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Method and apparatus for monitoring the collateral risk analysis for commodity lenders

  • US 20050149433A1
  • Filed: 10/25/2004
  • Published: 07/07/2005
  • Est. Priority Date: 10/23/2003
  • Status: Active Grant
First Claim
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1. A method of determining risk index for a collateral loan made on a commodity/asset, comprising the steps of:

  • (a) using computing means having a central processing unit to gather from one or more data sources a total number of closed sales, Sc, in a particular commodity market in said period;

    (b) using said computing means to gather from one or more data sources a total number of sales which are pending, Sp, in said particular commodity market in said period;

    (c) using said computing means to gather from one or more data sources a total number of expired listings, Le, in said particular commodity market in said period;

    (d) using said computing means to gather from one or more data sources a total number of active listings La, in said particular commodity market in said period;

    (e) determining a market index, Mi, indicative of the strength of said particular commodity market over a period consisting of a length of days, Pd, in accordance with Mi=(Sp+Sc)2Pd

    La

    (Sc+Sp+Le)
    ;

    (f) determining the proportion of the loan balance, B, to the value of the commodity, V;

    (g) determining the collateral risk index, CRi by dividing the market index, Mi, by the loan balance proportion, P; and

    (h) determining if action is required on the collateral loans by a certain Collateral Risk Index range to reduce the risk of loss, and if so, what action.

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