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

• US 7,945,510 B1
• Filed: 03/13/2003
• Issued: 05/17/2011
• Est. Priority Date: 07/31/2002
• Status: Active Grant

• Current Assignee: Freddie Mac, Grandeye Limited (Oncam Global Group AG)
• 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:
  US10/387,325
• Time in Patent Office: 2,987 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. A level of risk associated with the borrower may be determined based on credit information of the borrower; a first credit line may be established based on the determined level of risk associated with the borrower, the first credit line being set as a debt of the mortgage; a second credit line may be established 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 the mortgage may be offered 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 creating a mortgage to assist a borrower and to create greater risk certainty for an investor, said method comprising:

obtaining, from an electronic database, data representing credit information of the borrower;

calculating, using a computer data processor, a level of risk associated with the borrower based on the data representing credit information;

establishing, using the computer data processor, a single sliding equity mortgage based on the determined level of risk associated with the borrower, the single sliding equity mortgage being established with a maximum amount of debt at a time of issuing the single sliding equity mortgage and being 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;

calculating, using the computer data processor, a second amount of debt for the single sliding equity mortgage based on the determined level of risk associated with the borrower, where a sum of the second amount of debt and the initial amount of debt does not exceed the maximum amount of debt; and

modifying, using the computer data processor, the single sliding equity mortgage balance to indicate that a total amount of debt due on the single sliding equity mortgage includes the sum of the second amount of debt and the initial amount of debt, after issuing the single sliding equity mortgage and without initiating a new mortgage to secure the second amount, 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 calculating the level of risk further comprises:

calculating the level of risk based on at least one of the following;

asset information and value of a property.

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

calculating the level of risk based on income information.

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

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

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

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

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

calculating the level of nonpayment risk.

7. The method of claim 1, wherein establishing the initial amount further comprises:

establishing a first interest rate for the initial amount.

8. The method of claim 1, wherein establishing the initial amount further comprises:

establishing the initial amount as less than or equal to about 80% of a value of a property securing the single sliding equity mortgage.

9. The method of claim 1, wherein calculating the second amount further comprises:

establishing a second interest rate for draws against the second amount.

10. The method of claim 1, wherein calculating the second amount further comprises:

establishing one or more conditions for the second amount, the one or more conditions granting or denying access to the second amount.

11. The method of claim 10, wherein establishing one or more conditions further comprises:

defining said one or more conditions to include at least one of the following;

a satisfactory credit history, a maximum loan-to-value ratio, an interest rate, a time for accessing the second amount, a frequency of accessing the second amount, and a reappraisal of the mortgaged property.

12. The method of claim 11, further comprising defining the satisfactory credit history as including no late payments.

13. The method of claim 1, further comprising recording the single sliding equity mortgage as the sum of the initial amount and the second amount.

14. The method of claim 1, further comprising:

establishing the second amount as available credit from the single sliding equity mortgage.

15. The method of claim 1, wherein calculating the second amount further comprises:

establishing the maximum as an amount greater than a value representative of a property subject to the single sliding equity mortgage.

16. The method of claim 15 further comprising:

determining the value as an estimate representative of the value after the mortgage closes.

17. The method of claim 1 further comprising:

defining the initial amount as a primary credit line and the second amount as an amount of available equity secured by the single sliding equity mortgage.

18. The method of claim 1, wherein said method further comprises:

selling the single sliding equity mortgage to the investor.

19. The method of claim 1, wherein said method further comprises issuing a security backed in part by the single sliding equity mortgage.

20. A system for creating a mortgage to assist a borrower and to create greater risk certainty for an investor, said system comprising:

a processor; and

a memory, wherein the processor and the memory;

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

establish a single sliding equity mortgage based on the determined level of risk associated with the borrower, the single sliding equity mortgage being established with a maximum amount of debt at a time of issuing the single sliding equity mortgage and being 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;

establish a second amount of debt for the single sliding equity mortgage based on the determined level of risk associated with the borrower, where a sum of the second amount and the initial amount is set as the maximum amount of debt; and

modify the single sliding equity mortgage balance to indicate that a total amount of debt due on the single sliding equity mortgage includes the sum of the second amount of debt and the initial amount of debt, after issuing the single sliding equity mortgage and without initiating a new mortgage to secure the second amount, 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.

21. A computer program product for creating a mortgage to assist a borrower and to create greater risk certainty for an investor, the computer program product comprising:

a tangible computer readable medium including;

code that determines a level of risk associated with the borrower based on credit information of the borrower;

code that establishes a single sliding equity mortgage based on the determined level of risk associated with the borrower, the single sliding equity mortgage being established with a maximum amount of debt at a time of issuing the single sliding equity mortgage and being the only mortgage issued for a property;

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

code that establishes a second amount of debt for the single sliding equity mortgage based on the determined level of risk associated with the borrower, where a sum of the second amount and the initial amount of debt does not exceed the maximum amount of debt; and

code that modifies the single sliding equity mortgage balance to indicate that a total amount of debt due on the single sliding equity mortgage includes the sum of the second amount of debt and the initial amount of debt, after issuing the single sliding equity mortgage and without initiating a new mortgage to secure the second amount, 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.