Computer system and computer-implemented process for implementing a mortgage partnership

• US 5,983,206 A
• Filed: 06/30/1997
• Issued: 11/09/1999
• Est. Priority Date: 05/25/1989
• Status: Expired due to Fees

• Current Assignee: Robert H. Oppenheimer
• Original Assignee: Robert H. Oppenheimer
• Inventors: Oppenheimer, Robert H.
• Primary Examiner(s): Voeltz, Emanuel Todd
• Assistant Examiner(s): Pluta, Laura H
• Application Number:
  US08/885,790
• Time in Patent Office: 862 Days
• Field of Search: 705/38, 705/4, 705/40, 705/42
• US Class Current: 705/38
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 20/108 Remote banking, e.g. home banking
• 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 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A computer system and computer-implemented process creates single mortgage documents with multi-part obligations. The obligations allow for financing of real property ownership through a combination of mortgage debt and equity participation in underlying real property values. The computer system includes components for issuance, origination, servicing, and settlement of the mortgage. The issuance process allows for the input of parameters or financial terms for the creation of new mortgage instruments. Origination provides for the quotation of monthly payment rates and initial financing obligations to perspective mortgagors and printing of mortgage agreements under those terms. Servicing includes the processing of mortgage payments and periodic statements to mortgagors from the inception of the mortgage through termination, at which time the system determines a final settlement of the mortgagor and mortgagee obligations.

Claims

1. A computer-implemented method of producing a digital representation of mortgage issuer parameters for a prospective mortgage on a real property, the prospective mortgage including a first part and a second part, wherein the first part defines a first debt obligation mortgage obligations between a mortgagor and a first mortgagee and a second part defining mortgage obligations between the mortgagor and a second mortgagee, the computer-implemented method comprising:

receiving, through an input device of a computer, mortgage issuer parameters that include durations and return rates of prospective mortgage obligations of the first part of the mortgage and durations and return rates of prospective mortgage obligations of the second part of the mortgage;

storing on a computer-readable memory the mortgage issuer parameters;

generating, using the computer, more mortgage issuer parameters derived from received mortgage issuer parameters, both the received and derived mortgager issuer parameters to be applied to mortgagor application data to determine prospective mortgage terms including payment obligations of the mortgagor to the first and second mortgagees for a duration of the mortgage; and

producing, using the computer, a digital representation of the mortgage issuer parameters.

2. The computer-implemented method of claim 1, wherein the second part of the mortgage includes a debt component and a shared equity component, the shared equity component representing an equity interest in the real property of the second mortgagee.

3. The computer-implemented method of claim 2, wherein the received mortgage issuer parameters further define a percentage in a value of the real property of the equity interest of the second mortgagee.

4. A computer-implemented method of producing a digital representation of a mortgage on a real property as defined by terms of the mortgage, the mortgage including a first part defining obligations between a mortgagor and a first mortgagee and a second part defining obligations between the mortgagor and a second mortgagee, the computer-implemented method comprising:

accessing, from a computer-readable memory, mortgage issuer parameters including investment return rates, a duration of a first debt obligation of the mortgagor to the first mortgagee, and a duration of a second debt obligation of the mortgagor to the first mortgagee;

receiving, through an input device of a computer, mortgage application data including a value of the real estate at an inception of the mortgage and a percent of the value of the real estate to be paid by the mortgagor in a down payment;

storing the mortgage application data on a computer-readable medium;

generating, using a computer, terms of the mortgage by applying the mortgage issuer parameters to the mortgage application data, wherein the terms define the first debt obligation and the second debt obligation; and

producing a digital representation of the mortgage terms.

5. The computer-implemented method of claim 4, further comprising:

storing the mortgage defined by the mortgage terms on a memory storage device.

6. The computer-implemented method of claim 4, wherein the second part of the mortgage includes the second debt obligation and a shared equity obligation defined by terms of the mortgage, the shared equity obligation representing an interest in the equity of the real property belonging to the second mortgagee.

7. The computer-implemented method of claim 6, wherein the mortgage issuer parameters further define a percentage of the equity of the real property belonging to the equity interest of the second mortgagee.

8. The computer-implemented method of claim 4, further comprising:

receiving, through an input device of a computer, hypothetical termination variables that represent hypothetical values associated with the mortgage at a termination of the mortgage, the termination variables including a duration of the mortgage and net proceeds from a disposition of the real property at a termination, wherein the duration of the mortgage is an amount of time from the inception of the mortgage until the termination of the mortgage;

calculating pro-forma termination obligations by applying the termination variables to the terms of the mortgage, the termination obligations including a first payment owed by the mortgagor to the first mortgagee and a second payment owed by the mortgagor to the second mortgagee at the time of termination.

9. The computer-implemented method of claim 8, wherein:

the second part of the mortgage includes the second debt obligation and a shared equity obligation defined by the terms of the mortgage, the shared equity obligation representing an interest in the equity of the real property belonging to the second mortgagee;

the mortgage issuer parameters further define a percentage of the equity of the real property belonging to the equity interest of the second mortgagee; and

the step of calculating pro-forma termination obligations includes determining a value of the equity interest of the second mortgagee at termination.

10. The computer-implemented method of claim 9, wherein the mortgage application data includes a house price index at the inception of the mortgage, and the termination variables include the house price index at the termination of the mortgage,

wherein determining the value of the equity interest of the second mortgagee includes:

producing a ratio by dividing the house price index at the termination by the house price index at the inception;

determining a value of the real estate at termination by multiplying the ratio by the value of the real estate at inception;

determining the equity of the real estate at termination by subtracting the debt obligations of the mortgagor to the first mortgagee and to the second mortgagee from the value of the real estate at termination; and

calculating the value of the equity interest of the second mortgagee by multiplying the equity of the real estate at termination by the percentage of the equity of the real property belonging to the equity interest of the second mortgagee.

11. The computer-implemented method of claim 4, wherein the terms of the mortgage include a cross-default provision that provides that in the event of a termination of the mortgage and a sale of the real property for a price less than a combined amount of unpaid obligations to the first and second mortgagees, the first and second mortgagee will each receive a pro-rata share of proceeds of the sale, each pro-rate share based on the unpaid obligation of the mortgagee to the first and second mortgagee, respectively.

12. A computer-implemented method of servicing a mortgage on real property defined by terms of the mortgage and represented digitally, the mortgage including a first part defining obligations between a mortgagor and a first mortgagee and having a first balance and a second part defining obligations between the mortgagor and a second mortgagee and having a second balance, the computer-implemented method comprising:

receiving, through an input device of a computer, an indication of receipt of a mortgage payment, the indication including an amount of the mortgage payment; and

adjusting, using the computer, the first balance or the second balance according to the terms of the mortgage by deducting the amount of the mortgage payment from either the first balance or the second balance, respectively.

13. The computer-implemented method of claim 12, further comprising:

producing a mortgage statement on a medium, the mortgage statement reflecting any adjustments to the mortgage balances resulting from the servicing of mortgage.

14. The computer-implemented method of claim 12, further comprising:

storing the serviced mortgage on a memory storage device.

15. The computer-implemented method of claim 12, further comprising:

determining if a late charge should be assessed; and

if a late charge should be assessed, adding the late charge to either the first balance or the second balance, respectively, according to terms of the mortgage.

16. The computer-implemented method of claim 12, wherein the second part of the mortgage includes a debt obligation and a shared equity obligation defined by the terms of the mortgage, the shared equity obligation representing an interest in the equity of the real property belonging to the second mortgagee.

17. The computer-implemented method of claim 16, the method further comprising:

determining a value of the equity interest of the second mortgagee; and

producing a mortgage statement on a medium,

wherein the mortgage statement reflects any adjustments to the mortgage balances resulting from the servicing of mortgage and the value of the equity interest of the second mortgagee.

18. The computer-implemented method of claim 17, wherein the value of the equity interest of the second mortgagee has increased as a result of the mortgage payment.

19. A computer-implemented method of determining payments owed by a mortgagor to a first mortgagee and to a second mortgagee at a termination of a mortgage on real property in accordance with terms of the mortgage, the mortgage represented digitally on a digital storage medium and including a first part defining obligations between the mortgagor and the first mortgagee and a second part defining obligations between the mortgagor and the second mortgagee, the computer-implemented method comprising:

accessing the terms of the mortgage on the digital storage medium, wherein the first part includes a first debt obligation of the mortgagee to the first mortgagor and the second part includes a second debt obligation of the mortgagor to the second mortgagee;

determining a first balance of the first debt obligation;

determining the second balance of the second debt obligation;

receiving, through an input device of the computer, an indication of net proceeds from disposition of the real property at the termination;

determining, from the net proceeds and the first balance, a first payment owed to the first mortgagor;

determining, from the net proceeds, the first payment owed, and the second balance, a second payment owed to the second mortgagor.

20. The computer-implemented method of claim 19, further comprising the step of:

producing a representation of the first and second payments owed on a media.

21. The computer-implemented method of claim 19, wherein the second part of the mortgage further includes a shared equity obligation defined by terms of the mortgage, the shared equity obligation representing an interest in the equity of the real property belonging to the second mortgagee.

22. The computer-implemented method of claim 21, wherein the mortgage terms define a percentage of the equity of the real property belonging to the equity interest of the second mortgagee.

23. The computer-implemented method of claim 22, further comprising:

determining a value of the equity interest of the second mortgagee at termination.

24. The computer-implemented method of claim 23, wherein the terms of the mortgage define a house price index at the inception of the mortgage and a value of the real estate at an inception of the mortgage, the method further comprising:

receiving a house price index at the termination of the mortgage,

wherein the step of determining the value of the equity interest of the second mortgagee includes;

producing a ratio by dividing the house price index at the termination by the house price index at the inception;

determining a value of the real estate at termination as a product of the ratio and the value of the real estate at the inception;

determining the equity of the real estate at termination by subtracting the first balance and the second balance from the value of the real estate at termination; and

calculating the value of the equity interest of the second mortgagee by multiplying the equity of the real estate at termination by the percentage of the equity of the real property belonging to the equity interest of the second mortgagee.

25. The computer-implemented method of claim 24, wherein the mortgage terms define a percentage selling commission allowance, wherein the step of determining a value of the real estate at termination includes:

multiplying the product of the ratio and the value of the real estate at the inception by the selling commission allowance.

26. The computer-implemented method of claim 23, wherein the terms of the mortgage include a capitation value, wherein the step of determining the value of the equity interest of the second mortgagee at termination includes:

limiting a maximum value of the equity interest to the capitation value.

27. The computer-implemented method of claim 26, wherein the terms of the mortgage include a capitation time limit, wherein the step of determining the value of the equity interest of the second mortgagee includes:

determining whether a duration of the mortgage from an inception to the termination has exceeded the capitation time limit; and

if the duration has exceeded the time limit, forgoing the limiting the maximum value of the equity interest to the capitation value.

28. The computer-implemented method of claim 19, wherein the terms of the mortgage define a cross-default provision providing that in the event of a termination of the mortgage and a sale of the real property for a price less than a combined amount of the first balance and second balance, the first payment and the second payment are equal to pro-rata shares of proceeds of the sale based on the first balance and second balance, respectively,

wherein if the received net proceeds are less than the combined amount of the first balance and the second balance, the steps of determining the first payment and the second payment each include applying the cross-default provision.