Market-indexed mortgage system and method

• US 8,082,202 B2
• Filed: 02/17/2009
• Issued: 12/20/2011
• Est. Priority Date: 03/07/2003
• Status: Expired due to Fees

• Current Assignee: Hippo Exchange, LLC
• Original Assignee: Market Shield Capital, LLC
• Inventors: Weiss, Allan N.
• Primary Examiner(s): HAMILTON, LALITA M
• Application Number:
  US12/372,441
• Publication Number:
  US 20090150282A1
• Time in Patent Office: 1,036 Days
• Field of Search: 705/35, 705/36.R, 705/37, 705/38
• US Class Current: 705/36.R
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• 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 40/06 Asset management; Financial planning or analysis

Abstract

A market-indexed mortgage system and method are provided that enable one or more borrowers to finance or refinance a real estate property and have at least a portion of the payments indexed to local relevant real estate values. The mortgage loan provides upfront liquidity to purchase or refinance the property; the borrower has payment stream going back to a lender (or holder of the note) wherein one or more payments are adjusted or determined based on the index. Such market-based mortgage loans can be pooled in a fund and fund shares can be issued against the fund. The mortgage can be a residential mortgage in which the regular (e.g. Monthly) payments (interest and or principal) fluctuate with a price index for the local house market. Balance upon prepayment can also fluctuate with such an index.

Claims

1. A computer-based method of indexing mortgages to at least one market index, carried out by one or more processors accessing one or more electronic information sources, the method comprising:

aggregating cash amounts received from a plurality of investors into a pool of cash;

defining at least one index representative of market values of real property in a class of real property;

for each of a plurality of borrowers, wherein the plurality of borrowers includes owners of real property in the class being financed or refinanced with market-indexed mortgage loans;

allocating cash from the pool of cash to a borrower for financing or refinancing an identified real property in the class as a market-indexed mortgage loan;

calculating time-based payments to be made by the borrower as a loan repayment obligation, based on the cash allocated to the borrower; and

electronically adjusting one or more of the payments using the at least one index, and storing values representing the adjusted one or more payments, wherein adjustments in the time-based payments reflect changes in market values associated with the class of real property; and

pooling market-indexed mortgage loans of the plurality of borrowers in a fund that issues one or more class of shares or units to investors, including shares or units whose values fluctuate in response to the at least one index.

2. The method of claim 1, further comprising issuing shares against the fund.

3. The method of claim 1, wherein the method includes adjusting only a portion of the payments using the index.

4. The method of claim 1, wherein the index comprises a real estate price index.

5. The method of claim 1, wherein the index comprises a real estate rental index.

6. The method of claim 1, wherein prepayment of at least some of the payments is adjusted based on the index.

7. The method of claim 1, wherein one or more of the payments include principal and interest and only the interest is adjusted using the index.

8. The method of claim 1, wherein one or more of the payments include principal and interest and only the principal is adjusted using the index.

9. The method of claim 1, wherein one or more of the payments include principal and interest and both the principal and the interest are adjusted using the index.

10. The method of claim 1, wherein at least some of the payments are interest only payments, and the interest is calculated using the index.

11. The method of claim 1, wherein the adjusting of one or more of the payments using the index is done periodically, wherein the period is 1 year or less.

23. The method of claim 1, wherein adjusting one or more of the payments using the index further includes adjusting a principal amount after an initial grace period.

12. A market index mortgage adjustment system, comprising:

a fund processor configured to aggregate cash amounts received from a plurality of investors into a pool of cash;

an index processor configured to define at least one index representative of market values of real property in a class of real property;

an account processor configured to, for each of a plurality of borrowers, wherein the plurality of borrowers includes owners of real property in the class being financed or refinanced with market-indexed mortgage loans;

allocate cash from the pool of cash to a borrower for financing or refinancing an identified real property in the class as a market-indexed mortgage loan;

calculate time-based payments to be made by the borrower, as a loan repayment obligation, based on the cash allocated to the borrower; and

adjust one or more of the payments using the at least one index, and storing values representing the adjusted one or more payments,

wherein adjustments in the time-based payments reflect changes in market values associated with the class of real property; and

the fund processor further configured to pool market-indexed mortgage loans of the plurality of borrowers in a fund that issues one or more class of shares or units to investors, including shares or units whose values fluctuate in response to the at least one index.

13. The system of claim 12, further comprising:

a trading processor configured to issue shares against the fund.

14. The system of claim 12, wherein the account processor is configured to adjust only a portion of the payments using the index.

15. The system of claim 12, wherein the index comprises a real estate price index.

16. The system of claim 12, wherein the index comprises a real estate rental index.

17. The system of claim 12, wherein the account processor is further configured to adjust prepayment of at least some of the payments based on the index.

18. The system of claim 12, wherein one or more of the payments include principal and interest and the account processor adjusts only the interest using the index.

19. The system of claim 12, wherein one or more of the payments include principal and interest and the account processor adjusts only the principal using the index.

20. The system of claim 12, wherein one or more of the payments include principal and interest and the account processor adjusts both the principal and the interest using the index.

21. The system of claim 12, wherein at least some of the payments are interest only payments, and the account processor is configured to calculate the interest using the index.

22. The system of claim 12, wherein the account processor is configured to periodically adjust the one or more of the payments using the index, wherein the period is 1 year or less.

24. The system of claim 12, wherein account processor is further configured to adjust the one or more of the payments using the index to include an adjustment to a principal amount after an initial grace period.