Collaterally secured debt obligation and method of creating same

• US 20030028479A1
• Filed: 09/26/2002
• Published: 02/06/2003
• Est. Priority Date: 09/28/1993
• Status: Abandoned Application

• Current Assignee: William E. Kirksey
• Original Assignee: William E. Kirksey
• Inventors: Kirksey, William E.
• Application Number:
  US10/256,153
• Publication Number:
  US 20030028479A1
• Time in Patent Office: Days
• US Class Current: 705/38
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A debt obligation issued to a holder by an entity which obligation is backed by a group of property owners, each owning an individual property, where the entity obtains from each owner cross-collateralized lien and loan agreements in which the owners promise to pay his or her periodic payments to the entity and to pay, if defaults occur, each and every other owner'"'"'s periodic payments. The method of creating and servicing such obligation includes use of calculating equipment. The system includes pre-organization effort to assemble a peer lending group of potential property owners and causing the entity to purchase the homes at a below-market price using temporary financing which is later consolidated in bond financing.

Claims

1. A debt instrument issued to a debt holder by an entity which consolidates the promises to repay principal and to pay interest of a plurality of individual property owners in a group of owners wherein each encumbers his or her property for contingent sale to secure the consolidated promises.

2. The instrument of claim 1 in which the entity is a promisor with respect to the debt instrument.

3. The debt instrument of claim 1 in which each property owner encumbers his or her real property to secure such instrument.

4. The debt instrument of claim 1 in which each property owner agrees to make periodic payments to the entity for use by the entity in satisfying its obligations to the debt holder.

5. The debt-instrument of claim 4 in which calculation means are used to calculate the periodic payments including:

i) determining means for determining the (1) amounts and maturity dates of such bonds;

(2) amounts of interest due for such bonds and due dates; and

other monies needed on specific dates;

ii) inputting means for inputting such determinations into computing means including programmed calculating means; and

iii) operating means for causing the calculation means to determine the amount and due dates of property owner periodic payments required to meet the financial needs of the financial entity.

6. A debt instrument issued by a financing entity and which debt instrument includes covenants by such entity, and which debt instrument is secured by property liens and loan agreements by a group of owners of properties which agreements permit

a) foreclosure of such properties to satisfy covenants of such entity under such debt instrument;

and

b) which loan agreements require adjustable periodic payments from each and every property owner to such entity in the group which payments are adjusted by such entity as necessary to permit such entity to meet its covenants of the debt instrument.

7. The debt instrument of claim 6 in which the properties are real properties.

8. The debt instrument of claim 6 in which the properties are personal properties.

9. The debt instrument of claim 7 in which the properties are held in fee simple by the property owner.

14. The method of claim 6 in which the liens are held by a third party custodian pending default by a property owner.

10. A method of creating a debt instrument comprising causing an entity to obtain collaterally guaranteed promises from each and every property owner in a group of properties, which promises jointly and severally obligate the owners to pay principal and interest with respect to debt instruments;

and

2) causing such entity to issue said debt instruments.

16. The method of claim 10 in which each property owner liability is limited to the value of the equity in his or her home.

17. The method of claim 10 having in addition the steps of creating a second entity and causing each entity to cross-collateralize each other entity promises obtained from its property owner.

20. The method of claim 10 in which the property owners are a community of members.

21. The method of claim 10 in which the entity purchases credit insurance to insure payments by the property owners.

11. A method of creating and selling marketable lien-backed debt instruments comprising

a) creating a financing entity for lending monies to a plurality of property owners in a group for the purpose of financing a plurality of properties and thereafter causing such entity to

i) lend money to such property owners;

ii) obtain cross-collateralized lien and loan agreements from owners in the group promising to pay periodically his or her own and each and every other owners'"'"'

a) interest due;

b) cost to such entity arising from any mortgage prepayments; and

c) other stated charges;

iii) issue such instruments backed by such cross-collateralized lien and loan agreements; and

iv) sell such instruments.

12. The method of claim 11 in which each property is a residence in a separate structure.

13. The method of claim 11 in which multiple residences are located in a single structure with each owner holding deed title to his or her resident.

15. The method of claim 11 in which the property owner'"'"'s periodic payments require periodic adjustment by the financial entity which payments are determined by the steps of:

i) determining the amounts and maturity dates of such bonds;

ii) determining the amounts of interest due for such bonds and due dates;

iii) determining other monies needed on specific dates;

iv) inputting such determination into computing means including programmed calculating means; and

v) operating the computing means to determine the amount and due dates of property owner periodic payments required to meet the financial needs of the financial entity.

18. The method of creating a community of homeowners comprising providing an entity which provides financing for such homeowners to assist in purchasing homes;

and

2) issue mortgages to such homeowners with collaterally guaranteed promise which jointly and severally obligate each homeowner up to the value of his or her home to pay principal and interest for each other homeowner in the community who receives such a mortgage.

19. The method of claim 18 in which the entity purchases houses in volume at a discount for resale to homeowners.

22. The method of claim 18 in which the entity obtains funds and invests such funds in income producing endeavors.

23. The method of claim 18 including the further step of

causing the entity to purchase credit insurance to insure payments by the homeowners.

24. The method of claim 18 having the further step of causing the entity to issue notes and bonds of varying maturity.

25. The method of claim 24 in which the average maturity of notes and bonds is between 6 and 8 years.

26. A method of organizing a group of homeowners to purchase and finance such homes comprising

providing leaders to obtain a group of potential homeowners;

creating an entity to purchase and finance homes for such group of potential homeowners;

causing the entity to obtain a bridge loan to purchase houses for such potential homeowners;

purchasing such houses from an owner and causing the owner to transfer title to each potential homeowner;

simultaneously causing the entity to obtain mortgages from such homeowners including cross-collateralization promises;

causing the entity to issue bonds with staggering maturities to pay off the bridge loan; and

causing the entity to collect period payments from the homeowners which payments are adjusted to account for homeowners'"'"' arrears.

27. The method of claim 26 in which the title transferred is fee simple.