Can you expound on this a bit? If you go under, who would I have to go to get paid? What legal guarantees would I have in place assuring me the payout? How do I know that your underwriting scheme is sufficient for covering your exposure?
In terms of our our underwriting process works. We do have clauses in our contract that removes our liability for act of god events, civil strife, or war. Barring these scenarios, the only other events that can move a property's depreciation to more than 20% is a recession scenario, which the hedging instruments would cover.
So, in reality, our exposure for every home is between 0 to -20%. So for every home we underwrite, we just need to mark funds equal to 20% of the property value.
Is this clear? If not, I'm happy to expand on it further?