Although SwapRent and its embedded consumer financial products were specially designed to keep the similar economic benefits while avoiding from the complexity and potential dangers of using the conventional financial derivatives, it might be useful to provide the info on comparable equivalents for those financial professionals to relate to those financial derivatives they already know in order to have a quicker understanding what SwapRent and its related new financial products were intended to accomplish. Here below are a few SwapRent terms and their conventional financial derivatives equivalents:
SwapRent contracts – There are three basic forms, Generic SwapRent, AG (Appreciation-Give-up) SwapRent and DP (Depreciation Protection) SwapRent.
Generic SwapRent contract – similar to a swap or the economic effect of a forward contract.
AG SwapRent contract – delivers what a call option contract could deliver with a different pricing mechanism.
DP SwapRent contract – delivers what a put option contract could deliver with a different pricing mechanism.
REIDeX – the SwapRent transaction marketplace. It could be operated like a trading exchange, an OTC brokerage business or simply a logistics service provider.
HELM (Home Equity Locking Mortgage) – a SwapRent embedded mortgage product for banks to offer to existing homeowners who already own homes.
FARM (Flexible And Reversible Mortgage) – a SwapRent empowered mortgage product for banks to offer to would-be homeowners.
Economic Renting, Owning and Temporary Own-Rent Switching – the conceptual foundation on how to use SwapRent, HELM and FARM by consumers.
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Innovation Trio: SwapRent, FARJHO & TARELV 