Method for implementing a restructuring exchange of an excessive undivided debt

• US 5,870,720 A
• Filed: 06/15/1994
• Issued: 02/09/1999
• Est. Priority Date: 06/15/1994
• Status: Expired due to Fees

• Current Assignee: Chusid/Whitehead Capital Limited
• Original Assignee: Chusid/Whitehead Capital Limited
• Inventors: Chusid, Candee B., Whitehead, Julia M.
• Primary Examiner(s): Cosimano, Edward R.
• Assistant Examiner(s): Bainbridge, Barton L.
• Application Number:
  US08/260,211
• Time in Patent Office: 1,700 Days
• Field of Search: 364/408, 364/401, 705/35, 705/38, 705/30
• 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
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

A method for restructuring an excessive underlying mortgage in excess of its current market value so that the value of the restructured underlying mortgage and the property to which it attaches exceeds the values prior to the restructuring. The method determines an existing underlying mortgage utilizing parameters which include a principal amount, a maturity date, an interest rate and payment periods. Thereafter, a first market value mortgage portion, which is substantially equal to the current mortgage value of the existing mortgage, and a second excess portion, which is the difference between the remaining principal balance of the existing underlying mortgage and the first market value portion, is determined. As such, the existing underlying mortgage is transferred into or replaced by the first market value portion and the second excess portion so that the principal of the remaining underlying mortgage is, in a most preferred form of the invention, substantially the same as the total of the principals of the first market value portion and the second excess portion. Thereafter, each shareholder'"'"'s amount and percentage of liability in respect of the assessment in accordance with the number of shares owned by each shareholder is calculated.

Claims

1. A method for implementing by a computer, a restructuring exchange of an excessive debt defined by an underlying mortgage on a property having a property value so that the total amount of the restructured debt remains substantially the same as a remaining unpaid principal balance of the underlying mortgage prior to the restructuring exchange, said property being owned by a plurality of shareholders each owning at least one share defining for each said shareholder a pro rata portion of the property and each holding a proprietary lease on a predetermined portion of the property and each said shareholder paying a periodic assessment representing the shareholder'"'"'s pro rata share of a periodic payment due on the underlying mortgage, said method comprising:

determining a remaining unpaid principal balance of the underlying mortgage;

determining a current desired mortgage amount which is less than the value of the property;

defining a desired mortgage secured by the property and having a principal equal to the current desired mortgage amount;

calculating an excess portion of the underlying mortgage by subtracting the current desired mortgage amount from the remaining unpaid principal balance of the underlying mortgage;

defining an excess portion mortgage secured by an assessment on shareholders in the amount of the excess portion mortgage which in turn is secured by a first lien on the shares and proprietary lease of each said shareholder and having a principal equal to the excess portion of the underlying mortgage;

transforming the underlying mortgage into a restructured debt by exchanging the underlying mortgage for a combination of the desired mortgage amount and the excess portion mortgage, whereby a sum of the principals of the desired mortgage and excess portion mortgage is substantially the same as the unpaid principal balance of the existing underlying mortgage;

calculating by said computer for each shareholder;

(a) a periodic payment representing each shareholder'"'"'s pro rata portion of a periodic payment due on the desired mortgage; and

(b) a periodic payment representing each shareholder'"'"'s pro rata portion of a periodic payment due on the excess portion mortgage.

2. The method for implementing a restructuring exchange of an excessive undivided debt as set forth in claim 1 comprising the additional step of printing on a printing means for each shareholder a report listing the periodic payments in said calculating step.

3. The method for implementing a restructuring exchange of an excessive undivided debt as set forth in claim 1 wherein after said periodic payment representing each said shareholder'"'"'s pro rata proportion of a periodic payment due on the excess portion mortgage is calculated, calculating by said computer a sequence of amounts, each said amount representing a total payment, for a predetermined point in time, required to fully satisfy at said time each said shareholder'"'"'s remaining periodic payment obligations under the excess portion mortgage, said each shareholder being obligated to fully satisfy each shareholder'"'"'s remaining periodic payment obligations under the excess portion mortgage upon a sale of the at least one share of each shareholder into a data processing system.

4. The method for implementing a restructuring exchange of an excessive undivided debt as set forth in claim 1 comprising the additional step of printing on a printing means for each shareholder a report listing said sequence of amounts.

5. The method for implementing a restructuring exchange of an excessive undivided debt as set forth in claim 1 wherein in said calculating an excess portion of the underlying mortgage step, said excess portion of the underlying mortgage is calculated on a means for entering said excess portion mortgage.

6. The method for implementing a restructuring exchange of an excessive undivided debt as set forth in claim 1 wherein, the system prints a report on said output means which details the excess portion of the underlying mortgage, the principal balance and payments of the excess portion of the underlying mortgage and the interest paid by the shareholder.

7. The method for implementing a restructuring exchange of an excessive undivided debt as set forth in claim 1 wherein said calculating for each shareholder step is calculated on a data input means having a data entry means and a processing unit for calculating said periodic payments and said sequence of amounts.

8. A method for implementing a restructuring exchange of an excessive undivided debt defined by an underlying mortgage on a property having a property value so that the total amount of the restructured debt remains substantially the same as a principal balance of the underlying mortgage prior to the restructuring exchange, said property being owned by a plurality of shareholders each owning at least one share defining for each said shareholder a pro rata portion of the property and each holding a proprietary lease on a predetermined portion of the property and each said shareholder paying a periodic assessment representing the shareholder'"'"'s pro rata share of a periodic payment due on the underlying mortgage, said method comprising:

determining a remaining proposed principal balance of the underlying mortgage;

determining a current desired mortgage amount which is less than the value of the property;

defining a desired mortgage secured by the property and having a principal equal to the current desired mortgage amount;

calculating an excess portion of the underlying mortgage by subtracting the current desired mortgage amount from the remaining proposed principal balance of the underlying mortgage;

defining an excess portion mortgage secured by an assessment on shareholders in the amount of the excess portion mortgage which is secured by a first lien on the shares and proprietary lease of each said shareholder and having a principal equal to the excess portion of the underlying mortgage;

transforming the underlying mortgage into a restructured debt by exchanging the underlying mortgage for a combination of the desired mortgage and the excess portion mortgage, whereby a sum of the principals of the desired mortgage and excess portion mortgage is substantially the same as the unpaid principal balance of the proposed underlying mortgage;

calculating by a computer for each shareholder;

(a) a periodic payment representing each shareholder'"'"'s pro rata portion of a periodic payment due on the desired mortgage; and

(b) a periodic payment representing each shareholder'"'"'s pro rata proportion of a periodic payment due on the excess portion mortgage.

9. The method for implementing a restructuring exchange of an excessive undivided debt as set forth in claim 8 comprising the additional step of printing on a printing means for each shareholder a report listing the periodic payments in said calculating step.

10. The method for implementing a restructuring exchange of an excessive undivided debt as set forth in claim 8 wherein after said periodic payment representing each said shareholder'"'"'s pro rata proportion of a periodic payment due on the excess portion mortgage is calculated, calculating by said computer a sequence of amounts, each said amount representing a total payment, for a predetermined point in time, required to fully satisfy at said time each said shareholder'"'"'s remaining periodic payment obligations under the excess portion mortgage, said each shareholder being obligated to fully satisfy each shareholder'"'"'s remaining periodic payment obligations under the excess portion mortgage upon a sale of the at least one share of each shareholder into a data processing system.

11. The method for implementing a restructuring exchange of an excessive undivided debt as set forth in claim 8 comprising the additional step of printing on a printing means for each shareholder a report listing said sequence of amounts.