Data processing system and method incorporating feedback

• US 20060089895A1
• Filed: 10/13/2005
• Published: 04/27/2006
• Est. Priority Date: 10/13/2004
• Status: Active Grant

• Current Assignee: ARES Capital Management Pty Limited
• Original Assignee: ARES Capital Management Pty Limited
• Inventors: Joye, Christopher Ronald Edward, Bertram, Glen Geoffrey, Oldfield, Sean
• Granted Patent: US 7,792,722 B2
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes

Abstract

A data processing system and method are disclosed which finds particular application to equity finance mortgages. An Overall System (600) is formed from a Target Investment System (100), an Asset Origination System (200), an Asset Securitization System (400), an Asset Servicing System (300) and an Asset Management System (500). Financial feedback is applied to ensure targets are achieved. Mortgages are pooled and on-sold to investors and selected for acceptance on the basis of preferences expressed by the investors.

Claims

1. A data processing system to enable an entity to use a range of decision-rules to evaluate in real time or on a batch basis applications from consumers to enter into financial arrangements with a financing entity for financial accommodation in which an asset is used as collateral, with an ultimate objective of said entity accepting or rejecting those applications, said system comprising:

(i) at least one data input terminal in which is input data relating to both the consumer and the financial accommodation applied for,

(ii) a data processing means connected with the or each of said input terminals, and

(iii) a data storage means connected with said data processing means and containing both initial portfolio data relating to said applications accepted to date which collectively characterise a financial portfolio of said financing entity, and desiderata data relating to desired characteristics of said portfolio, wherein said data processing means amalgamates said input data and said portfolio data to produce a modified portfolio data representative of said portfolio if said application were accepted and compares said modified portfolio data with said desiderata data and signals acceptance of said application only if the difference between said desiderata data and said modified portfolio data is less than the difference between said desiderata data and said initial portfolio data.

2. The system as claimed in claim 1 wherein said financial arrangement comprises:

(i) an advance of funds by the financing entity to the consumer equal to a first percentage of the value of said asset, and

(ii) an undertaking by the consumer to repay the financing entity said advance of funds plus a second percentage of any increase in, or less a third percentage of any decrease in, the value of said collateral asset in the event that at least one predetermined state arises, and/or

(iii) an undertaking by the consumer to repay the financing entity said advance of funds plus or minus said second and third percentages respectively, plus a fourth percentage of the value of said collateral asset on a recurring basis throughout the life of the financial arrangement, and/or

(iv) an undertaking by the consumer to repay the financing entity said advance of funds plus or minus said second and third percentages respectively, plus a supplementary payment related to standard variable or fixed interest rates on a recurring basis throughout the life of the financial arrangement, and/or

(v) an undertaking by the financing entity to compensate said consumer by way of set off for the value of improvements made to said collateral asset, and/or

(vi) provision allowing said consumer to refinance any higher priority financial arrangement based on formula/(e) preserving value of the lower priority financial arrangement to the financing entity.

3. The system as claimed in claim 2 wherein said second percentage is larger or smaller than said third percentage.

4. The system as claimed in claim 2 wherein said third percentage is equal to zero.

5. The system as claimed in claim 2 wherein said first and third percentages are equal.

6. The system as claimed in claim 2 wherein said second and third percentages are vary subject to a predetermined state.

7. The system as claimed in claim 6 wherein said predetermined state is selected from the group consisting of:

the attainment of a predetermined economic condition or the effluxion of a predetermined time.

8. The system as claimed in claim 2 wherein said second and third percentages are fixed until a predetermined time or state is achieved.

9. The system as claimed in claim 8 wherein said predetermined state is selected from the group consisting of:

the attainment of a predetermined economic condition or the effluxion of a predetermined time.

10. The system as claimed in claim 2 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

2;

1.

11. The system as claimed in claim 2 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

1;

1.

12. The system as claimed in claim 2 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

1.5;

0.

13. The system as claimed in claim 2 wherein said predetermined state is the sale by the consumer of the collateral asset.

14. The system as claimed in claim 2 wherein said predetermined state is selected from the group consisting of:

the effluxion of a predetermined time, the death of the consumer, the attainment of a predetermined economic condition, or the voluntary election of the consumer at any time prior to the expiry of said financial arrangement.

15. The system as claimed in claim 2 wherein said predetermined time is selected from the group consisting of any integer number of months or years.

16. A method of accepting, rejecting or referring in real time or on a batch basis applications from consumers to a financing entity for financial accommodation in which an asset is used as collateral, said method comprising the steps of:

(i) inputting into a data input terminal data relating to both the consumer and said financial accommodation, said data input terminal being connected to a data processing means to which is connected a data storage means,

(ii) storing in said data storage means both initial portfolio data relating to said applications accepted to date which collectively characterise a financial portfolio of said financing entity, and desiderata data relating to desired characteristics of said portfolio,

(iii) amalgamating said input data and said initial portfolio data to produce a modified portfolio data representative of said portfolio if said application were accepted,

(iv) comparing said modified portfolio data with said desiderata data, and

(v) accepting said application only if the difference between said desiderata data and said modified portfolio data is less than the difference between said desiderata data and said initial portfolio data.

17. The system as claimed in claim 16 wherein said financial arrangement comprises:

(i) an advance of funds by the financing entity to the consumer equal to a first percentage of the value of said asset, and

(ii) an undertaking by the consumer to repay the financing entity said advance of funds plus a second percentage of any increase in, or less a third percentage of any decrease in, the value of said collateral asset in the event that at least one predetermined state arises, and/or

(iii) an undertaking by the consumer to repay the financing entity said advance of funds plus or minus said second and third percentages respectively, plus a fourth percentage of the value of said collateral asset on a recurring basis throughout the life of the financial arrangement, and/or

(iv) an undertaking by the consumer to repay the financing entity said advance of funds plus or minus said second and third percentages respectively, plus a supplementary payment related to standard variable or fixed interest rates on a recurring basis throughout the life of the financial arrangement, and/or

(v) an undertaking by the financing entity to compensate said consumer by way of set off for the value of improvements made to said collateral asset, and/or

(vi) provision allowing said consumer to refinance any higher priority financial arrangement based on formula/(e) preserving value of the lower priority financial arrangement to the financing entity.

18. The system as claimed in claim 17 wherein said second percentage is larger or smaller than said third percentage.

19. The system as claimed in claim 17 wherein said third percentage is equal to zero.

20. The system as claimed in claim 17 wherein said first and third percentages are equal.

21. The system as claimed in claim 17 wherein said second and third percentages vary subject to a predetermined state.

22. The system as claimed in claim 21 wherein said predetermined state is selected from the group consisting of:

the attainment of a predetermined economic condition or the effluxion of a predetermined time.

23. The system as claimed in claim 17 wherein said second and third percentages are fixed until a predetermined time or state is achieved.

24. The system as claimed in claim 23 wherein said predetermined state is selected from the group consisting of:

the attainment of a predetermined economic condition or the effluxion of a predetermined time.

25. The system as claimed in claim 17 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

2;

1.

26. The system as claimed in claim 17 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

1;

1.

27. The system as claimed in claim 17 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

1.5;

0.

28. The system as claimed in claim 17 wherein said predetermined state is the sale by the consumer of the collateral asset.

29. The system as claimed in claim 17 wherein said predetermined state is selected from the group consisting of:

the effluxion of a predetermined time, the death of the consumer, the attainment of a predetermined economic condition, or the voluntary election of the consumer at any time prior to the expiry of the financial arrangement.

30. The system as claimed in claim 17 wherein said predetermined time is selected from the group consisting of any integer number of months or years.

31. A financial system for sourcing capital from third-parties providers and using that capital for the purposes of funding financial arrangements in which an asset is used as collateral that supply financial accommodation to a multiplicity of consumers each of which enters into one of said financial arrangements, wherein said financial arrangements are entered into only in respect of selected consumers and/or selected collateral assets based upon one or more characteristics of said collateral assets and/or consumers, and said characteristics are initially determined and/or modified over time based upon expressed preferences of said third-party providers of said capital.

32. The system as claimed in claim 31 wherein said financial arrangements are held by an investment vehicle into which said third-party providers of said financing capital and/or other entities invest.

33. The system as claimed in claim 32 wherein said investment vehicle is closed and comprises a fixed ensemble of said financial arrangements.

34. The system as claimed in claim 32 wherein said investment vehicle is open and comprises an ensemble of said financial arrangements to which additional financial arrangements are added from time to time.

35. The system as claimed in claim 34 wherein said characteristics of said additional financial arrangements differ from the initial financial arrangements as a result of a change in expressed preferences of said investors.

36. The system as claimed in claim 35 and comprising a feedback loop.

37. The system as claimed in claim 31 wherein said collateral assets are real estate assets and said characteristics of said real estate assets are selected from the group consisting of current value, expected future value, past returns, past relative returns, expected future returns, expected future relative returns, past risk, past relative risk, expected future risk, expected future relative risk, past correlations with other real estate assets, expected future correlations with other real estate assets, purchase by auction, purchase by private treaty, geographical location, title tenure, asset type, encumbrances, land size, compass orientation, building size, number and type of rooms, number of stories and material of construction.

38. The system as claimed in claim 31 wherein said characteristics of said consumers are selected from the group consisting of current income level, historical income level, gender, age, marital status, employment, previous borrowing history, previous ownership history, current address, nationality, past collateral asset maintenance performance, and expected future collateral asset maintenance performance.

39. The system as claimed in claim 31 wherein at least one of said financial arrangements is a mortgage.

40. The system as claimed in claim 39 wherein said mortgage comprises:

(i) an advance of funds by the mortgagee to the mortgagor equal to a first percentage of the value of the real estate asset that is used as collateral for the purposes of the mortgage, and

(ii) an undertaking by the mortgagor to repay the mortgagee said advance of funds plus a second percentage of any increase in, or less a third percentage of any decrease in, the value of said collateral real estate asset in the event that at least one predetermined state arises, and/or

(iii) an undertaking by the mortgagor to repay the mortgagee said advance of funds plus or minus said second and third percentages respectively, plus a fourth percentage of the value of said collateral real estate asset on a recurring basis throughout the life of the mortgage, and/or

(iv) an undertaking by the mortgagor to repay the mortgagee said advance of funds plus or minus said second and third percentages respectively, plus a supplementary payment related to standard variable or fixed interest rates on a recurring basis throughout the life of the mortgage, and/or

(v) an undertaking by the mortgagee to compensate said mortgagor by way of set off for the value of improvements made to said collateral real estate asset, and/or

(vi) provision allowing said mortgagor to refinance any higher priority mortgage based on formula/(e) preserving value of the lower priority mortgage to the mortgagee.

41. The system as claimed in claim 40 wherein said second percentage is larger or smaller than said third percentage.

42. The system as claimed in claim 40 wherein said third percentage is equal to zero.

43. The system as claimed in claim 40 wherein said first and third percentages are equal.

44. The system as claimed in claim 40 wherein said second and third percentages are vary subject to a predetermined state.

45. The system as claimed in claim 44 wherein said predetermined state is selected from the group consisting of:

the attainment of a predetermined economic condition or the effluxion of a predetermined time.

46. The system as claimed in claim 40 wherein said second and third percentages are fixed until a predetermined time or state is achieved.

47. The system as claimed in claim 46 wherein said predetermined state is selected from the group consisting of:

the attainment of a predetermined economic condition or the effluxion of a predetermined time.

48. The system as claimed in claim 40 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

2;

1.

49. The system as claimed in claim 40 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

1;

1.

50. The system as claimed in claim 40 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

1.5;

0.

51. The system as claimed in claim 40 wherein said predetermined state is the sale by the mortgagor of the collateral real estate asset.

52. The system as claimed in claim 40 wherein said predetermined state is selected from the group consisting of:

the effluxion of a predetermined time, the death of the mortgagor, the attainment of a predetermined economic condition, or the voluntary election of the mortgagor at any time prior to the expiry of the mortgage.

53. The system as claimed in claim 40 wherein said predetermined time is selected from the group consisting of any integer number of months or years.

54. The system as claimed in claim 32 wherein the multiplicity of financial arrangements after being underwritten or warehoused by a first entity are on-sold or assigned to a second investment vehicle.

55. The system as claimed in claim 32 wherein said investment vehicle has a multiplicity of equity, debt, convertible, hybrid or derivative units.

56. The system as claimed in claim 55 wherein said equity, debt, convertible, hybrid or derivative units are publicly listed and traded.

57. The system as claimed in claim 55 wherein said equity, debt, convertible, hybrid or derivative units are not publicly listed.

58. A computer implemented financial system for maintaining a close approximation between an actual pool of investments and a desired pool of investments, said system having an investment mandate specifying target values for a plurality of investment characteristics each of which is stored in a memory bank operated by said system, said system further having a data store in which is maintained the actual values of said plurality of investment characteristics of said actual pool of investments, said system comparing the values in said memory bank and said data store, and permitting as additions to said actual pool of investments only those additional investments having investment characteristics which reduce the difference between said target values and said actual values.

59. The system as claimed in claim 58 wherein said investments comprise mortgages over real estate assets.

60. The system as claimed in claim 59 wherein said mortgages are wholly or partially collateral-dependent.

61. The system as claimed in claim 60 wherein said wholly or partial collateral-dependent mortgage comprises:

(i) an advance of funds by the mortgagee to the mortgagor equal to a first percentage of the value of the real estate asset that is used as collateral for the purposes of the wholly or partial collateral-dependent mortgage, and

(ii) an undertaking by the mortgagor to repay the mortgagee said advance of funds plus a second percentage of any increase in, or less a third percentage of any decrease in, the value of said collateral real estate asset in the event that at least one predetermined state arises, and/or

(iii) an undertaking by the mortgagor to repay the mortgagee said advance of funds plus or minus said second and third percentages respectively, plus a fourth percentage of the value of said collateral real estate asset on a recurring basis throughout the life of the wholly or partial collateral-dependent mortgage, and/or

(iv) an undertaking by the mortgagor to repay the mortgagee said advance of funds plus or minus said second and third percentages respectively, plus a supplementary payment related to standard variable or fixed interest rates on a recurring basis throughout the life of the wholly or partial collateral-dependent mortgage, and/or

(v) an undertaking by the mortgagee to compensate said mortgagor by way of set off for the value of improvements made to said collateral real estate asset, and/or

(vi) provision allowing said mortgagor to refinance any higher priority mortgage based on formula/(e) preserving value of said wholly or partial collateral-dependent mortgage to the mortgagee.

62. The system as claimed in claim 61 wherein said second percentage is larger or smaller than said third percentage.

63. The system as claimed in claim 61 wherein said third percentage is equal to zero.

64. The system as claimed in claim 61 wherein said first and third percentages are equal.

65. The system as claimed in claim 61 wherein said second and third percentages vary subject to a predetermined state.

66. The system as claimed in claim 65 wherein said predetermined state is selected from the group consisting of:

the attainment of a predetermined economic condition or the effluxion of a predetermined time.

67. The system as claimed in claim 61 wherein said second and third percentages are fixed until a predetermined time or state is achieved.

68. The system as claimed in claim 67 wherein said predetermined state is selected from the group consisting of:

the attainment of a predetermined economic condition or the effluxion of a predetermined time.

69. The system as claimed in claim 61 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

2;

1.

70. The system as claimed in claim 61 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

1;

1.

71. The system as claimed in claim 61 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

1.5;

0.

72. The system as claimed in claim 61 wherein said predetermined state is the sale by the mortgagor of the collateral real estate asset.

73. The system as claimed in claim 61 wherein said predetermined state is selected from the group consisting of:

the effluxion of a predetermined time, the death of the mortgagor, the attainment of a predetermined economic condition, or the voluntary election of the mortgagor at any time prior to the expiry of the wholly or partially collateral-dependent mortgage.

74. The system as claimed in claim 61 wherein said predetermined time is selected from the group consisting of any integer number of months or years.

75. A computer implemented system for remunerating by commission financial intermediaries who introduce financial arrangements to an investment pool comprising those financial arrangements, said system having a memory bank in which is stored target values for a plurality of characteristics of said investment pool, said system further having a data store in which is stored the corresponding characteristics of each proposed said financial arrangement to be introduced, and said system comparing the target characteristics and proposed characteristics, admitting to said investment pool only those proposed financial arrangements which are within a predetermined threshold of said target characteristics, and calculating a commission for the introducing financial intermediary which commission varies with variations in the differences between said target and proposed characteristics.

76. The system as claimed in claim 75 wherein the introducing financial intermediary'"'"'s commission is also dependent on its past financial arrangement sourcing performance.

77. The system as claimed in claim 75 wherein each said financial arrangement is a wholly or partially collateral-dependent financial arrangement.

78. The system as claimed in claim 75 wherein said wholly or partially collateral-dependent financial arrangement comprises:

(i) an advance of funds by the financing entity to the consumer equal to a first percentage of the value of the asset that is used as collateral for the purposes of the financial arrangement, and

(ii) an undertaking by the consumer to repay the financing entity said advance of funds plus a second percentage of any increase in, or less a third percentage of any decrease in, the value of said collateral asset in the event that at least one predetermined state arises, and/or

(iii) an undertaking by the consumer to repay the financing entity said advance of funds plus or minus said second and third percentages respectively, plus a fourth percentage of the value of said collateral asset on a recurring basis throughout the life of the financial arrangement, and/or

(iv) an undertaking by the consumer to repay the financing entity said advance of funds plus or minus said second and third percentages respectively, plus a supplementary payment related to standard variable or fixed interest rates on a recurring basis throughout the life of the financial arrangement, and/or

(v) an undertaking by the financing entity to compensate said consumer by way of set off for the value of improvements made to said collateral asset, and/or

(vi) provision allowing said consumer to refinance any higher priority financial arrangement based on formula/(e) preserving value of the lower priority financial arrangement to the financing entity.

79. The system as claimed in claim 78 wherein said second percentage is larger or smaller than said third percentage.

80. The system as claimed in claim 78 wherein said third percentage is equal to zero.

81. The system as claimed in claim 78 wherein said first and third percentages are equal.

82. The system as claimed in claim 78 wherein said second and third percentages are vary subject to a predetermined state.

83. The system as claimed in claim 82 wherein said predetermined state is selected from the group consisting of:

the attainment of a predetermined economic condition or the effluxion of a predetermined time.

84. The system as claimed in claim 78 wherein said second and third percentages are fixed until of a predetermined time or state is achieved.

85. The system as claimed in claim 84 wherein said predetermined state is selected from the group consisting of:

the attainment of a predetermined economic condition or the effluxion of a predetermined time.

86. The system as claimed in claim 78 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

2;

1.

87. The system as claimed in claim 78 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

1;

1.

88. The system as claimed in claim 78 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

1.5;

0.

89. The system as claimed in claim 78 wherein said predetermined state is the sale by the consumer of the collateral asset.

90. The system as claimed in claim 78 wherein said predetermined state is selected from the group consisting of:

the effluxion of a predetermined time, the death of the consumer, the attainment of a predetermined economic condition, or the voluntary election of the consumer at any time prior to the expiry of the financial wholly or partially collateral-dependent arrangement.

91. The system as claimed in claim 78 wherein said predetermined time is selected from the group consisting of any integer number of months or years.

92. A computer implemented financial system for maintaining a close approximation between an actual pool of investments and a desired pool of investments, said investment pool comprising financial arrangements each between a consumer seeking financial accommodation and an entity willing to provide such financial accommodation, said system having an investment mandate specifying target values for a plurality of investment characteristics each of which is stored in a memory bank operated by said system, said system further having a data store in which is maintained the actual values of said plurality of investment characteristics of said actual pool of investments, said system comparing the values in said memory bank and said data store, and altering the obligations of each said consumer under said financial arrangements to reduce the difference between said target values and said actual values.

93. The system as claimed in claim 92 wherein each said financial arrangement is a wholly or partially collateral-dependent financial arrangement.

94. The system as claimed in claim 92 wherein said wholly or partially collateral-dependent financial arrangement comprises:

(i) an advance of funds by the financing entity to the consumer equal to a first percentage of the value of the asset that is used as collateral for the purposes of the financial arrangement, and

(ii) an undertaking by the consumer to repay the financing entity said advance of funds plus a second percentage of any increase in, or less a third percentage of any decrease in, the value of said collateral asset in the event that at least one predetermined state arises, and/or

(iii) an undertaking by the consumer to repay the financing entity said advance of funds plus or minus said second and third percentages respectively, plus a fourth percentage of the value of said collateral asset on a recurring basis throughout the life of the financial arrangement, and/or

(iv) an undertaking by the consumer to repay the financing entity said advance of funds plus or minus said second and third percentages respectively, plus a supplementary payment related to standard variable or fixed interest rates on a recurring basis throughout the life of the financial arrangement, and/or

(v) an undertaking by the financing entity to compensate said consumer by way of set off for the value of improvements made to said collateral asset, and/or

(vi) provision allowing said consumer to refinance any higher priority financial arrangement based on formula/(e) preserving value of the lower priority financial arrangement to the financing entity.

95. The system as claimed in claim 94 wherein said second percentage is larger or smaller than said third percentage.

96. The system as claimed in claim 94 wherein said third percentage is equal to zero.

97. The system as claimed in claim 94 wherein said first and third percentages are equal.

98. The system as claimed in claim 94 wherein said second and third percentages vary subject to a predetermined state.

99. The system as claimed in claim 98 wherein said predetermined state is selected from the group consisting of:

the attainment of a predetermined economic condition or the effluxion of a predetermined time.

100. The system as claimed in claim 94 wherein said second and third percentages are fixed until a predetermined time or state is achieved.

101. The system as claimed in claim 100 wherein said predetermined state is selected from the group consisting of:

the attainment of a predetermined economic condition or the effluxion of a predetermined time.

102. The system as claimed in claim 94 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

2;

1.

103. The system as claimed in claim 94 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

1;

1.

104. The system as claimed in claim 94 wherein said first percentage, said second percentage and said third percentage are in the ratio of 1:

1.5;

0.

105. The system as claimed in claim 94 wherein said predetermined state is the sale by the consumer of the collateral asset.

106. The system as claimed in claim 94 wherein said predetermined state is selected from the group consisting of:

the effluxion of a predetermined time, the death of the consumer, the attainment of a predetermined economic condition, or the voluntary election of the consumer at any time prior to the expiry of the financial wholly or partially collateral-dependent arrangement.

107. The system as claimed in claim 94 wherein said predetermined time is selected from the group consisting of any integer number of months or years.

108. The system as claimed in claim 94 wherein the altered obligation of a consumer is selected from the group consisting of said first, second, third and fourth percentages, and said maximum effluxion of time.

109. A method of accepting, rejecting or referring in real time or on a batch basis a request for re-financing approval from mortgagors having both a substantially conventional interest-bearing mortgage with a first financial institution and a second wholly or partially collateral-dependent mortgage with a second financial institution, said request for re-financing approval being made to said second financial institution and both said mortgages being secured over the same property, said method comprising the steps of:

(i) inputting into a data input terminal a new value of said property arising from a recent valuation thereof, and a re-financing amount, said data input terminal being connected to a data processing means to which is connected a data storage means,

(ii) storing in said data storage means an initial value of said property, the principal of said first mortgage, the principal of said second mortgage, first and second predetermined percentages, and the data required to calculate a current repayment amount of said second mortgage, and including rise and fall percentages,

(iii) using said data processing means to calculate a base refinancing amount being the product of said first predetermined percentage and said first mortgage principal,

(iv) using said data processing means to calculate the current repayment amount of said second mortgage based said new value of said property and said rise and fall percentages,

(v) using said data processing means to calculate an adjusting refinancing amount being the product of said second predetermined percentage and said current repayment amount,

(vi) using said data processing means to subtract said adjusting refinancing amount from said base refinancing amount to give a resultant refinancing amount, and

(v) accepting said request for refinancing only if said refinancing amount for which approval is sought is less than said resultant refinancing amount.

110. The system as claimed in claim 109 wherein said wholly or partially collateral-dependent mortgage is a subordinated security relative to said substantially conventional interest-bearing mortgage.

111. The system as claimed in claim 109 wherein said wholly or partially collateral-dependent mortgage is an equally ranking security to said substantially conventional interest-bearing mortgage.

112. A method of generating a digitally encoded electric signal representing the quantum of a credit for home improvements made to the mortgagor in a wholly or partially collateral-dependent mortgage, said method comprising the steps of:

(i) inputting into data processing apparatus input data comprising the principal of said mortgage, a first valuation of the home just prior to said improvements being carried out, a second valuation of said home just after said improvements have been carried out, and a final value of said home including said improvements being a sale or deemed sale thereof which concludes said mortgage,

(ii) instructing said data processing apparatus to calculate an improvement difference comprising the increase of said second valuation relative to said first valuation, and to calculate an overall difference comprising said final valuation less said principal, and

(iii) further instructing said data processing apparatus to output either one of two of said digitally encoded electric signals, a first said signal representing a quantum of zero if said overall difference is negative or zero, and a second said signal representing a quantum of said improvement difference if said overall difference is positive.

113. A method of generating a digitally encoded electric signal representing the quantum of an adjusted principal of a wholly or partially collateral-dependent mortgage which provides that the principal be adjusted by augmenting same by a first percentage of the increase in the event of an increase in the value of the property securing the wholly or partially collateral-dependent mortgage and that the principal be adjusted by decreasing same by a second percentage of the decrease in the event of a decrease in the value of the property securing the wholly or partially collateral-dependent mortgage, said method comprising the steps of:

(i) inputting into data processing apparatus input data comprising the principal of said wholly or partially collateral-dependent mortgage, said first and second percentages, a toggle marker consisting either of a first value indicative of the adjusted principal being determined in accordance with one of a number of predetermined events, or of a second value indicative an election of early pre-payment by the mortgagor, and a final value of said property being either a sale or an approved valuation of the property,

(ii) instructing said data processing apparatus to calculate a capital difference between said final value and said principal, and if said toggle marker is of said first value to calculate the adjusted principal by multiplying said capital difference by said first or said second percentage respectively,

(iii) further instructing said data processing apparatus if said toggle marker is said second value to set said second percentage at zero and calculate the adjusted principal by multiplying said capital difference by said first or said re-set second percentage, and

(iv) still further instructing said data processing apparatus to output a digitally encoded electric signal representing the quantum of said adjusted principal.