Automated loan evaluation system

• US 7,310,618 B2
• Filed: 02/21/2001
• Issued: 12/18/2007
• Est. Priority Date: 02/22/2000
• Status: Expired due to Fees

• Current Assignee: Lehman Brothers Limited (Barclays PLC)
• Original Assignee: Lehman Brothers Incorporated (Barclays PLC)
• Inventors: Libman, Brian L.
• Primary Examiner(s): Kazimi; Hani M.
• Assistant Examiner(s): Akintola; Olabode
• Application Number:
  US09/790,374
• Publication Number:
  US 20070043654A1
• Time in Patent Office: 2,491 Days
• Field of Search: 705/36.R, 705/38, 705/7, 705/35, 705/39
• 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

In at least one aspect, the present invention comprises a system and method of creating a probability of delinquency database using historical loan data and a plurality of loan factors, for use in determining a loan rate, the method comprising: identifying a plurality of multi-level loan factors; creating a pool from the historic loan data, wherein the first pool contains records relating to the plurality of multi-level loan factors; separating the pool into a set of groups based on the multi-level loan factors, calculating a probability of delinquency for each group; and arranging the probability of delinquency for each group into a database such that the probability of delinquency for each group is accessible for any combination of multi-level loan factors.

Claims

1. A method comprising:

(a) obtaining a first payment history, a first Loan-to-Value (“

LTV”

). a first credit rating, and at least one add-on loan factor for a particular borrower of a loan, and a set of historic loan data comprising records having historic payment histories, historic LTVs, historic credit ratings, and at least one historic add on loan factor;

(b) separating the records of historic loan data into a first pool based on the absence of the at least one historic add-on factor;

(c) grouping the first pool into groups based on the historic payment histories, the historic LTVs, and the historic credit ratings;

(d) determining a first probability of delinquency for the particular borrower by calculating a first incidence of delinquency of one group of the first pool;

(e) separating the records of historic loan data into a second pool based on whether the records contain the at least one historic add-on factor;

(f) grouping the second pool into sub-pools based on the at least one historic add-on factor;

(g) determining a second probability of delinquency for the particular borrower by calculating a second incidence of delinquency of one subpool of the second pool; and

(h) combining the first probability of delinquency with the second probability of delinquency to determine the total probability of delinquency for the particular borrower.

2. The method of claim 1, wherein step (c) further comprises:

(a) dividing the first pool into a plurality of levels based on the historic payment histories, and

(b) dividing the levels into a plurality of groups based on the historic LTVs and the historic credit ratings.

3. The method of claim 1, wherein the one group of the first pool has a second payment history with a first predetermined amount of the first payment history, a second credit rating within a second predetermined amount of the first credit rating, and a second LTV within a third predetermined amount of the first LTV.

4. The method of claim 1, wherein the first probability of delinquency is transformed into a base credit score.

5. The method of claim 1, wherein the second probability of delinquency is transformed into an adjustment to the base credit score.

6. The method of claim 1, wherein the at least one add-on loan factor is selected from the group consisting of:

alternative documentation, stated documentation, number of units, owner occupation, no mortgage history, combined loan-to-value ratio, cash out, debt-to-income ratio, and bankruptcy.