Computer System for Actively Monitoring and Enhancing the Collateral Security for a Portfolio of Loans to Facilitating Financing and Securitization

• US 20080249809A1
• Filed: 08/08/2005
• Published: 10/09/2008
• Est. Priority Date: 08/06/2004
• Status: Active Grant

• Current Assignee: Matsushita Electric Industrial Company Limited (Panasonic Holdings Corporation)
• Original Assignee: Matsushita Electric Industrial Company Limited (Panasonic Holdings Corporation)
• Inventors: Rosen, Jonathan D., DeWitt, Robert E., Bush, Paul A., Metzger, David E.
• Granted Patent: US 7,797,214 B2
• Time in Patent Office: Days
• US Class Current: 705/4
• 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 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A computer system for monitoring and enhancing the collateral security underlying a set of loans is provided, including a system for calculating the unsecured value of the set at any time and for initialing additional collateral enhancement instruments when the unsecured value exceeds a certain limit. The system may include a variety of modules in communication with a relational database for storing data about the loans and system elements. The computer system may also be configured to allocate, manage, and execute the waterfall or cascade of funds between and among the various participants in a financial plan. The invention also includes a structured finance plan and related methods for enhancing the collateral security of a loan obtained for a life insurance or annuity product, and a system and method for managing a portfolio of such loans in order to obtain favorable financing and to facilitate securitization.

Claims

1-49. -49. (canceled)

50. A financing structure, comprising:

a portfolio of loans, each loan obtained by a borrower from a loan originator to purchase a life insurance product wherein an employee is an insured;

one or more gap enhancement instruments for reducing a current gap value associated with said product, said current gap value representing the difference between a premium paid and a current value of said product, said one or more instruments comprising;

(a) a promissory note for said loan executed by said borrower in favor of said loan originator;

(b) a collateral assignment of said product executed by an insured in favor of said borrower;

(c) an asset of said borrower pledged to said loan originator as collateral for said loan; and

a credit facility for funding said portfolio of loans, said credit facility having terms responsive to the presence of said one or more gap enhancement instruments, said terms being more favorable to said borrower.

51. The financing structure of claim 50, wherein said terms are more favorable than would be available for an individual loan selected from said portfolio of loans.

52. The financing structure of claim 50, wherein said collateral assignment of said product is executed in favor of said loan originator.

53. The financing structure of claim 50, wherein said one or more gap enhancement instruments further comprises:

a compensation agreement between said employee and said borrower, wherein said borrower is an employer of said employee.

54. The financing structure of claim 50, wherein said one or more gap enhancement instruments further comprises:

a UCC-1 statement filed to memorialize the pledging of said asset.

55. The financing structure of claim 50, wherein said one or more gap enhancement instruments further comprises:

an agreement to postpone payment of a portion of a commission earned on the sale of said product.

56. The financing structure of claim 50, wherein said one or more gap enhancement instruments further comprises:

a rider on said product waiving a portion of a surrender fee, in favor of said loan originator, said surrender fee representing an amount charged in the event said product is surrendered or said employer defaults on said loan.

57. The financing structure of claim 50, wherein said one or more gap enhancement instruments further comprises:

an agreement to deposit funds in a reserve account, said funds representing a portion of a surrender fee, said surrender fee representing an amount charged in the event said product is surrendered or said employer defaults on said loan.

58. The financing structure of claim 50, wherein said one or more gap enhancement instruments further comprises:

an agreement by an insurer, in the event of a surrender or default event, to extend a loan to said loan originator in an amount approximately equal to said current gap value, wherein said loan originator'"'"'s repayment obligation to said insurer is ultimately secured by said pledged asset.

59. The financing structure of claim 50, wherein said one or more gap enhancement instruments further comprises:

an agreement by an insurer to pay a marketing allowance to said loan originator, said marketing allowance including a portion of the costs associated with marketing said product.

60. The financing structure of claim 50, wherein said portfolio has an aggregate risk based on said current gap value of each product in said portfolio, said aggregate risk reduced at least in part by said one or more gap enhancement instruments,

and wherein said credit facility comprises a loan purchaser to issue one or more variable funding notes, said notes made suitable for purchase by a VFN purchaser at least in part due to said aggregate risk.

61. The financing structure of claim 50, wherein said portfolio has an aggregate risk based on said current gap value of each product in said portfolio, said aggregate risk reduced at least in part by said one or more gap enhancement instruments,

and wherein said credit facility comprises a bankruptcy-remote special purpose entity to receive said a portion of said portfolio of loans in a true sale transaction, said transaction made possible at least in part by said aggregate risk.

62. The financing structure of claim 50, wherein said portfolio has an aggregate risk based on said current gap value of each product in said portfolio, said aggregate risk reduced at least in part by said one or more gap enhancement instruments,

and wherein said credit facility comprises an investment bank to issue asset-backed security interests in said portfolio of loans, suitable for trading in the capital markets to multiple investors.

63. The financing structure of claim 62, wherein said asset-backed security interests comprise commercial paper.

64. The financing structure of claim 62, wherein said asset-backed security interests comprise a ratable pool of asset-backed securities.

65. A business structure, comprising:

a loan obtained by a borrower from a loan originator;

a life insurance product purchased using the proceeds of said loan and naming an employee as an insured, wherein said product has a current gap value, said current gap value representing the difference between a premium paid and a current value of said product; and

one or more gap enhancement instruments for reducing said current gap value, said one or more instruments comprising;

(a) a promissory note for said loan executed by said borrower in favor of said loan originator;

(b) a collateral assignment of said product executed by an insured in favor of said borrower; and

(c) an asset of said borrower pledged to said loan originator as collateral for said loan,

wherein said loan has terms responsive to the presence of said one or more gap enhancement instruments, said terms being more favorable to said borrower.

66. The business structure of claim 65, wherein said collateral assignment of said product is executed in favor of said loan originator.

67. The business structure of claim 65, wherein said one or more gap enhancement instruments comprises:

a compensation agreement between said employee and said borrower, wherein said borrower is an employer of said employee.

68. The business structure of claim 65, wherein said one or more gap enhancement instruments comprises:

a UCC-1 statement filed to memorialize the pledging of said asset.

69. The business structure of claim 65, wherein said one or more gap enhancement instruments comprises:

an agreement to postpone payment of a portion of a commission earned on the sale of said product.

70. The business structure of claim 65, wherein said one or more gap enhancement instruments comprises:

a rider on said product waiving a portion of a surrender fee, in favor of said loan originator, said surrender fee representing an amount charged in the event said product is surrendered or said employer defaults on said loan.

71. The business structure of claim 65, wherein said one or more gap enhancement instruments comprises:

an agreement to deposit funds in a reserve account, said funds representing a portion of a surrender fee, said surrender fee representing an amount charged in the event said product is surrendered or said employer defaults on said loan.

72. The business structure of claim 65, wherein said one or more gap enhancement instruments comprises:

an agreement by an insurer, in the event of a surrender or default event, to extend a loan to said loan originator in an amount approximately equal to said current gap value, wherein said loan originator'"'"'s repayment obligation to said insurer is ultimately secured by said pledged asset.

73. The business structure of claim 65, wherein said one or more gap enhancement instruments comprises:

an agreement by an insurer to pay a marketing allowance to said loan originator, said marketing allowance including a portion of the costs associated with marketing said product.

74. The business structure of claim 65, further comprising:

a portfolio of one or more of said loans, wherein said portfolio has an aggregate risk based on said current gap value of each product in said portfolio, said aggregate risk reduced at least in part by said one or more gap enhancement instruments; and

a credit facility for funding said portfolio of loans, said credit facility having credit terms responsive to the presence of said one or more gap enhancement instruments,

and wherein said credit facility comprises a loan purchaser to issue one or more variable funding notes, said notes made suitable for purchase by a VFN purchaser at least in part due to said aggregate risk.

75. The business structure of claim 74, wherein said credit terms are more favorable than would be available for an individual loan selected from said portfolio of loans.

76. The business structure of claim 74, wherein said credit facility comprises a bankruptcy-remote special purpose entity to receive said a portion of said portfolio of loans in a true sale transaction, said transaction made possible at least in part by said aggregate risk.

77. The business structure of claim 74, wherein said credit facility comprises an investment bank to issue asset-backed security interests in said portfolio of loans, suitable for trading in the capital markets to multiple investors.

78. The business structure of claim 74, wherein said asset-backed security interests comprise commercial paper.

79. The business structure of claim 74, wherein said asset-backed security interests comprise a ratable pool of asset-backed securities.