which is a procedure or process) as this invention is a financial product that has a value based on the prospective future positive equity depreciation andlor prospective future negative equity (within agreed parameters) in relation to such a specified property.
15. A product as substantially described herein and illustrated in the accompanying Figures 1, 2 and 3.