Systems and methods for providing a mortgage with a sliding credit line

• US 7,941,365 B1
• Filed: 12/31/2007
• Issued: 05/10/2011
• Est. Priority Date: 07/31/2002
• Status: Active Grant

• Current Assignee: Federal Home Loan Mortgage Corporation
• Original Assignee: Federal Home Loan Mortgage Corporation
• Inventors: Gordon, J. Douglas, Muren, Walter C., Bradley, Michael G.
• Primary Examiner(s): Dass; Harish T.
• Application Number:
  US11/967,615
• Time in Patent Office: 1,226 Days
• Field of Search: 705 35- 38, 705/27
• 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 40/02 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

Abstract

Systems and methods consistent with the present invention provide a mortgage with a primary credit line and a sliding credit line, such that the borrower may request to borrow from the sliding credit line as part of the original mortgage. In one embodiment, the method includes determining a level of risk associated with the borrower based on credit information of the borrower; establishing a first credit line based on the determined level of risk associated with the borrower, the first credit line being set as a debt of the mortgage; establishing a second credit line based on the determined level of risk associated with the borrower, the second credit line being set as a maximum to which the debt of the mortgage may be increased during the mortgage; and offering the mortgage to the borrower with the established first and second credit lines, such that a single first lien may serve as security for the first and second credit lines. Moreover, a mortgage lender may record the single first lien as the sum of the primary and sliding credit lines.

Claims

1. A computer-implemented method of increasing a debt amount associated with a mortgage, said method comprising:

issuing, using a data processor, a single sliding equity mortgage that secures a maximum amount of debt and constitutes the only mortgage issued for a property;

distributing, upon closing the single sliding equity mortgage, an initial amount of debt that is less than the maximum amount of debt;

receiving, using the data processor, data representing a request to increase the initial amount of debt for the single sliding equity mortgage after the issuing of the single sliding equity mortgage;

determining, using the data processor, a level of risk associated with a borrower of the single sliding equity mortgage based on credit information of the borrower;

calculating, based on the initial amount and the level of risk, a second amount of debt to secure with the single sliding equity mortgage, where a sum of the second amount of debt and the initial amount of debt does not exceed the maximum amount of debt; and

increasing, using the data processor, a total amount of debt due on the single sliding equity mortgage to the sum of the second amount of debt and the initial amount of debt, without issuing a new mortgage, wherein

the maximum amount of debt associated with the single sliding equity mortgage is dynamic and changes dynamically after the closing based on appreciation or depreciation of an underlying asset associated with the single sliding equity mortgage.

2. The method of claim 1, wherein the borrower initiates the request to increase the initial amount of debt.

3. The method of claim 1, wherein determining the level of risk further comprises:

determining the level of risk based on asset information of the borrower.

4. The method of claim 1, wherein determining the level of risk further comprises:

determining the level of risk based on income information of the borrower.

5. The method of claim 1, wherein determining the level of risk further comprises:

determining the level of risk based on liability information of the borrower.

6. The method of claim 1, wherein determining the level of risk further comprises:

determining the level of risk based on an appraisal value of a property.

7. The method of claim 1, wherein determining the level of risk further comprises:

determining the level of nonpayment risk.

8. The method of claim 1, wherein increasing the debt of the single sliding equity mortgage to the sum further comprises:

revising a mortgage payment associated with the single sliding equity mortgage based on the sum.

9. The method of claim 1, further comprising:

determining whether the borrower satisfies one or more conditions for obtaining the second amount.

10. The method of claim 9, wherein the one or more conditions include at least one of the following:

a satisfactory credit history, a maximum loan-to-value ratio, an interest rate, a time when the second amount may be accessed, a frequency of how often the second amount may be accessed, and a reappraisal of the mortgaged property.

11. The method of claim 1, further comprising:

decreasing the available second amount of debt after increasing the debt of the single sliding equity mortgage based on a first request.

12. The method of claim 1, further comprising:

revising a mortgage payment associated with the single sliding equity mortgage based on the request.

13. The method of claim 1, further comprising:

providing an amount to the borrower corresponding to the second amount after closing of the single sliding equity mortgage.

14. The method of claim 13, wherein closing occurs when the borrower receives the initial amount.

15. The method of claim 1, further comprising:

increasing the second amount based on an appraisal value of a property.

16. The method of claim 1, further comprising:

decreasing the second amount based on an appraisal value of a property.

17. The method of claim 1, further comprising:

selling the single sliding equity mortgage to an investor.

18. The method of claim 1, further comprising:

issuing a security backed in part by the single sliding equity mortgage.

19. A system of increasing a debt amount associated with a mortgage, said system comprising:

a processor; and

a memory, wherein the processor and the memory;

issue a single sliding equity mortgage that secures a maximum amount of debt and constitutes the only mortgage issued for a property;

distribute, upon closing the single sliding equity mortgage, an initial amount of debt that is less than the maximum amount of debt;

receive a request to increase the initial amount of debt for the single sliding equity mortgage after the issuing of the single sliding equity mortgage;

determine a level of risk associated with a borrower of the single sliding equity mortgage based on credit information of the borrower;

calculate a second amount of debt to secure with the single sliding equity mortgage based on the level of risk, where a sum of the second amount of debt and the initial amount of debt does not exceed the maximum amount of debt; and

increase the debt of the single sliding equity mortgage to the sum of the second amount of debt and the initial amount of debt based on the determined level of risk, without issuing a new mortgage, wherein

the maximum amount of debt associated with the single sliding equity mortgage is dynamic and changes dynamically after the closing based on appreciation or depreciation of an underlying asset associated with the single sliding equity mortgage.

20. A computer program product comprising:

a tangible computer-readable storage medium including instructions which, when executed by a processor, perform a method of increasing a debt amount associated with a mortgage, the method comprising;

issuing a single sliding equity mortgage that secures a maximum amount of debt and constitutes the only mortgage issued for a property;

distributing, upon closing the single sliding equity mortgage, an initial amount of debt that is less than the maximum amount of debt;

receiving a request to increase the initial amount of debt after the issuing of the single sliding equity mortgage;

determining a level of risk associated with a borrower of the mortgage based on credit information of the borrower;

calculating a second amount of debt to secure with the single sliding equity mortgage based on the level of risk, where a sum of the second amount of debt and the initial amount of debt does not exceed the maximum amount of debt; and

increasing the debt amount of the single sliding equity mortgage to the sum of the second amount of debt and the initial amount of debt based on the determined level of risk, without issuing a new mortgage, wherein

the maximum amount of debt associated with the single sliding equity mortgage is dynamic and changes dynamically after the closing based on appreciation or depreciation of an underlying asset associated with the single sliding equity mortgage.