Computerized systems and methods for facilitating the flow of capital through the housing finance industry

• US 6,988,082 B1
• Filed: 12/30/2002
• Issued: 01/17/2006
• Est. Priority Date: 06/13/2000
• Status: Expired due to Term

• Current Assignee: Fannie Mae
• Original Assignee: Fannie Mae
• Inventors: Koch, Michael W., Voth, David N., Kopperman, Peter G., Williams, Michael J., Simon, Peter A., Plotnick, Richard N., Schulz, Martin T., Hirsch, Kimberly J.
• Primary Examiner(s): Kazimi, Hani
• Assistant Examiner(s): Subramanian, Narayanswamy
• Application Number:
  US10/331,680
• Time in Patent Office: 1,114 Days
• Field of Search: 705 35- 40
• US Class Current: 705/36.00T
• 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 40/10 Tax strategies
• CPC Class Codes: G06Q 40/12 Accounting

Abstract

Computerized systems and methods facilitate the flow of capital through the housing finance industry. A system for determining an interest rate quote and points for a mortgage loan that are specific to a borrower includes input means for obtaining borrower and mortgage loan information, means for retrieving underwriting characteristics and means for calculating the interest rate quote and points based on the borrower and mortgage loan information and based on the underwriting characteristics. The means for calculating includes means for retrieving a required yield which reflects market conditions in a secondary mortgage market including being indicative of a price that can be obtained for the mortgage loan in the secondary mortgage market. The calculating means also includes means for determining an adjustment to the required yield associated with the mortgage loan based on credit risk posed by the borrower, the credit risk adjustment being determined as a function of at least a credit score, a loan-to-value ratio, and a mortgage loan purpose for the mortgage loan and the borrower. The calculating means further includes means for determining other adjustments to the required yield based on other parameters related to the mortgage loan and/or the borrower. The interest rate quote and points are calculated as a function of the required yield adjusted by the credit risk adjustment and the other adjustments.

Claims

1. A system for determining an interest rate quote and points for a mortgage loan that are specific to a borrower, comprising:

input means for obtaining borrower and mortgage loan information;

means for retrieving underwriting characteristics;

means for calculating the interest rate quote and points based on the borrower and mortgage loan information and based on the underwriting characteristics, the means for calculating including

means for retrieving a required yield which reflects market conditions in a secondary mortgage market including being indicative of a price that is offered for the mortgage loan in the secondary mortgage market;

means for determining an adjustment to the required yield associated with the mortgage loan based on credit risk posed by the borrower, the credit risk adjustment being determined as a function of at least a credit score, a loan-to-value ratio, and a mortgage loan purpose for the mortgage loan and the borrower; and

means for determining other adjustments to the required yield based on other parameters related to the mortgage loan and/or the borrower; and

wherein the interest rate quote and points is calculated as a function of the required yield adjusted by the credit risk adjustment and the other adjustments.

2. A system according to claim 1, wherein the mortgage loan is a mortgage refinance.

3. A system according to claim 1, wherein the mortgage loan is one of a plurality of mortgage loan products, and wherein the means for calculating calculates adjustments to required yields associated with each of the plurality of mortgage loan products to determine interest rate quotes for each of the plurality of mortgage loan products.

4. A system according to claim 3, further comprising means for receiving a borrower selection of the one of the plurality of mortgage loan products.

5. A system according to claim 1, further comprising means for generating interest rates for display to potential borrowers.

6. A system according to claim 5, wherein the means for generating is configured to generate different interest rates for different lenders.

7. A system according to claim 6, wherein the means for generating is configured to generate different interest rates for different lenders and for different products offered by the different lenders.

8. A system according to claim 1, wherein the interest rate is further adjusted based on a maximum schedule interest rate, a maximum schedule premium points, a minimum schedule interest rate, a maximum schedule discount points, and a maximum market interest rate for float.

9. A system according to claim 1, further comprising means for modifying a yield/point trade-off schedule for the loan product by (i) limiting an upper interest rate boundary by a maximum schedule interest rate and a maximum schedule premium points, and (ii) limiting a lower interest rate boundary by a minimum schedule interest rate and a maximum schedule discount points.

10. A system according to claim 1, wherein the means for calculating further calculates adjustments based on product characteristics of the mortgage loan.

11. A system according to claim 1, wherein the means for calculating further calculates an adjustment to the required yield for loans with a loan-to-value ratio in excess of a predetermined value, the adjustment being configured to compensate an investor in the mortgage loan for potential borrower default associated with a lower down payment.

12. A system according to claim 1, wherein the other parameters related to the mortgage loan and/or borrower include collateral risk associated with not requiring a collateral appraisal.

13. A system according to claim 1, wherein the underwriting characteristics are related to underwriting guidelines of a secondary mortgage market purchaser.

14. A system according to claim 1, wherein the interest rate quote is used to determine a price that may be obtained for the mortgage loan in the secondary mortgage market.

15. A system according to claim 13, wherein the underwriting characteristics and the interest rate quote and points are used to determine an underwriting recommendation.

16. A system according to claim 13, further comprising means for generating an underwriting recommendation for the mortgage loan application based on the underwriting characteristics and based on underwriting guidelines of a secondary mortgage market purchaser.

17. A system according to claim 1, wherein the system is further configured to provide a display of information pertaining to the interest rate quote and points specific to a borrower to the borrower by way of the Internet.

18. A system according to claim 1, wherein the other adjustments include a servicing fee adjustment.

19. A system according to claim 1, wherein the means for retrieving underwriting characteristics retrieves at least the following underwriting characteristics:

(i) casefile ID, (ii) requested product, (iii) prospect or loan originator ID, (iv) combined loan-to-value, (v) loan to value, (vi) property type, (vii) loan purpose, (vii) cashout percentage, (ix) self-employment indicator, (x) months of cash reserves, and (xi) total expense ratio.

20. A system according to claim 1, wherein the credit risk adjustment further includes a risk-based guarantee fee.

21. A system according to claim 19, wherein the means for determining an adjustment looks up the risk-based guarantee fee in a risk-based guarantee fee schedule.

22. A system according to claim 20, wherein the underwriting characteristics are used as input to the risk-based guarantee fee schedule.

23. A system according to claim 1, wherein the means for calculating is further configured to calculate generic interest rates that are non-borrower specific and that are displayed as enticement rates.

24. A system according to claim 1, wherein the means for calculating the interest rate quote and points is accessible by the borrower via the Internet.

25. A system according to claim 1, wherein the required portfolio yield is used to generate a spot price for the mortgage loan.