There’s no question that consumer confidence, or lack thereof, is the greatest barrier in the way of a full-blown housing recovery.

Credit, while tough to get, is historically cheap, home prices have fallen so far as to open the market to many more buyers, and there is ample inventory from which to choose.

The trouble is, no one wants to catch a falling sword, and home prices are still falling.

So what if you had a guarantee that even if your home lost value, you wouldn’t lose your initial investment? That’s the idea behind EquityLock Financial’s new “Home Price Protection.” It’s not insurance, but a warranty that you buy based on an index of home prices in your local area.

Here’s how the company describes it:

You purchase an EquityLock Home Price ProtectionTM contract that refers to a local index of housing values. If the index has dropped by the time you sell the house, we pay you the percentage of the index drop multiplied by the value of your home at the time you bought the Home Price ProtectionTM contract.

The transaction is structured as a contract, and not as an insurance policy; therefore the payment is made if the market index falls, regardless of whether you sell the home for more or less than you paid for it.

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