Method and system for structuring a mortgage

• US 8,185,456 B2
• Filed: 05/24/2006
• Issued: 05/22/2012
• Est. Priority Date: 05/24/2006
• Status: Expired due to Fees

• Current Assignee: Crew Financial LLC
• Original Assignee: Crew Financial LLC
• Inventors: LeClair, Raymond A., Schulman, Henry Evan C.
• Primary Examiner(s): Kalinowski, Alexander
• Assistant Examiner(s): Chang, Edward
• Application Number:
  US11/440,420
• Publication Number:
  US 20070288354A1
• Time in Patent Office: 2,190 Days
• Field of Search: 705/35
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof

Abstract

Methods and systems are configured to structure a collateralized loan such that a borrower'"'"'s future income is factored into the determination of payment amounts due to a lender. The methods and systems disclosed herein provide benefits to both lenders and borrowers and, regarding real estate purchases, may expand the pool of buyers that qualify for certain mortgage amounts.

Claims

1. A computer-implemented system comprising:

a processor;

a memory containing a payment algorithm specification module;

the payment algorithm specification module configured to receive a value for each of a plurality of loan parameters associated with a collateralized loan from a lender to a borrower;

the payment algorithm specification module further configured to receive an estimated future income of the borrower for each of a plurality of time periods, wherein the estimated future income associated with a first time period differs from the estimated future income associated with a second time period; and

the payment algorithm specification module further configured to specify a payment algorithm for repaying the loan, wherein the payment algorithm specification module uses, as inputs for establishing the payment algorithm for repayment of the loan, the plurality of loan parameters and the borrower'"'"'s estimated future income for each of at least the first and second time periods; and

wherein

the payment algorithm specification module is configured to specify the payment algorithm such that the payment algorithm is configured to determine a payment amount for each of a plurality of time intervals, the payment amount for each of the time intervals to be based on a portion of a realized income value measured in the future for the then-completed time interval.

2. The system of claim 1, wherein the payment algorithm comprises an equation in which a multiplier is multiplied by a realized income.

3. The system of claim 2, wherein:

the plurality of loan parameters comprises a loan term, and a multiplier value is assigned to the multiplier such that a full repayment of the loan at approximately the end of the loan term would result if the borrower'"'"'s realized incomes for each of the plurality of time periods were to equal the estimated future incomes of the borrower for each of the plurality of time periods.

4. The system of claim 2, wherein the plurality of loan parameters comprises a loan term, and a value for the multiplier is specified to remain constant throughout the loan term.

5. The system of claim 2, wherein the plurality of loan parameters comprises a loan term, and a value for the multiplier is specified to be changed during the loan term.

6. The system of claim 2, wherein the plurality of loan parameters comprises a loan term, and a value for the multiplier is specified to be predetermined during the loan term.

7. The system of claim 1, wherein the payment algorithm specification module is configured to receive specified times for measuring each of the realized incomes, and further configured to receive specified times for determining payment amounts applicable to associated selected time intervals based on the measured realized incomes.

8. The system of claim 7, wherein at least one of the specified times for measuring a realized income occurs at or before a beginning of a selected time interval associated with the at least one specified time.

9. The system of claim 7, wherein at least one of the specified times for measuring a realized income occurs at or after completion of a selected time interval associated with the at least one specified time.

10. The system of claim 1, wherein the processor is configured to receive a plurality of income ranges for the future income and a measured realized income value for a completed time interval, and the processor is configured to determine which range of the plurality of income ranges includes the measured realized income value;

and

the system further comprises a payment amount determination module which is configured to determine a payment amount based on the range that includes the measured realized income.

11. The system of claim 3, further comprising a computer configured to, at a future time for measuring a first realized income, compute an updated estimated future income of the borrower based on at least a first measured realized income value, and

the computer being configured to determine an updated value for the multiplier, wherein said updated multiplier value would result in a full repayment of the loan at approximately the end of the loan term were a second realized future income to equal the updated estimated future income.

12. The system of claim 1, wherein the payment algorithm specifies a maximum payment amount limit.

13. The system of claim 1, wherein the payment algorithm specifies a minimum payment amount limit.

23. The system of claim 1, further comprising an amortization module which specifies an amortization schedule for payment amounts which are determinable with the payment algorithm, the amortization schedule specifying what amount of each payment amount is to be applied to paying interest and what amount of each payment amount is to be applied to paying principal.

24. The system of claim 1, wherein the payment algorithm includes instructions for having the lender share in appreciation of an asset with which the loan is collateralized.

25. The system of claim 1, wherein the payment algorithm includes instructions for having the lender share in appreciation of an asset with which the loan is collateralized if certain criteria are met.

26. The system of claim 1, wherein the payment algorithm includes instructions that when a payment amount applicable to a time interval is less than an amount of interest accrued during the time interval, the difference between the payment amount and the amount of interest accrued is to be added to a remaining principal.

27. The system of claim 1, wherein the payment algorithm includes instructions that a term of the loan is extended when a payment amount for a time interval is less than an amount of interest accrued during the time interval.

28. The system of claim 1, wherein the payment algorithm includes instructions that an interest rate applicable to a time interval is reduced at least by an amount that is sufficient to avoid negative amortization of the loan when a payment amount for the time interval is less than an amount of interest accrued during the time interval.

29. The system of claim 1, wherein the collateralized loan is a mortgage on certain real estate, and that real estate is the collateral.

30. The system of claim 1, wherein each of the estimated future incomes for each of the plurality of time periods differs from every other estimated future income for each of the plurality of time periods, and wherein the payment algorithm specification module is configured to use each of the plurality of time periods as an input.

31. The system of claim 1, wherein the estimated future income of the borrower for each of a plurality of time periods comprises projected future incomes of the borrower based at least on a profession of the borrower.

14. A computer-implemented system comprising:

a processor;

a memory containing a payment algorithm specification module;

the payment algorithm specification module configured to receive a value for each of a plurality of loan parameters associated with a collateralized loan from a lender to a borrower;

the payment algorithm specification module further configured to receive an estimated future income of the borrower for each of a plurality of time periods, wherein the estimated future income associated with a first time period differs from the estimated future income associated with a second time period; and

the payment algorithm specification module further configured to specify a payment algorithm for repaying the loan, wherein the payment algorithm specification module uses, as inputs for establishing the payment algorithm for repayment of the loan, the plurality of loan parameters and the borrower'"'"'s estimated future income for each of at least the first and second time periods; and

wherein

the payment algorithm specification module is configured to specify the payment algorithm such that the payment algorithm is configured to determine a payment amount for each of a plurality of time intervals, the payment amount for a first time interval to be based on a portion of the estimated future income of the borrower for the first time period, and the payment amount for a second time interval to be based on a portion of the estimated future income of the borrower for the second time period.

15. The system of claim 14, wherein the estimated future income is at least in part set forth in a table including estimated income values for the plurality of time periods.

16. The system of claim 14, wherein the estimated future income comprises a function which provides estimated future income values for each of the plurality of time periods using at least a baseline income and time as inputs.

17. The system of claim 14, wherein the algorithm for determining payment amounts is specified to determine a payment amount for a selected time interval as a function of a percentage of the estimated future income.

18. The system of claim 14, wherein the algorithm for determining payment amounts is specified to determine the payment amount for a selected time interval to be a percentage of the estimated future income.

19. The system of claim 17, wherein the percentage of the estimated future income is determined by applying a multiplier to the estimated future income.

20. The system of claim 19, wherein the plurality of loan parameters comprises a loan term and a value for the multiplier is specified to remain constant throughout the loan term.

21. The system of claim 19, wherein the plurality of loan parameters comprises a loan term and a value for the multiplier is specified to change during the loan term.

22. The system of claim 14, wherein the plurality of loan parameters comprises a loan term, and the specified algorithm is configured to determine payment amounts that will result in a full repayment of the loan at approximately the end of the loan term.

32. The system of claim 14, further comprising a payment amount determination module configured to calculate a plurality of future payment amounts using the payment algorithm and the estimated future income of the borrower for each of the plurality of time periods.