System and method for processing failed trades of mortgage backed securities

• US 20050222943A1
• Filed: 05/16/2005
• Published: 10/06/2005
• Est. Priority Date: 12/16/2003
• Status: Abandoned Application

• Current Assignee: Chapdelaine MBS LLC
• Original Assignee: Chapdelaine MBS LLC
• Inventors: Fiorentino, James, Monteleone, Leonard C.
• Application Number:
  US11/129,334
• Publication Number:
  US 20050222943A1
• 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 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

The present invention provides a system and method for trading mortgage-backed securities (“MBS”). A system for trading includes a plurality of workstations interconnected by a server. The workstations receive data representing inventories of their MBS pools, which in turn are delivered to the server. The server, in turn, is operable to perform a transaction based on an analysis of the inventory. One type of transaction includes a consolidation of like MBS pools found in different inventories in order to reduce the size of the inventories.

Claims

1. A server for processing failed trades of mortgage-backed securities comprising:

a processing unit operable to receive at least two inventories of mortgage-backed securities from computing devices associates with respective institutions;

said inventories including indicia associated with each said mortgage-backed security, said indicia including;

a financial institution uniquely identifying a holder of each mortgage-backed security in each of said inventories;

a Pool Number identifying each said mortgage-backed security;

a value of each said mortgage-backed security;

an indication whether said mortgage-backed security pool was a subject of a failed settlement;

said processing unit further operable to determine, based on said indicia, at least one said mortgage-backed security common to said inventories that reflect a failed trade of said mortgage-backed security between said of financial institutions;

said server further operable to generate a report identifying said failed trade.

2. The server according to claim 1 wherein said processing unit is further operable to determine a substitute mortgage-backed security pool from within said inventory that was not a subject of a failed settlement and which can substitute said common mortgage-backed security;

said processing unit further operable to include said substitute mortgage-backed security pool.

3. The server of claim 1 wherein said indicia includes an indication that said each said institution failed-to-deliver said common mortgage-backed security and failed-to-receive said common mortgage-backed security.

4. The server of claim 3 wherein said processing unit is operable to determine whether said failed trade was a round robin by examining said indicia within said failed trade and determining whether all of said institutions failed-to-deliver to another one of said institutions associated with said failed trade and failed-to-receive from another one of said institutions associated with said failed trade;

said processing unit further operable to include an indicator of said round robin in said report.

5. A method of processing failed trades of mortgage-backed securities comprising:

receiving at least two inventories of mortgage-backed securities from computing devices associated with institutions respective tos aid inventores;

said inventories including indicia associated with each said mortgage-backed security, said indicia including;

a financial institution uniquely identifying a holder of each mortgage-backed security in each of said inventories;

a Pool Number identifying each said mortgage-backed security;

a value of each said mortgage-backed security;

an indication whether said mortgage-backed security pool was a subject of a failed settlement;

determining, based on said indicia, at least one said mortgage-backed security common to said inventories that reflect a failed trade of said mortgage-backed security between said financial institutions;

generating a report identifying said failed trade.

6. The method of claim 5 comprising the additional steps of:

determining a substitute mortgage-backed security pool from within said inventory that was not a subject of a failed settlement and which can substitute said common mortgage-backed security;

including said substitute mortgage-backed security pool in said report.

7. The method of claim 6 wherein said indicia includes an indication that said each said institution failed-to-deliver said common mortgage-backed security and failed-to-receive said common mortgage-backed security;

said method comprising the additional steps of;

determining whether said failed trade was a round robin by examining said indicia within said failed trade, in order to ascertain whether all of said institutions failed-to-deliver to another one of said institutions associated with said failed trade and failed-to-receive from another one of said institutions associated with said failed trade; and

,

including an indicator of said round robin in said report.

8. A memory for storing data for access by an application program being executed on a data processing system, comprising:

a data structure stored in said memory, said data structure including information resident in a database used by said application program and including;

an inventory of mortgage-backed securities associated with an institution respective to said inventory;

said inventory including indicia associated with each said mortgage-backed security, said indicia including;

a financial institution uniquely identifying a holder of each mortgage-backed security in said inventory;

a Pool Number identifying each said mortgage-backed security;

a value of each said mortgage-backed security;

an indication whether said mortgage-backed security pool was a subject of a failed settlement.

9. The memory of claim 8 wherein said indicia further includes an indication as to whether said institution failed-to-deliver said mortgage-backed security and/or failed-to-receive said mortgage backed security.