Method and apparatus for advanced mortgage diagnostic analytics

• US 20060271472A1
• Filed: 05/24/2005
• Published: 11/30/2006
• Est. Priority Date: 05/24/2005
• Status: Active Grant

• Current Assignee: Corelogic Solutions LLC (CoreLogic Incorporated)
• Original Assignee: First American Real Estate Solutions LLC (CoreLogic Incorporated)
• Inventors: Cagan, Christopher L.
• Granted Patent: US 7,853,518 B2
• Time in Patent Office: Days
• US Class Current: 705/38
• 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

Abstract

A method and apparatus for calculating individual or collective safe scores for properties with loans. These safe scores are useful in comparing the risk of loss due to exposure in the case of a default on the loan or loans being evaluated and may be used to objectively compare individual loans or groups of loans for such risk and for the worthiness for refinancing or additional lending.

Claims

1. A computer-based method of calculating a safe score for a property comprising the steps of:

gathering data related to a property;

calculating an exposure value for said property;

calculating an exposure variance for said property;

converting said exposure variance for said property into sigma units; and

determining a safe score using the converted exposure variance in sigma units.

2. The method of claim 1, wherein said steps are repeated for each property in a subject group of properties.

3. The method of claim 2, wherein said safe scores are averaged to create a median safe score for said subject group of properties.

4. The method of claim 2, wherein said safe scores are averaged to create a mean safe score for said subject group of properties.

5. The method of claim 1, wherein said data includes the current loan balance on said property.

6. The method of claim 1, wherein said data includes the automated valuation of said property.

7. The method of claim 1, wherein said data includes a margin of safety.

8. The method of claim 1, wherein said exposure variance is:

(automated valuation−

exposure value)/exposure value.

9. The method of claim 1, wherein said converting step is accomplished by dividing said exposure variance by a forecast standard deviation.

10. The method of claim 1, wherein said safe score is the percentage of potential true valuation variances in sigma units less than said exposure variance in sigma units.

11. The method of claim 1, wherein said determining step is accomplished by calculating the percentile of the variance measured in sigma units.

12. The method of claim 1, wherein said determining step is accomplished by using a lookup table of percentile table of variance measured in sigma units.

13. The method of claim 1, further comprising the step of calculating the good and bad portions of a loan for said property.

14. The method of claim 1, further comprising the step of calculating a bad part ratio.

15. The method of claim 14, wherein said bad part ratio is:

((1−

SS)*TLA)/TLA

Where;

SS is a safe score, namely an indicator of the potential exposure should the loan go into default described as a percentage represented as a decimal number from 0 to 1.00; and

TLA is the total loan amount, namely the total of all loan balances owed outstanding on said property.

16. The method of claim 1, further comprising the step of calculating a bad part ratio.

17. The method of claim 16, wherein said bad part ratio is:

((100−

SS)*TLA)/(TLA*100)

Where;

SS is a safe score, namely an indicator of the potential exposure should the loan go into default described as a decimal number from 0 to 100; and

TLA is the total loan amount, namely the total of all loans outstanding on said property.

18. The method of claim 2, further comprising the step of calculating a bad part ratio.

19. The method of claim 18, wherein said bad part ratio is:

Σ

((1−

SS)*TLA)/Σ

(TLA)

Where;

SS is a safe score, namely an indicator of the potential exposure should the loan for each said property in said subject group of properties go into default described as a percentage represented as a decimal number from 0 to 1.00; and

TLA is a total loan amount, namely the total of all loan balances owed outstanding for each said property in said subject group of properties.

20. The method of claim 2, further comprising the step of calculating a bad part ratio.

21. The method of claim 20, wherein said bad part ratio is:

Σ

((100−

SS)*TLA)/Σ

(TLA*100)

Where;

SS is a safe score, namely an indicator of the potential exposure should the loan for each said property in said subject group of properties go into default described as a decimal number from 0 to 100; and

TLA is a total loan amount, namely the total of all loans outstanding for each said property in said subject group of properties.

22. A digital computer system programmed to perform the steps specified in the method of claim 1.

23. Computer-readable media containing programming designed to accomplish the method of claim 1.

24. A computer-based apparatus for calculating a safe score for a property comprising:

database connector means connected to a temporary data storage means for receiving data related to a property;

automated valuation model connector means connected to said temporary data storage means for receiving automated valuations of said property;

calculation means connected to said temporary data storage means for calculating an exposure value for said property, determining the pivot point for said property, for calculating an exposure variance for said property, and for converting the exposure variance for said property into sigma units; and

database connector means further connected to said calculation means for receiving percentiles in sigma units to thereby determine a safe score.

25. The apparatus of claim 24, wherein said calculation means further comprises an aggregation means for calculating aggregate safe scores for a subject group of properties.

26. The apparatus of claim 24, wherein said exposure variance is:

(automated valuation−

exposure value)/exposure value.

27. The apparatus of claim 24, wherein said exposure variance in sigma units is the exposure variance divided by a forecast standard deviation.

28. The apparatus of claim 24, wherein said safe score is the percentage of potential true valuation variances in sigma units less than said exposure variance in sigma units.

29. The apparatus of claim 24, wherein said calculation means further calculates the good and bad portions of a loan for said property.

30. The apparatus of claim 24, wherein said calculation means further performs the step of calculating a bad part ratio.

31. The apparatus of claim 30, wherein said bad part ratio is:

((1−

SS)*TLA)/(TLA)

Where

SS is a safe score, namely an indicator of the potential exposure should the loan go into default described as a percentage represented by a decimal number from 0 to 1.00; and

TLA is the total loan amount, namely the total of all loans outstanding on said property.

32. The apparatus of claim 25, wherein said calculation means further performs the step of calculating a bad part ratio.

33. The apparatus of claim 32, wherein said bad part ratio is:

Σ

((1−

SS)*TLA)/Σ

(TLA)

Where;

SS is a safe score, namely an indicator of the potential exposure should the loan for each said property in said subject group of properties go into default described as a percentage represented as a decimal number from 0 to 1.00; and

TLA is a total loan amount, namely the total of all loans outstanding for each said property in said subject group of properties.

34. The apparatus of claim 25, wherein said calculation means further performs the step of calculating a bad part ratio.

35. The apparatus of claim 34, wherein said bad part ratio is:

Σ

((100−

SS)*TLA)/Σ

(TLA*100)

Where;

SS is a safe score, namely an indicator of the potential exposure should the loan for each said property in said subject group of properties go into default described as a decimal number from 0 to 100; and

TLA is a total loan amount, namely the total of all loans outstanding for each said property in said subject group of properties.