Multi-variable, multi-party auction and process to prop-up underwater mortgages, and stabilize/restore market values

• US 8,577,793 B1
• Filed: 06/23/2011
• Issued: 11/05/2013
• Est. Priority Date: 06/23/2010
• Status: Expired due to Fees

• Current Assignee: Ira R. Hecht, Steven D. Kravitz
• Original Assignee: Ira R. Hecht, Steven D. Kravitz
• Inventors: Hecht, Ira R., Kravitz, Steven D.
• Primary Examiner(s): Colbert, Ella
• Assistant Examiner(s): GREGG, MARY M
• Application Number:
  US13/135,051
• Time in Patent Office: 866 Days
• Field of Search: 705/38, 705/35, 705/40
• US Class Current: 705/38
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 30/08 Auctions
• 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

Online multi-variable/multi-party auctions coordinate homeowners, mortgage holders, and investors to refinance homes with underwater mortgages, being initiated by homeowner/mortgage holder registration within the website. Registration triggers email invitations with access to personalized bidding platforms. Auctioning comprises bidding for a new total loan amount equaling/exceeding current fair market values, and/or matching interest rate bids by investors, who may risk share therein, with homeowner monthly payment bids. Auction completion requires homeowner, lien holder(s), and investor(s) acceptance, resulting in mutual rescission of original loan agreement(s). Electronic closings create Time-Out Mortgages, which are recorded, and Home Certificates—a hybrid security being a combination promissory note (with additional benefits) and agreement for sharing a “Deferred Recapture Amount,” being a difference between the new principal loan amount and prior total home lien amounts. Sharing is tailored at auction according to one of several schemes incentivizing agreement, which drive up housing prices while reducing risk of foreclosure.

Claims

1. A process of coordinating and contractually binding one or more homeowners, one or more respective mortgage holders, and one or more investors, for financing of a home with an underwater mortgage using a computer system, said process comprising the following steps:

using one or more processors to execute instructions retained in machine-readable media to cause the computer system to display a website usable for a financing auction of said process;

searching, by the respective mortgage holders, over the internet for an auction website of said process;

registering, by at least one of the one or more respective mortgage holders and the one or more homeowners, in said auction website, by entering data therein;

scheduling said financing auction, said financing auction occurring on a bidding platform of said auction website;

providing the one or more investors, the one or more respective mortgage holders and the one or more homeowners with access to said bidding platform for said scheduled financing auction;

conducting said financing auction on said bidding platform, said financing auction comprising;

matching of an interest rate bid by the one or more investors with a monthly payment bid by the one or more homeowners, resulting in a calculated principal loan amount for a time-out mortgage loan;

bidding, by the one or more homeowners, the one or more respective mortgage holders, and the one or more investors, for a fractional portion of a deferred recapture amount (DRA), said DRA comprising a difference between the total amount of all of the loan agreements held by the one or more respective mortgage holders and the amount of said time out mortgage loan; and

accepting, by the one or more homeowners, the one or more respective mortgage holders, and the one or more investors, to said matched interest rate bid and corresponding monthly payment bid;

agreeing, by the one or more homeowners, the one or more respective mortgage holders, and the one or more investors-to a term for said time-out mortgage loan; and

to a post-auction varying scheme for said fractional portions of said DRA;

said post-auction varying scheme for said fractional portions of said DRA comprising a buy-in method, wherein each dollar amount of monthly payment, as a percentage, remitted by the one or more homeowners above a payment required by said time-out mortgage, thereby entitling the one or more homeowners to keep an additional percentage of said DRA; and

closing by said auction website resulting in;

mutual rescinding of all of the loan agreements held by the one or more respective mortgage holders;

issuing of said time-out mortgage loan, and a time-out mortgage against the home, and issuing of a home certificate, said home certificate evidencing an amount of investment by each of the one or more investors.

2. The process according to claim 1, said auction comprising:

an amount of sharing bid resolution algorithm; and

, wherein when said bidding by the one or more homeowners, the respective mortgage holders, and the one or more investors for said fractional amount of said DRA totals to be less than a threshold amount above 100%, said bid resolution algorithm operating to modify each of said bid fractional portions to total to 100%.

3. The process according to claim 2 wherein said bid modification by said bid resolution algorithm comprises:

reducing each bid in proportion to said total amount bid.

4. The process according to claim 1, further comprising searching, by the one or more homeowners, over the internet for an auction website of said process.

5. The process according to claim 4, further comprising communicating, by said auction website, to the one or more respective mortgage holders, the one or more investors and the one or more homeowners, of an invitation comprising particular web-site access for said financing auction on said bidding platform.