System and Method for Sharing and Allocating Financial Risk Associated with a Loan

• US 20080301038A1
• Filed: 06/04/2008
• Published: 12/04/2008
• Est. Priority Date: 06/04/2007
• Status: Abandoned Application

• Current Assignee: RISK Allocation Systems
• Original Assignee: RISK Allocation Systems
• Inventors: Van Wesep, Edward D., Anderson, Wiliam J.
• Application Number:
  US12/133,239
• Publication Number:
  US 20080301038A1
• Time in Patent Office: Days
• US Class Current: 705/38
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof

Abstract

An application for a loan comprising information about a buyer is received. An amount of funds to be contributed to the holdback pool by the seller based on the information about the buyer is determined. Approval of the amount of funds is received from the seller. The application for the loan is approved responsive to the approval from the seller.

Claims

1. A computer-implemented method for processing a loan, the method comprising:

receiving an application for a loan comprising information about a buyer;

determining an amount of funds to be contributed to the holdback pool by the seller based on the information about the buyer;

receiving approval of the amount of funds from the seller; and

approving the application for the loan responsive to the approval from the seller.

2. The method of claim 1, further comprising:

determining whether the application for the loan can be approved by a loan provider without funds contributed to a holdback pool by the seller based on the information about the buyer.

3. The method of claim 2, further comprising:

determining whether the application for the loan can be approved based on lending criteria specified by the loan provider.

4. The method of claim 3, further comprising:

determining a predicted internal rate of return for the loan provider based on the lending criteria specified by the loan provider.

5. The method of claim 4, wherein determining the predicted internal rate of return for the loan provider based on the criteria specified by the loan provider comprises:

identifying historical loan information satisfying the lending criteria specified by the loan provider;

determining a lender loss value based on the historical loan information, wherein the lender loss value corresponds in part to a rate at which one or more holdback pools have had insufficient funds to repay financial loss associated with loan non-payment; and

determining the predicted rate of return for the lender based at least in part on the lender loss value.

6. The method of claim 1, wherein determining the amount of funds comprises:

determining a holdback value, the holdback value representing a financial risk associated with the loan.

7. The method of claim 6, further comprising:

determining a buyer risk value based on the information about the buyer, the buyer risk value indicating a risk of loan non-payment specific to the buyer; and

determining the holdback value based, in part, on the buyer risk value.

8. The method of claim 6, further comprising:

determining a seller risk value based on historical loan information associated with the seller, the seller risk value indicating a risk of loan non-payment specific to the seller; and

determining the holdback value based in part on the seller risk value.

9. The method of claim 6, further comprising:

determining a financial loss value based, at least in part, on the good or service, the financial loss value indicating a recovery value of the good or service; and

determining the holdback value based in part on the financial loss value.

10. The method of claim 1, further comprising:

determining an amount of funds equal to a financial loss associated with the loan responsive to loan non-payment; and

transmitting funds equal to the financial loss associated with the loan from the pool to the loan provider.

11. A computer system for processing a loan, the system comprising:

a reporting module adapted for communication with a loan provider system and the seller system;

the reporting module for receiving an application for a loan comprising information about a buyer from a seller system, determining a holdback value representing a financial risk associated with the loan based on the information about the buyer and determining an amount of funds to be contributed to the holdback pool by the seller system based on the holdback value, the holdback module adapted for communication with the reporting module.

12. The system of claim 11, wherein the holdback module:

determines whether the application for the loan can be approved by a loan provider without funds contributed to a holdback pool by the seller based on the information about the buyer and lending criteria specified by the loan provider.

13. The system of claim 12, wherein the holdback module determines a predicted internal rate of return for the loan provider based on the lending criteria specified by the loan provider.

14. The system of claim 13 further comprising:

a holdback pool database adapted to communicate with the holdback module and store historic loan information; and

wherein the holdback module identifies historical loan information satisfying the lending criteria specified by the loan provider, determines lender loss values based on the historical loan information, wherein the lender loss values correspond in part to a rate at which one or more holdback pools have had insufficient funds to repay financial loss associated with loan non-payment and determine the predicted rate of return for the lender based at least in part on the lender loss values.

15. The system of claim 11, further comprising:

a risk analysis module adapted to communicate with the holdback module and determine a buyer risk value based on the information about a prospective buyer of the good or service, the buyer risk value indicating a risk of loan non-payment specific to the buyer; and

wherein the holdback module determines the holdback value based in part on the buyer risk value.

16. The system of claim 15, wherein the risk analysis module is further adapted to determine a buyer risk value based on a credit history of a prospective buyer of the good or service.

17. The system of claim 11, further comprising:

a holdback pool database for storing historic loan information, wherein the holdback pool database is adapted to communicate with the holdback module;

a pool evaluation module adapted to communicate with the holdback pool database, wherein the pool evaluation module identifies historical loan information associated with the dealer from the holdback pool database, and determines a dealer risk value based on historical loan information associated with the dealer, the dealer risk value indicating a risk of loan non-payment specific to the dealer;

and wherein the holdback module determines the holdback value based in part on the dealer risk value.

18. The system of claim 17, wherein the pool evaluation module

determines a plurality of dealer risk values based on a historic loan information indicating a plurality of pools associated with the dealer;

adjusts the plurality of dealer risk values based on dates associated with the pools; and

combines the adjusted plurality of dealer risk values to determine the dealer risk value.

19. The system of claim 11, further comprising:

a loss evaluation module for determining an expected financial loss value based on a recovery value of the good or service, wherein the loss evaluation module is adapted to communicate with the holdback module; and

wherein the holdback module;

determines the holdback value based in part on the financial loss value.

20. The system of claim 19, wherein the loss evaluation module determines the financial loss value based on the information about the prospective buyer.