Method and apparatus for advanced mortgage diagnostic analytics
First Claim
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1. A computer-based method of calculating a safe score for a property comprising the steps of:
- gathering data related to a property from a database, the data comprising a current loan balance on said property, a margin of safety, an automated valuation of said property, and a forecast standard deviation, wherein the margin of safety is an amount or percentage above the current loan balance, and the forecast standard deviation is a forecast of a standard deviation for an automated valuation model used to generate the automated valuation of said property;
calculating, using a processor, an exposure value for said property using the current loan balance on said property and the margin of safety;
calculating, using the processor, an exposure variance for said property using the automated valuation of said property and the exposure value;
converting, using the processor, said exposure variance for said property into sigma units using the forecast standard deviation and the exposure variance, wherein the sigma units is a measure indicating a likelihood that a true value of the property is greater than or less than the exposure value; and
determining, using the processor, a safe score using the converted exposure variance in sigma units.
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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.
180 Citations
22 Claims
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1. A computer-based method of calculating a safe score for a property comprising the steps of:
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gathering data related to a property from a database, the data comprising a current loan balance on said property, a margin of safety, an automated valuation of said property, and a forecast standard deviation, wherein the margin of safety is an amount or percentage above the current loan balance, and the forecast standard deviation is a forecast of a standard deviation for an automated valuation model used to generate the automated valuation of said property; calculating, using a processor, an exposure value for said property using the current loan balance on said property and the margin of safety; calculating, using the processor, an exposure variance for said property using the automated valuation of said property and the exposure value; converting, using the processor, said exposure variance for said property into sigma units using the forecast standard deviation and the exposure variance, wherein the sigma units is a measure indicating a likelihood that a true value of the property is greater than or less than the exposure value; and determining, using the processor, a safe score using the converted exposure variance in sigma units. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13)
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14. A computer-based apparatus for calculating a safe score for a property comprising:
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database connector means connected to a temporary data storage means for receiving data related to a property the data comprising a current loan balance on said property, a margin of safety, an automated valuation of said property, and a forecast standard deviation, wherein the margin of safety is an amount or percentage above the current loan balance, and the forecast standard deviation is a forecast of a standard deviation for an automated valuation model used to generate the automated valuation of the property, the forecast standard deviation being calculated using valuation differences between an automated valuation of each property in a set of properties and a true value of each property in the set of properties, 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 using the current loan balance on said property and the margin of safety, for determining a pivot point for said property, for calculating an exposure variance for said property using the automated valuation of said property and the exposure value, and for converting the exposure variance for said property into sigma units using the forecast standard deviation and the exposure variance, wherein the sigma units is a measure indicating a likelihood that a true value of the property is greater than or less than the exposure value; and database connector means further connected to said calculation means for receiving percentiles in sigma units to thereby determine a safe score. - View Dependent Claims (15, 16, 17, 18, 19, 20, 21, 22)
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Specification