Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Patent
1997-12-23
1999-10-12
MacDonald, Allen R.
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
705 35, G06F 1500, G06F 1521, G06F 1760, G06F 1900
Patent
active
059667001
ABSTRACT:
The present invention relates to a computer system for managing the allocation of mortgage pool risk between a mortgage originator and a funding institution. The mortgage originator issues a mortgage and the funding institution agrees to assume certain risks such as interest rate and credit risk for the mortgage up to a certain percentage. The mortgage originator and the funding institution enter into a Master Commitment agreement which has an overall credit enhancement value for mortgage funding by the mortgage originator. The system has an input device capable of receiving mortgage data from the mortgage originator. A memory has a database storing the data relating to the mortgage loan, Master Commitment, financial institution and rate and fees. A processor calculates a credit enhancement value as a function of the probability of foreclosure and the severity of loss indicated by mortgage data. An output device produces a delivery commitment in which the mortgage originator assumes obligation for losses up to the credit enhancement value and the funding institution assumes obligation for additional losses.
REFERENCES:
patent: 4876648 (1989-10-01), Lloyd
patent: 4953085 (1990-08-01), Atkins
patent: 5611052 (1997-03-01), Dykstra et al.
patent: 5644726 (1997-07-01), Oppenheimer
Gould Kenneth L.
Lundstrom Roger D.
Pollock Alex J.
Whelan Frank D.
Federal Home Loan Bank of Chicago
MacDonald Allen R.
Myhre James W.
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