Home equity insurance financial product

• US 20030110122A1
• Filed: 12/07/2001
• Published: 06/12/2003
• Est. Priority Date: 12/07/2001
• Status: Abandoned Application

• Current Assignee: New York University, Yale University
• Original Assignee: New York University
• Inventors: Nalebuff, Barry J., Caplin, Andrew
• Application Number:
  US10/011,829
• Publication Number:
  US 20030110122A1
• Time in Patent Office: Days
• US Class Current: 705/38
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A novel financial product and associated data processing system provide risk abatement to purchasers of real estate and/or other assets that are financed and are subject to market valuation changes. The product includes application of a time dependent property index value for adjusting mortgage debt repayment in response to declining property values. The system permits enhanced and expanded lending in targeted neighborhoods on a selected basis.

Claims

1. In combination in a system for managing a plurality of accounts corresponding to loan products wherein said system comprises:

a. data input processor wherein said data includes account data corresponding to borrowers and/or buyers of real estate assets and financing data associated with credit to support asset purchases;

b. market change processor wherein data corresponding to market valuations of asset classes is utilized in an index format to track market value changes of said financed assets; and

c. debt reduction processor that reduces the stored value of an outstanding loan in response to changes in said index.

2. The system of claim 1 wherein said system operates on an event driven basis.

3. The system of claim 2 wherein said events include the sale of the asset and the refinancing of said credit.

4. The system of claim 1 wherein the system operates on a time basis over predefined periods.

5. The system of claim 2 wherein the period is an adjustment cycle wherein an updated index is utilized to discern market value changes in said asset.

6. A novel financial instrument coupled to a lending instrument comprising:

time variant risk abatement by tracking changes in an index associated with aggregate changes—

select real estate transactions;

future lending instrument adjustments responsive to a time-based drop in real estate valuation determined by said index; and

final debt reduction commensurate with a measured drop in index value to insure against negative market movements.

7. The financial instrument of claim 6 wherein data associated therewith is processed by one or more computer systems.

8. The financial instrument of claim 6 wherein said lending instrument is a mortgage product distributed by a lending institution.

9. The instrument of claim 7 wherein said lending institution is a bank.

10. The instrument of claim 6 wherein said index is an aggregate value, based on recently consummated real estate transactions within a select region.

11. The instrument of claim 6 wherein said final debt reduction corresponds to a mortgage transaction.

12. The instrument of claim 11 wherein said mortgage transaction is selected from the group consisting of:

property sale and note refinance.

13. In combination in a computer processing system for managing a plurality of user accounts, said system comprising:

input subsystem coupled to system memory for receiving and storing information regarding one or more users, wherein said information is stored with an account structured and organized for said user data, said user data further comprising information on the identity of said user and financial information specific to said user;

said input/output subsystem further comprising access to memory for storing information regarding one or more real estate properties, said real estate property information including information sufficient to establish a unique identification of said property, said real estate information further comprising data associated with an initial market valuation for said property;

data processing subsystem coupled to system memory for receiving data sufficient to generate a risk abatement instrument corresponding to one or more user accounts, wherein said instrument provides insurance to said user from losses resulting from a drop in market value over a select period of time of said real estate property associated with said instruments;

said data processing subsystem further provides an instrument term structure in human readable form for selective output to one or more users;

output subsystem coupled to system memory for receiving said instrument term information and providing this information in human readable format.

14. The system of claim 13 wherein said risk abatement instrument is coupled to a time-dependent real estate index value for selectively determining market charges in a predefined real estate marketplace.

15. The system of claim 13 wherein said memory includes plural memory addresses associated with user accounts to support lending institution underwriting protocols.