Method and system for structuring a mortgage

• US 20070288354A1
• Filed: 05/24/2006
• Published: 12/13/2007
• Est. Priority Date: 05/24/2006
• Status: Active Grant

• Current Assignee: Crew Financial LLC
• Original Assignee: Crew Financial LLC
• Inventors: Schulman, Henry Evan C., LeClair, Raymond A.
• Granted Patent: US 8,185,456 B2
• 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

Abstract

Methods and systems are configured to structure a collateralized loan such that a borrower'"'"'s future income is factored into the determination of payment amounts due to a lender. The methods and systems disclosed herein provide benefits to both lenders and borrowers and, regarding real estate purchases, may expand the pool of buyers that qualify for certain mortgage amounts.

Claims

1. A method of structuring a collateralized loan, comprising:

a lender specifying to a borrower an algorithm for determining payment amounts due from the borrower to the lender for repayment of a collateralized loan, the payment amounts being a function of at least a future income of the borrower.

2. The method of claim 1, wherein the future income of the borrower comprises a realized income measured in the future for a then-completed time period.

3. The method of claim 2, wherein the future income of the borrower comprises a plurality of realized incomes measured in the future for a plurality of then-completed time periods.

4. The method of claim 2, wherein the algorithm for determining the payment amounts is specified to determine a payment amount for a selected time interval as a function of the realized income.

5. The method of claim 4, wherein the percentage of the realized income is specified to be computed at least by applying a multiplier to the realized income.

6. The method of claim 5, wherein the loan has a loan term, and further comprising:

providing a projected future income of the borrower; and

determining a value for the multiplier, wherein said multiplier value would result in a full repayment of the loan at approximately the end of the loan term were a realized future income to equal the projected income.

7. The method of claim 5, wherein the loan has a loan term, and a value for the multiplier is specified to remain constant throughout the loan term.

8. The method of claim 5, wherein the loan has a loan term, and a value for the multiplier is specified to be changed during the loan term.

9. The method of claim 5, wherein the loan has a loan term, and a value for the multiplier is specified to be redetermined during the loan term.

10. The method of claim 2, further comprising specifying times for measuring a realized income and for determining payment amounts applicable to associated selected time intervals based on the measured realized income.

11. The method of claim 10, wherein at least one of the specified times for measuring a realized income occurs at or before a beginning of a selected time interval associated with the at least one specified time.

12. The method of claim 10, wherein at least one of the specified times for measuring a realized income occurs at or after completion of a selected time interval associated with the at least one specified time.

13. The method of claim 2, further comprising:

providing a plurality of income ranges for the future;

measuring a realized income for a completed time period;

determining which range of the plurality of income ranges includes the realized income; and

determining a payment amount based on the range that includes the realized income.

14. The method of claim 6, further comprising:

specifying a future time for measuring a realized income; and

at said future time, computing an updated projected future income of the borrower based on at least the measured realized income, and

determining an updated value for the multiplier, wherein said updated multiplier value would result in a full repayment of the loan at approximately the end of the loan term were a realized future income to equal the updated projected future income.

15. The method of claim 1, wherein the algorithm specifies a maximum payment amount limit for at least one of the payment amounts.

16. The method of claim 1, wherein the algorithm specifies a minimum payment amount limit for at least one of the payment amounts.

17. The method of claim 1, wherein the future income of the borrower comprises a projected future income.

18. The method of claim 17, wherein the projected future income is at least in part set forth in a table including projected income values for a plurality of time periods.

19. The method of claim 17, wherein the projected future income comprises a function which provides a projected future income value and which uses at least a baseline income and time as inputs.

20. The method of claim 17, wherein the algorithm for determining payment amounts is specified to determine a payment amount for a selected time interval as a function of a percentage of the projected future income.

21. The method of claim 17, wherein the algorithm for determining payment amounts is specified to determine the payment amount for a selected time interval to be the percentage of the projected future income.

22. The method of claim 20, wherein the percentage of the projected future income is determined by applying a multiplier to the projected future income.

23. The method of claim 22, wherein the loan has a loan term and a value for the multiplier is specified to remain constant throughout the loan term.

24. The method of claim 22, wherein the loan has a loan term and a value for the multiplier is specified to be change during the loan term.

25. The method of claim 17, wherein the loan has a loan term and the specified algorithm determines payment amounts that will result in a full repayment of the loan at approximately the end of the loan term.

26. The method of claim 17, wherein the payment amounts are a function of a plurality of projected future income values for a plurality of selected future time periods.

27. The method of claim 26, further comprising determining at least some of the payment amounts by using the algorithm and the plurality of projected future income values.

28. The method of claim 1, further comprising specifying an amortization schedule for the payment amounts which are determinable with the algorithm, the amortization schedule specifying what amount of each payment amount is to be applied to paying interest and what amount of each payment amount is to be applied to paying principal.

29. The method of claim 1, further comprising the lender specifying to the borrower that the lender share in appreciation of the asset with which the loan is collateralized.

30. The method of claim 1, wherein the lender shares in appreciation of the asset with which the loan is collateralized if certain criteria are met.

31. The method of claim 1, further comprising the lender specifying to the borrower that the difference between a payment amount and amount of interest accrued is added to a remaining principal when the payment amount applicable to a time interval is less than the interest accrued during the time interval.

32. The method of claim 1, further comprising the lender specifying to the borrower that a term of the loan is extended when a payment amount for a time interval is less than an amount of interest accrued during the time interval.

33. The method of claim 1, further comprising the lender specifying to the borrower that an interest rate applicable to a time interval is reduced at least by an amount that is sufficient to avoid negative amortization of the loan that when a payment amount for a time interval is less than an amount of interest accrued during the time interval.

34. The method of claim 1, wherein the collateralized loan is a mortgage on certain real estate, and that real estate is the collateral.

35. A method of financing the purchase of an asset comprising:

a lender entering into a contract with a borrower who is purchasing the asset, the contract providing that the lender will loan a principal amount to the borrower and the borrower will make loan payments to the lender during a loan term, the contract further providing that during at least a portion of the loan term, the loan payments will be made in an amount that is calculated as a function of a future income of the borrower.

36. The method of claim 35, wherein the contract provides that the future income of the borrower comprises a projected future income of the borrower.

37. The method of claim 36, wherein the contract provides that the loan payment amounts are determined to be a percentage of the projected future income of the borrower.

38. The method of claim 36, wherein the contract provides that, at a selected point in time during the loan term, the projected future income of the borrower will be adjusted using a historical income of the borrower, the historical income having been received during a time period that ended at or before the selected point in time.

39. The method of claim 36, wherein the contract provides that the projected future income of the borrower is calculated by applying a rate of increase to a historical income of the borrower.

40. The method of claim 36, wherein the contract provides that at least one projected future income of the borrower is calculated based on a historical income of the borrower that occurred during a time period completed before a beginning of the loan term.

41. The method of claim 35, wherein the contract provides that the future income comprises a historical income to be measured at a point in time in the future, the historical income being measured for a time period that ended at or before said point in time.

42. The method of claim 41, wherein the contract provides that loan payment amounts will be determined based on at least a historical income as time periods are completed.

43. The method of claim 42, wherein the contract provides that a payment amount, which will be determined based on a historical income for a selected time period, will be used as a payment amount that applies to at least a portion of a loan interval that corresponds to the selected time period.

44. The method of claim 42, wherein the contract provides that a payment amount, which will be determined based on a historical income for a selected time period, will be used as a payment amount that applies to at least a portion of a loan interval subsequent to the selected time period.

45. The method of claim 41, wherein the contract provides that the loan payment amounts will be determined to be a percentage of the historical income.

46. The method of claim 35, wherein the contract provides that payment amounts will be calculated as a percentage of a future income of the borrower.

47. The method of claim 35, wherein the contract provides that payment amounts will be limited to a maximum payment amount.

48. The method of claim 35, wherein the contract provides that payment amounts will be limited by a minimum payment amount.

49. The method of claim 36, further comprising receiving values for the projected future income from an external entity.

50. The method of claim 36 further comprising computing values for the projected future income.

51. A method of pooling a plurality of collateralized loans, comprising:

entering into and/or purchasing a plurality of collateralized loans on the lender side, each loan having a borrower;

wherein

each loan specifies that the borrower will pay to the lender a payment amount, the payment amount to be determined at least in part as a function of income received by the borrower during an interval of a term of the loan.

52. The method of claim 51, wherein the collateralized loans comprise mortgages and the collateral comprises specified real estate.

53. The method of claim 51, wherein at least two of the collateralized loans have a different entity as the respective borrower.