MARKET-INDEXED MORTGAGE SYSTEM AND METHOD

• US 20090150282A1
• Filed: 02/17/2009
• Published: 06/11/2009
• Est. Priority Date: 03/07/2003
• Status: Active Grant

• Current Assignee: Hippo Exchange, LLC
• Original Assignee: Market Shield Capital, LLC
• Inventors: Weiss, Allan N.
• Granted Patent: US 8,082,202 B2
• Time in Patent Office: Days
• US Class Current: 705/37
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• 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
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A market-indexed mortgage system and method are provided that enable one or more borrowers to finance or refinance a real estate property and have at least a portion of the payments indexed to local relevant real estate values. The mortgage loan provides upfront liquidity to purchase or refinance the property; the borrower has payment stream going back to a lender (or holder of the note) wherein one or more payments are adjusted or determined based on the index. Such market-based mortgage loans can be pooled in a fund and fund shares can be issued against the fund. The mortgage can be a residential mortgage in which the regular (e.g. Monthly) payments (interest and or principal) fluctuate with a price index for the local house market. Balance upon prepayment can also fluctuate with such an index.

Claims

1. A computer-based method of indexing mortgages to a market index, with method steps carried out by one or more processors accessing one or more electronic information sources, the method comprising:

storing a cash value representing a pool of cash associated with a fund that gives loans for the financing or refinancing of a class of real property;

defining at least one index representative of market values of real property in the class; and

for each of a plurality of borrowers;

allocating cash from the pool of cash to a borrower for financing or refinancing an identified real property in the class, and adjusting the cash value of the fund to indicate the transfer;

calculating time-based payments to be made by the borrower to the fund based on the cash allocated to the borrower; and

adjusting one or more of the payments using the index, and storing values representing the adjusted one or more payments,

wherein adjustments in the time-based payments reflect changes in market values associated with the class.

2. The method of claim 1, further comprising issuing shares against the fund.

3. The method of claim 1, wherein the method includes adjusting only a portion of the payments using the index.

4. The method of claim 1, wherein the index comprises a real estate price index.

5. The method of claim 1, wherein the index comprises a real estate rental index.

6. The method of claim 1, wherein prepayment of at least some of the payments is adjusted based on the index.

7. The method of claim 1, wherein one or more of the payments include principal and interest and only the interest is adjusted using the index.

8. The method of claim 1, wherein one or more of the payments include principal and interest and only the principal is adjusted using the index.

9. The method of claim 1, wherein one or more of the payments include principal and interest and both the principal and the interest are adjusted using the index.

10. The method of claim 1, wherein at least some of the payments are interest only payments, and the interest is calculated using the index.

11. The method of claim 1, wherein the adjusting of one or more of the payments using the index is done periodically.

12. A market index mortgage adjustment system, comprising:

a fund processor configured to store a cash value representing a pool of cash associated with a fund that gives loans for the financing or refinancing of a class of real property;

a index processor configured to define at least one index representative of market values of real property in the class; and

an account processor configured to, for each of a plurality of borrowers;

allocate cash from the pool of cash to a borrower for financing or refinancing an identified real property in the class;

calculate time-based payments to be made by the borrower to the fund based on the cash allocated to the borrower; and

adjust one or more of the payments using the index, and storing values representing the adjusted one or more payments,

wherein adjustments in the time-based payments reflect changes in market values associated with the class.

13. The system of claim 12, further comprising:

a trading processor configured to issue shares against the fund.

14. The system of claim 12, wherein the account processor is configured to adjust only a portion of the payments using the index.

15. The system of claim 12, wherein the index comprises a real estate price index.

16. The system of claim 12, wherein the index comprises a real estate rental index.

17. The system of claim 12, wherein the account processor is further configured to adjust prepayment of at least some of the payments based on the index.

18. The system of claim 12, wherein one or more of the payments include principal and interest and the account processor adjusts only the interest using the index.

19. The system of claim 12, wherein one or more of the payments include principal and interest and the account processor adjusts only the principal using the index.

20. The system of claim 12, wherein one or more of the payments include principal and interest and the account processor adjusts both the principal and the interest using the index.

21. The system of claim 12, wherein at least some of the payments are interest only payments, and the account processor is configured to calculate the interest using the index.

22. The system of claim 12, wherein the account processor is configured to periodically adjust the one or more of the payments using the index.