Method and system for pricing forward commitments for mortgage loans and for buying committed loans

• US 8,666,879 B1
• Filed: 12/30/2003
• Issued: 03/04/2014
• Est. Priority Date: 12/30/2002
• Status: Active Grant

• Current Assignee: Fannie Mae
• Original Assignee: Fannie Mae
• Inventors: Palumbo, Donald R., Holmes, Leslie D.
• Primary Examiner(s): Colbert, Ella
• Application Number:
  US10/748,791
• Time in Patent Office: 3,717 Days
• Field of Search: 705/38, 705/39, 705/45
• US Class Current: 705/38
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• 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 40/08 Insurance

Abstract

A method for managing best efforts forward commitments for loans to be sold by a lender, where each loan has loan level data and the best efforts forward commitments have commitment data includes determining a price for the best efforts commitment based on at least the loan level data and tracking the loan level data for each loan. Upon identifying a change to the loan level data, the loan level data and the commitment data including the price is updated based on the change.

Claims

1. A computer-implemented method for managing best efforts forward commitments for mortgage loans to be sold by a lender to a secondary mortgage market purchaser, the best efforts forward commitments having commitment data, the method comprising:

determining, by a computer-implemented pricing engine, a price for the sale of a mortgage loan associated with a borrower, the mortgage loan having loan level data including loan application data that describes the mortgage loan and the borrower, the price being determined pursuant to a best efforts commitment based on at least the loan level data, wherein the price is included in the commitment data, the commitment having a commitment expiration date, the commitment expiration date defining a commitment period in which the commitment of the lender to deliver the mortgage loan to the secondary mortgage market purchaser at the determined price is based on the borrower closing the mortgage loan during the commitment period, such that the borrower closing the mortgage loan during the commitment period results in the lender being committed to deliver the mortgage to the secondary mortgage market purchaser at the determined price, and the borrower not closing the mortgage loan during the commitment period results in the lender not being committed to deliver the mortgage loan to the secondary mortgage market purchaser at the determined price;

tracking the loan level data for each mortgage loan prior to closing of the mortgage loan at a computer system associated with the secondary mortgage market purchaser, the secondary mortgage market purchaser being provided with real time access to information regarding a mortgage pipeline of the lender including the loan level data for each of the mortgage loans;

identifying, prior to closing the mortgage loan and at the computer system associated with the secondary mortgage market purchaser, a change made to the loan level data for at least one loan by the lender;

updating the loan level data for the at least one loan and the commitment data, including updating the price based on the change and extending the commitment expiration date; and

consummating a sale of the mortgage loan from the lender to the secondary mortgage market purchaser at the updated price.

2. A method according to claim 1, wherein the loan level data includes a loan identifier, a lender identifier, a loan product type, an interest rate, loan purpose, loan-to-value ratio, loan status, lock expiration date, credit risk information, underwriting criteria and a scheduled closing date.

3. A method according to claim 1, wherein updating the commitment data includes changing a commitment product.

4. A method according to claim 1, wherein updating the loan level data includes determining whether the change to the loan level data for the at least one loan results in an ineligible best efforts loan product.

5. A method according to claim 1, wherein the commitment price includes a commitment yield value.