U.S. patent application number 11/248018 was filed with the patent office on 2006-08-24 for interactive mortgage and loan information and real-time trading system.
This patent application is currently assigned to IMX Mortgage Exchange. Invention is credited to Sadashiv Adiga, Stephen K. Fraser, Suresh Payankannur.
Application Number | 20060190394 11/248018 |
Document ID | / |
Family ID | 25456425 |
Filed Date | 2006-08-24 |
United States Patent
Application |
20060190394 |
Kind Code |
A1 |
Fraser; Stephen K. ; et
al. |
August 24, 2006 |
Interactive mortgage and loan information and real-time trading
system
Abstract
The invention provides a method and system for trading loans in
real time. Loan applications, such as home mortgage loan
applications, are made available electronically to receive bids
from a plurality of potential lenders. A transaction server
maintains a database of pending loan applications and their
statuses, which is accessible over a communications channel, such
as the Internet. Each party to a loan can search and modify the
database consistent with their role in a transaction. The invention
provides smart computerized administration that ensures personal
preferences of the participating parties are enforced, errors and
duplication is avoided, and information relating to accumulated
data is available to the parties consistent with their roles.
Inventors: |
Fraser; Stephen K.;
(Livermore, CA) ; Adiga; Sadashiv; (Hercules,
CA) ; Payankannur; Suresh; (Richmond, CA) |
Correspondence
Address: |
SWERNOFSKY LAW GROUP PC
P.O. BOX 390013
MOUNTAIN VIEW
CA
94039-0013
US
|
Assignee: |
IMX Mortgage Exchange
|
Family ID: |
25456425 |
Appl. No.: |
11/248018 |
Filed: |
October 11, 2005 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
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09411683 |
Oct 4, 1999 |
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11248018 |
Oct 11, 2005 |
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08928559 |
Sep 12, 1997 |
5995947 |
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09411683 |
Oct 4, 1999 |
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Current U.S.
Class: |
705/38 |
Current CPC
Class: |
G06Q 40/025 20130101;
G06Q 40/00 20130101; G06Q 40/04 20130101 |
Class at
Publication: |
705/038 |
International
Class: |
G06Q 40/00 20060101
G06Q040/00 |
Claims
1-38. (canceled)
39. A transaction server computer configured to process loan
applications, said transaction server including: a database of
pending loan applications, said database including status
information regarding said pending loan applications, said database
includes a set of bids associated with each said loan application;
a network interface configured to provide communications between
the transaction server and at least one client computer associated
with a party to one of said pending loan applications; a lender
information generation mechanism configured to generate a loan
profile for each of said loan applications; a set of program
modules each configured to cause the transaction server computer to
provide one or more services to said at least one client computer;
and a role validation mechanism configured to provide access to one
or more of the set of program modules responsive to said party.
40. The transaction server computer of claim 39 wherein said
pending loan applications comprise home mortgage loan
applications.
41. The transaction server computer of claim 39 wherein the set of
program modules are responsive in real time to requests received
from said at least one client computer.
42. The transaction server computer of claim 39 wherein said party
is a loan originator, a loan maker, a loan purchaser, a broker,
loan processor, manager, a prospective borrower, or loan
applicant.
43. The transaction server computer of claim 39 wherein the set of
program modules is selected from the group of a login module, a
broker module, a lender module, an administration module, an
external interface module, external service module, a notification
module, a database interface module, a geoserver module, a
monitoring module, and a system module.
44. The transaction server computer of claim 43, wherein said login
module is configured to authenticate a party.
45. The transaction server computer of claim 44, wherein said login
module is further configured to associate one of said broker
module, said lender module, or said administration module with said
party.
46. The transaction server computer of claim 43, wherein said
broker module is configured to handle server-side application
requirements of a broker station.
47. The transaction server computer of claim 43, wherein said
lender module is configured to handle server-side application
requirements of a lender station.
48. The transaction server computer of claim 43, wherein said
administration module is configured to handle server-side
application requirements of an administration station.
49. The transaction server computer of claim 43, wherein said
external interface module is configured to convert incoming data in
a first format to a second format.
50. The transaction server computer of claim 43, wherein said
external service module further comprises: a service request
mechanism configured to request data from an external service; and
a service reception mechanism configured to receive said data
requested by the service request mechanism.
51. The transaction server computer of claim 43, wherein said
notification module is configured to handle e-mail communication
with said party.
52. The transaction server computer of claim 43, wherein said
database interface module further comprises: a connection
management mechanism configured to manage the number of
simultaneous connections to said database; and an interface
mechanism configured to interface between the set of program
modules and said database.
53. The transaction server computer of claim 43, wherein said
geoserver module is configured to provide data responsive to a
query from said party.
54. The transaction server computer of claim 43, wherein said
monitoring module is configured to determine a resource usage and
to monitor said resource usage.
Description
BACKGROUND OF THE INVENTION
[0001] 1. Field of the Invention
[0002] The invention relates to an interactive mortgage and loan
information and real-time trading system.
[0003] 2. Related Art
[0004] In the art of mortgage loans and mortgage brokering, a
relatively large amount of information must be exchanged to conduct
a loan transaction, such as a new home mortgage loan. In attempting
to obtain a competitive loan for the borrower, or in attempting to
maintain competitive rates for lenders to offer loans, this
relatively large amount of information must be collected, compared,
evaluated, and disseminated to possible counterparties to the
transaction. The major parties include the borrower (and/or an
agent such as a mortgage broker) and the lender; other parties can
include appraisal agents, regulatory agencies, mortgage insurance
companies, and secondary mortgage market participants.
[0005] In known practices, nearly all the information relating to a
loan transaction is collected by hand, transmitted using paper
applications, compared by human beings (whose responsibilities
include loan evaluation, property appraisal, financial market
evaluation, and setting of lending rates), and disseminated using
paper "rate sheets" or similar advertising material. For example, a
mortgage broker attempting to obtain a loan for a borrower might be
required to interview that client, consult rate sheets from
multiple lenders to determine appropriate lending programs which
might be appropriate for that client, submit multiple applications
(possibly on multiple different forms) to selected ones of those
lenders, and await action on those applications before being able
to advise that client. Similarly, a lender attempting to set
lending rates might be required to examine the present interest
rate market, determine the mix of qualified borrowers likely to
apply, determine a set of lending programs and lending rates best
suited to the market and the risk the lender is willing to bear,
and periodically post rate sheets or similar advertising material
to multiple mortgage brokers informing them of those lending
programs and lending rates. Upon receiving a loan application, the
lender might also be required to independently evaluate the
creditworthiness of the borrower and the value of the underlying
property.
[0006] As all of these operations are presently performed by hand,
initiating loan transactions is relatively expensive. Although some
forms of automation are known, such as uniform credit scoring for
loan applications and automatic generation of loan application
documents, there are no known systems in the field of mortgage
lending for providing relatively automatic and widespread
dissemination of loan application information or lending program
information for automated comparison in real time. The fact that
these operations are performed by hand, rather than with the aid of
computer processing, also limits the flexibility of the parties to
the transaction. For borrowers, it is relatively difficult to
compare more than a relatively few lending programs. For lenders,
it is relatively difficult to select anything but a relatively
simple set of lending categories for prospective borrowers. It is
also practically impossible for lenders to experiment with new
products without broadcasting knowledge of those new products to a
wide population, including their competitors.
[0007] Accordingly, it would be advantageous to provide a method
and system for automating loan applications, such as home mortgage
loan applications, placing them up for bid by a plurality of
potential lenders, and following those loans using a technique for
managing such loan applications and bids. This advantage is
achieved in an embodiment of the invention in which a database
server maintains a database of pending loan applications and their
statuses; each party to the loan can search and modify that
database consistent with their role in the transaction, by requests
to the server from a client device identified with their role.
SUMMARY OF INVENTION
[0008] The invention provides a method and system for trading loans
in real time by making loan applications, such as home mortgage
loan applications, and placing them up for bid by a plurality of
potential lenders. A transaction server maintains a database of
pending loan applications and their statuses; each party to the
loan can search and modify that database consistent with their role
in the transaction, by requests to the server from a client device
identified with their role.
[0009] In a preferred embodiment, brokers at a broker station can
add loan applications, can review the status of loan applications
entered by that broker, are notified of lender's bids on their
loans, and can accept bids by lenders. Lenders at a lender station
can search the database for particular desired types of loans, can
sort selected loans by particular desired criteria, can bid on loan
applications, and are notified when their bids are accepted. Broker
stations, lender stations, and the transaction server can be
coupled using multiple access methods, including internet,
intranet, or dial-up or leased communication lines.
[0010] The transaction server marks prospective loans in its
database by a variety of identifiers which might be of interest to
lenders, including a loan amount, property location, property
appraisal, borrower credit information, and potential CRA
qualification for the property. The transaction server computes
information about prospective loans which might be of interest to
lenders, such as loan-to-value ratios, qualifying credit scores,
and income classification for potential CRA qualification of the
loan. The transaction server provides exogenous information which
might be of interest to lenders and brokers for pricing loans, such
as public bond market and other interest rate market news, as well
as computed information regarding the pool of loans, such as
current and past low, average, and high rates for a variety of
loans traded using the system.
[0011] In a preferred embodiment, the transaction server provides
for detecting substantially identical loan applications originated
by the same broker, so as to prevent double applications for the
same borrower, and also provides brokers and lenders each the
capability for designating counterparties with whom they wish not
to conduct business. The transaction server is also supported by
administration client/server devices for maintaining consistency
and integrity of the transactions and relationships between
parties.
BRIEF DESCRIPTION OF THE DRAWINGS
[0012] FIG. 1 shows a block diagram of an interactive mortgage and
loan information and real-time trading system.
[0013] FIG. 2 shows a process flow diagram of operation of an
interactive mortgage and loan information and real-time trading
system.
DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT
[0014] In the following description, a preferred embodiment of the
invention is described with regard to preferred process steps and
data structures. Those skilled in the art would recognize after
perusal of this application that embodiments of the invention can
be implemented using general purpose switching processors or
special purpose switching processors or other circuits adapted to
particular process steps and data structures described herein, and
that implementation of the process steps and data structures
described herein would not require undue experimentation or further
invention.
System Architecture
[0015] FIG. 1 shows a block diagram of an interactive mortgage and
loan information and real-time trading system.
[0016] An interactive mortgage and loan information and trading
system 100 includes a transaction server 110, a set of broker
stations 120, a set of lender stations 130, an administration
client 150, a set of system monitor stations 160, a web server 170,
and a communication network 140.
(1) Transaction Server
[0017] The transaction server 110 comprises a device or set of
devices coupled to the network 140, such as a general purpose
processor operating under control of operating system and
application software, and disposed to respond to messages from the
broker stations 120, the lender stations 130, and the system
monitor stations 160, as described herein. In a preferred
embodiment, the transaction server 110 can comprise a Unix server
such as a Sun UltraSparc processor operating under control of the
Solaris operating system.
[0018] The transaction server 110 includes a trading system
database 111, a geographic database 112, and a set of external
interfaces 113. The transaction server 110 enters loan profiles
into the trading system database 111 in response to requests from
the broker stations 120, searches the trading system database 111
in response to requests from the lender stations 130, and modifies
the trading system database 111 in response to changes in status
for loan profiles stored therein.
[0019] The trading system database 111 includes loan profiles and
other information needed to support trading operations for loans,
stored in a relational database accessed using a database server
module. In a preferred embodiment, the relational database
comprises an Oracle database, but in alternative embodiments the
relational database may comprise another type of relational
database, such as a Sybase database, or may comprise an
object-oriented database or another type of database structure.
[0020] The trading system database 111 includes information
regarding each loan application and its status. Each loan
application includes a loan profile, which comprises information
about the prospective loan, a set of bids, each of which comprises
an offer to make the loan from a particular lender, and a set of
status information, which relates to the processing of the loan
application using the system 100.
[0021] In a preferred embodiment, at least the following
information is included for each loan profile: [0022] information
about the loan, including--loan category (FHLMC, FNMA, Conduit, VA,
FHA, or Other); loan amount; loan type, such as adjustable or fixed
interest rate; loan duration [0023] information about the
underlying property, including--property type, such as SFR (single
family residence), 2 units, 3 units, or 4 units; property location,
by street address, city, county, and state; seller's asking price;
appraised value [0024] information about the borrower,
including--income and assets, credit history, and any negative
information about the borrower (such as bankruptcy filings or debt
discharge dates, reports of late mortgage payments)
[0025] The transaction server 110 computes some information for
each loan application which might be of interest to lenders and
enters that information in the trading system database 111 when the
loan profile itself is entered.
[0026] In a preferred embodiment, this computed information
includes: [0027] computed information about the loan,
including--LTV (loan to value), CLTV (combined loan to value); debt
ratios (Front ratio and Back ratio) [0028] computed information
about the property, including--its census tract, its MSA
(Metropolitan Statistical Area); its qualification as being in an
area with majority population belonging to ethnic minorities; the
income classification for its MSA [0029] computed information about
the borrower, including--combined income and combined debt for
multiple borrowers; qualifying credit score; CRA qualification for
the loan (responsive to the borrower's income, the median income
for the property's census tract, and the median income for the
property's MSA)
[0030] The geographic database 112 includes a geocoded database
accessed using a geographic database module. In a preferred
embodiment, the geocoded database relates each property address to
its corresponding census tract, and comprises information relating
to each census tract, such as median income, used for computing
possible CRA qualification for the loan. The transaction server 110
reads the geographic database 112 to determine information relating
to the property.
[0031] The external interfaces 113 include communication links to
exogenous information and services, using the network 140 or other
direct links. The transaction server 110 uses the external
interfaces 113 to obtain information relating to the interest rate
markets, the borrower, or the property.
[0032] In a preferred embodiment, these exogenous information and
services include: [0033] credit agencies and credit information
provided by them [0034] desktop underwriting systems [0035] MDEX
[0036] loan processing systems [0037] real estate appraisal systems
[0038] mortgage insurance agencies and mortgage scores provided by
them [0039] information sources for public market and other news,
including--real time quotes for 10 year Treasury notes, 30 year
Treasury bonds, DJIA (Dow Jones Industrial Average), and NSDQ
(National Securities Dealers Quotes)
[0040] In a preferred embodiment, the transaction server 110
includes a set of program modules. Each module is a set of software
objects and/or program elements, collectively having the ability to
execute independently in a separate thread or logical chain of
process execution. Each module can be executed as a separate
logical server or using a separate physical device. However, for
clients such as the broker stations 120, the lender stations 130,
and the administrative stations 150, the transaction server 110
operates as a single logical server available using the network
140.
[0041] In a preferred embodiment, the transaction server 110
includes the following program modules: [0042] login module--This
module is responsible for password checking, access control, and
assignment of a particular program module to service the client.
Each broker station 120 is serviced by a broker module, each lender
station 130 is serviced by a lender module, and each administration
station 150 is serviced by an administration module.
[0043] In a preferred embodiment, the login module also implements
a load management policy so as to distribute computing tasks among
different server devices on the network 140. [0044] broker
module--This module handles all server-side application
requirements of the broker station 120. [0045] lender module--This
module handles all server-side application requirements of the
lender station 130. [0046] administration module--This module
handles all server-side application requirements of the
administration station 150. [0047] external interface modules--Each
interface to an external loan origination package or loan
documentation package coupleable to the transaction server 110 has
its own corresponding external interface module, for converting
incoming data to a format for communication with the respective
application module or database (most interfaces require only one
way communication to receive data from an external package). [0048]
external service modules--Each external service has a module for
communicating with that external service and for obtaining
information in a format required by the external service. For
example, one of the external service modules would be used to
obtain credit scores and reports from credit reporting agencies
(most external services require two way communication with an
external agent or process). [0049] notification module--This module
handles notification and electronic mail communication with the
broker stations 120 and the lender stations 130. [0050] database
interface module--This module handles all interface requirements
between application modules and the databases. For example, the
database interface module manages (a) the number of simultaneous
connections to the database such that the total number is
maintained within applicable license agreements; and (b) any
integrity problems in interactions between application modules and
the databases. Thus, this module allows the Transaction Server to
be connected to different types of databases such as relational
databases or object-oriented databases. [0051] geoserver
module--This module receives the address sent to the transaction
server 110, performs a query to the geographic database for any
matches, evaluates any matches and prepares a query response to the
broker station 120. [0052] monitoring module--This module manages
resource usage by other modules and by the entire system. [0053]
system module--This module includes a collection of data objects
and program elements for utility tasks such as printing, reporting,
and audit trails. [0054] trading system database 111--This database
includes loan profile data from the broker stations 120, computed
data for those loan profiles, and other relevant data needed to
support real-time trading (such as user profiles and access
permission information). [0055] geographical database 112--This
database includes data based on that published by the U.S. Census
Bureau and the U.S. Postal Service ZIP +4 directory files.
[0056] In a preferred embodiment, the transaction server 110 can
configure its program modules and change operating parameters
dynamically while the system 100 is operating, by editing selected
files having operating parameters used during operation of the
system 100. Thus, additional devices can be added into the network
140 to meet resource requirements of the system 100.
(2) Broker Stations
[0057] Each of the broker stations 120 comprises a device or set of
devices coupled to the network 140, such as a general purpose
processor operating under control of operating system and
application software, and disposed to enter and process loan
profiles, as described herein. In a preferred embodiment, one of
the broker stations 120 can comprise a PC workstation such as an
Intel Pentium processor operating under control of the Microsoft
Windows 95 operating system.
[0058] The broker station 120 operates under control of broker
client software, which interacts using the network 140 with the
transaction server 110 as described herein. The broker station 120
includes information input devices, such as a keyboard and mouse or
other pointing device, and information output and presentation
devices, such as a monitor and printer.
[0059] As used herein, the term "broker" includes any person or
entity fulfilling a role as a loan originator, not necessarily a
loan broker or a mortgage broker. For example, the broker stations
120 could be used directly by prospective borrowers, by
cooperatives thereof, or by certain classes of loan officers at
lending institutions.
[0060] A brokerage organization can use the broker station 120 so
as to coordinate with the brokerage's organizational structure. For
example, a loan processor or a manager can enter and view loans on
behalf of one or more brokers, either individually or
simultaneously in one screen display. Typically, a loan processor
would act on behalf of a small number of selected brokers, while a
manager would act on behalf of all brokers possibly including
himself or herself.
[0061] A broker uses the broker station 120 to transmit loan
profiles to the transaction server 110 (thus entering those loan
profiles into the system 100 for processing), to review the status
of those loan profiles as they are processed by the system 100, to
receive notification of bids on those loan profiles by lenders, to
review bids by lenders, to accept or decline bids by lenders, and
to communicate with other users of the system 100.
[0062] In a preferred embodiment, the broker station 120 makes
connections to the transaction server 110 using the network 140 on
an as-needed basis, so as to send messages to the transaction
server 110 without excessive use of the network 140. Thus, when the
broker station 120 has a loan profile to transfer to the
transaction server 110, the broker station 120 makes the connection
to the transaction server 110 using the network 140 at that time,
rather than maintaining a connection to the transaction server 110
while the broker is composing or editing the loan profile
information.
[0063] The broker station 120 can also receive asynchronous
communications from the transaction server 110, such as in the
event there are urgent communications or other information of
immediate interest to the broker. For example, the broker can
request the transaction server 110 to transmit messages to the
broker station 120 whenever any loan profile receives a bid having
specified criteria (the broker can set these criteria, or can
request notification of all bids or of none). The broker station
120 can also receive electronic mail messages from other users of
the system 100, including other brokers, lenders, or other
parties.
[0064] The transaction server 110 can also broadcast events of
interest to all broker stations 120, lender stations 130, other
parties, or selected ones thereof.
[0065] In a preferred embodiment, the broker station 120 includes a
software interface to an existing loan package software element, so
that brokers can use that existing loan package software element to
prepare loan profiles and transmit those loan profiles to the
transaction server 1 10.
(3) Lender Stations
[0066] Each of the lender stations 130 comprises a device or set of
devices coupled to the network 140, such as a general purpose
processor operating under control of operating system and
application software, and disposed to process loan profiles, as
described herein. In a preferred embodiment, one of the lender
stations 130 can comprise a PC workstation such as an Intel Pentium
processor operating under control of the Microsoft Windows 95
operating system.
[0067] The lender station 130 operates under control of lender
client software, which interacts using the network 140 with the
transaction server 110 as described herein. The lender station 130
includes information input devices, such as a keyboard and mouse or
other pointing device, and information output and presentation
devices, such as a monitor and printer.
[0068] As used herein, the term "lender" includes any person or
entity fulfilling a role as a loan maker or loan purchaser, not
necessarily an actual lending institution or officer thereof.
[0069] A lender uses the lender station 130 to search the database
for particular desired types of loans, to sort selected loans by
particular desired criteria, to bid on loan applications, and to be
notified when their bids are accepted. The lender at the lender
station 130 can construct and store its own particular desired
criteria, and retrieve and reuse those stored criteria. The lender
at the lender station 130 can also direct the transaction server
110 to actively search for its own particular desired criteria, and
to notify the lender at the lender station 130 when any loans
matching those criteria appear in the trading system database
111.
[0070] In a preferred embodiment, similar to the broker station
120, the lender station 130 makes connections to the transaction
server 110 using the network 140 on an as-needed basis, so as to
send messages to the transaction server 110 without excessive use
of the network 140.
[0071] Similar to the broker station 120, the lender station 130
can also receive asynchronous communications from the transaction
server 110, such as in the event there are urgent communications or
other information of immediate interest to the lender. Also similar
to the broker station 120, the lender station 130 can also receive
electronic mail messages from other users of the system 100,
including brokers, other lenders, or other parties.
[0072] Similar to the broker station 120, the lender broker station
130 includes a software interface to an existing desktop
underwriting software element, so that lenders can use that
existing desktop underwriting software element to review loan
profiles and decide whether or not to bid on those loan
profiles.
(4) Administration Station
[0073] The administration client 150 comprises a device or set of
devices coupled to the network 140, such as a general purpose
processor operating under control of operating system and
application software, and disposed to process loan profiles, as
described herein. In a preferred embodiment, the administration
client 150 can comprise a PC workstation such as an Intel Pentium
processor operating under control of the Microsoft Windows 95
operating system, or can comprise software operating on a processor
used for the transaction server 110.
[0074] The administration client 150 operates under control of
administration client software, which interacts using the network
140 with the transaction server 110 as described herein. The
administration client 150 includes information input devices, such
as a keyboard and mouse or other pointing device, and information
output and presentation devices, such as a monitor and printer.
[0075] As used herein, the term "administrator" includes any person
or entity fulfilling a role as an administrator of the system 100,
not necessarily an official of any entity associated with
administration or maintenance of the system 100.
[0076] An administrator uses the administration client 150 to
monitor operation of the system 100, to generate reports on
operation of the system 100, and to be notified of any alertable
conditions of the system 100.
[0077] Information is collected by the administration client 150
and stored in the system 100 and used in support of trading,
including the following [0078] personal and organizational
information about the parties (both brokers and lenders),
including--organizational affiliation, address and telephone number
for contact, delivery information, electronic mail address [0079]
information about changes in relationship between any parties,
including--when a loan processor or lender representative enters or
leaves any selected broker or lender organization [0080] This
information is transmitted to the transaction server 110 so as to
ensure integrity of trading operations. For example, the
transaction server 110 can enable or disable passwords at
appropriate times, and can track any loans affiliated with the
parties after their change in organizational affiliation. [0081]
modification of a selected loan profile at the request of a broker
client 120
[0082] Information is available to the administrator at the
administration client 150 information regarding performance of the
system 100, including the following: [0083] number of brokers using
the system 100 [0084] number of lenders using the system 100 [0085]
number of loan profiles processed over a specified period of time
[0086] number of loan profiles stored in the trading system
database 111
[0087] In a preferred embodiment, similar to the broker station
120, the administration client 150 makes connections to the
transaction server 110 using the network 140 on an as-needed basis,
so as to send messages to the transaction server 110 without
excessive use of the network 140.
[0088] Similar to the broker station 120, the administration client
150 can also receive asynchronous communications from the
transaction server 110, such as in the event there are urgent
communications or other information of immediate interest to the
administrator. Also similar to the broker station 120, the
administration client 150 can also receive electronic mail messages
from other users of the system 100, including brokers, lenders, or
other parties.
(5) System Monitor Station
[0089] A set of system monitor stations 160 are coupled to the
network 140 for remotely monitoring and controlling the state and
usage of the transaction server 110. An operator using one or more
of the system monitor stations 160 is capable of starting or
stopping one of the program modules of the transaction server 110
or other components of the system 100. Each system monitor stations
160 provides visual display of the state and usage of the
transaction server 110, selected ones of its program modules, and
the network 140.
(6) Web Server
[0090] A web server 170 is coupled to the network 140 for
maintaining and serving documents and other information used by
brokers at the broker stations 120, lenders at the lender stations
130, and administrators at the administrator stations 150. In a
preferred embodiment, the web server 170 includes the following
information: [0091] due diligence information on brokers and
lenders, made available only to authorized persons for review;
[0092] loan documents deposited by brokers or lenders, to be
forwarded or transmitted only to authorized persons; [0093] rules,
regulations, and procedures for trading using the system 100, made
available to all authorized persons (7) Other System Elements
[0094] The network 140 provides for communication between the
transaction server 110, the broker station 120, the lender station
130, and the administration station 150, using messages as
described herein and message protocols appropriate to transmission
and reception of those messages. The network 140 includes a WAN
(wide area network) such as the "Advantis" network available from
IBM Corporation of Armonk, N.Y. However, in alternative
embodiments, the network 140 may use internet, intranet, dial-up
telephone lines or leased communication lines, or some combination
thereof. In a preferred embodiment, the network 140 uses duplicate
communication lines between nodes, and provides for automated
failover transparent to users.
[0095] In a preferred embodiment, messages transmitted using the
network are encrypted or use digital signatures or other security
measures to verify their source and to assure that they are not
tapped or forged by intruders.
System Operation
[0096] FIG. 2 shows a process flow diagram of operation of an
interactive mortgage and loan information and real-time trading
system.
[0097] A method 200 of operation of the system 100 includes a
plurality of flow points and process steps as described herein.
[0098] At a flow point 210, a prospective borrower desires to
obtain a home mortgage loan or similar loan.
[0099] At a step 221, the borrower transmits prospective loan
information regarding a prospective loan application to a mortgage
broker, loan broker, or similar agent. In a preferred embodiment,
the prospective loan information can be transmitted using an
industry standard form for prospective loan information, such as a
Form 1003 or Form 1008. The prospective loan information can also
be transmitted using a computer file prepared using an existing
loan documentation or origination software package.
[0100] At a step 222, the broker at the broker station 120 logs in
to the transaction server 110 and verifies that the broker station
120 is authorized to access the system 100. In this step, the
transaction server 110 transmits any access control data or other
data needed to initialize the broker station 120 so as to customize
it for access by that individual broker, loan processor, or broker
manager.
[0101] The broker can perform one of a set of functions using the
broker station 120, including the following: [0102] managing loan
profiles, including--creating a loan profile and adding it to the
trading system database 111; reviewing a loan profile already in
the trading system database 111; altering or otherwise updating a
loan profile already in the trading system database 111 [0103]
managing loan portfolios, including--searching pending loan
profiles for those with or without bids, or for those with accepted
bids [0104] managing bids on loans, including--viewing bids on loan
profiles, accepting bids, viewing accepted bids [0105] viewing
market information, including--viewing real time market data,
viewing other mortgage news feeds or other news feeds [0106]
prequalifying borrowers, including--viewing interest rates
available on the system 100, such as the average interest rate,
high interest rate, low interest rate, or median interest rate
associated with selected loan profile information; viewing
aggregate interest rates for the entire system 100; viewing lender
activity in terms of number of lenders who have purchased selected
types of loans [0107] managing lender selection,
including--deselecting particular lenders so that those lenders do
not see loan profiles from this broker station 120; reselecting
particular lenders [0108] communicating with other users of the
system 100, including--electronic mail messages; paging [0109]
password management, including--password changes
[0110] In a preferred embodiment, the system 100 allows
hierarchical management of loans from the perspective of the loan
originator. A loan processor is allowed to perform these functions
on behalf of one or more selected brokers, but is not allowed to
post a loan on the loan processor's own behalf. Brokers can
delegate authority to loan processors to post loans, and can
exclude or include authority to accept bids with that delegation of
authority. A selected broker manager is allowed to perform these
functions as well as to post loans on the manager's own behalf.
Authorization as a broker, loan processor, or manager is performed
in the step 222 during login.
[0111] At a step 223, the broker at the broker station 120
interactively enters data for the loan profile, optionally
periodically or intermittently save that data, optionally edits
that data, optionally validates that data for reasonable values at
the broker station 120, and when complete, prepares to transmit the
completed loan profile to the transaction server 110.
[0112] At a step 224, the broker at the broker station 120
optionally reviews financial market information and mortgage market
information relevant to the loan profile. This allows the broker to
set competitive asking prices for loan profiles.
[0113] At a step 225, the broker at the broker station 120 sets a
selected asking price for the loan profile.
[0114] At a step 226, the broker station 120 transmits a loan
profile to the transaction server 110. The loan profile includes
the prospective loan information, but the transaction server 110
does not identify the borrower or the broker to prospective
lenders.
[0115] At a step 227, the transaction server 110 validates the
information provided for each loan profile, such as determining
whether there is in fact a property at the indicated property
location and whether there is in fact a property of the indicated
property type at the indicated property location. If the
transaction server 110 determines that the information provided for
the loan profile is not valid (to more than a trivial extent), the
transaction server 110 responds to the broker station 120 by
requesting correction.
[0116] As part of the step 227, the transaction server 110 or the
broker station 120 can transform certain data entry values so as to
make it convenient for the broker to enter data. For example, for
loan amount, the transaction server 110 or the broker station 120
can accept the value "300K" and transform that to the value
"300,000".
[0117] Also as part of the step 227, the transaction server 110
provides for detecting substantially identical loan profiles
originated by the same broker station 120, so as to prevent
multiple applications for the same borrower for the same property;
this practice is sometimes known as "double apping".
[0118] At a step 228, the transaction server 110 computes any
computed information for the loan profile (including determining
whether the loan profile is CRA eligible) and stores the loan
profile in the trading system database 111.
[0119] At a step 229, the transaction server 110 computes aggregate
tags for the loan profile so as to respond to specialized lender
queries, such as whether the loan profile is for a "prime" loan or
a "subprime" loan or whether the loan profile is CRA eligible), and
stores that information in the loan profile in the trading system
database 111.
[0120] At a flow point 230, a prospective lender desires to bid on
one or more loan applications.
[0121] At a step 241, the lender at the lender station 130 logs in
to the transaction server 110 and verifies that the lender station
130 is authorized to access the system 100.
[0122] In a preferred embodiment, selected lenders are allowed to
access selected categories of loan profiles depending on the nature
of their membership or privileges granted to them when signing up
for using the system 100. For example, selected portions of the
lender's ability to query the trading system database 111 can
depend on the level of service the lender requested when signing up
for the system 100. As part of the step 241, this information is
transmitted by the transaction server 110 to the lender station 130
upon verification of the lender station 130.
[0123] The lender can perform one of a set of functions using the
lender station 130, including the following: [0124] managing loan
profile searches, including--defining loan profile searches,
storing loan profile searches for later use or reuse, directing the
transaction server 110 to perform a loan profile search [0125] Loan
profile searches can specify that the loan profile can be
considered for community investment purposes or is CRA qualified.
[0126] Loan profile searches can also be specified to be "active,"
in which the transaction server 110 is directed to periodically
perform the loan profile search on updated contents of the trading
system database 111, and to notify the lender station 130 of
revised results of the active loan profile search. [0127] managing
search results, including--viewing results of a loan profile search
[0128] managing bids on loans, including--placing bids on loan
profiles, receiving notification of accepted bids [0129] The
transaction server 110 provides limited information to this
particular lender station 130 on bids placed by other lender
stations 130. In the case that this particular lender station 130
had the winning bid, the next best bid is provided for display; in
the case that this particular lender station 130 had its bid
rejected, the winning bid is provided for display. [0130] managing
loan portfolios, including--searching loan profiles for accepted
bids; searching loan profiles for selected status of loan
processing; viewing particular loan profiles for bid or processing
status [0131] viewing market information, including--viewing real
time market data, viewing other mortgage news feeds or other news
feeds [0132] managing broker selection, including--deselecting
particular brokers so that loan profiles from those brokers are not
found by loan profile searches from this lender station 130;
reselecting particular brokers; viewing due diligence information
on particular brokers [0133] communicating with other users of the
system 100, including--electronic mail messages; paging [0134]
password management, including--password changes
[0135] At a step 242, the lender at the lender station 130
determines a query profile for querying the database, depending on
the loan programs available to the lender at that time. In a
preferred embodiment, the lender station 130 optionally stores the
query profiles, so that the lender can optionally use or modify a
query profile for reuse.
[0136] At a step 243, the lender at the lender station 130
transmits a database query to the transaction server, requesting
loan profiles regarding prospective loans which might be of
interest to the lender. As part of the query, the lender can choose
to retrieve only those loans on which the lender has not already
bid, or to retrieve all such loans regardless of their bid
status.
[0137] Although the lender is not informed of the identity of the
borrower, the lender can query for searchable database elements
relating to the borrower. For example, the lender can search on
criteria such as the following: [0138] loan category (FHLMC, FNMA,
Conduit, VA, FHA, Other); loan type (adjustable or fixed interest
rate); amortization time; loan purpose (new purchase, improvement);
occupancy status [0139] calculated credit information for the loan,
such as a LTV (loan to value) ratio, a qualifying credit score,
front and back ratios, loan lock period, a total loan amount,
whether the loan is "conforming" [0140] particular qualifying
credit information regarding the borrower, such as gross family
income, other outstanding debts, or credit history reports [0141]
particular credit information regarding the property, such as its
nature (raw land, condominium, detached single family home,
apartment less than four units, income property), its location
(census tract, zip code, city, county, state), and whether it
qualifies for CRA (Community Reinvestment Act) credit for the
lender [0142] particular credit information regarding the broker,
such as a history of loan qualification or loan performance for
loans originating with that broker
[0143] At a step 244, the transaction server 110 performs a
database lookup for the trading system database 111 in response to
the database query, and transmits a query response to the lender
station 130. The query response identifies loan profiles which
match the database query.
[0144] At a step 245, the transaction server 110 transmits
information regarding loan profiles matching the query to the
lender station 130. In a preferred embodiment, loans already bid
upon by the lender are so marked, such as by being displayed in a
different color.
[0145] At a step 246, the lender at the lender station 130 can view
details of the loan profile interactively. In a preferred
embodiment, the lender's attention is drawn by marking selected
loan profiles, such as by being displayed in a different color.
Selected loan profiles can include those having comments regarding
the nature of the property or qualifying qualitative remarks.
[0146] At a step 247, the lender at the lender station 130
optionally reviews the lender's portfolio of those loans with
accepted or rejected bids and those loans waiting for responses
from brokers at broker stations 120. The lender at the lender
station 130 optionally reviews the lender's bids declined by
brokers at broker stations 120 against winning bids, and optionally
reviews the lender's winning bids against others' bids declined by
brokers at broker stations 120. The lender at the lender station
130 optionally reviews market performance, including activity in
the system 100.
[0147] At a step 248, the lender at the lender station 130 selects
a loan profile for bid and optionally requests details of that
selected loan profile; in response, the transaction server 110
transmits details about the loan profiles to the lender station
130.
[0148] At a step 249, the lender at the lender station 130
transmits a bid on one of the loan profiles. The transaction server
110 enters the bid in the loan profile, indicating that the lender
has bid on the loan profile, but does not identify the lender to
prospective borrowers or brokers.
[0149] The bid can have an associated expiration time, after which
the transaction server 110 will mark the bid withdrawn (or delete
it), so that it can no longer be accepted.
[0150] In a preferred embodiment, the lender at the lender station
130 can post a single common bid for multiple loan profiles.
[0151] At a step 250, the transaction server 110 transmits a bid
notification to each broker station 120 associated with a loan
profile which has received a bid. The bid notification can include
one or more of the following: (a) a bid alert on a display at the
broker station 120, (b) a pager notification to the broker; (c) an
electronic mail message to the broker station 120.
[0152] At a flow point 260, a prospective borrower desires to
accept a bid on a loan application.
[0153] At a step 271, the broker at the broker station 120 logs in
to the transaction server 110 and verifies that the broker station
120 is authorized to access the system 100 and is authorized to
accept bids for that broker.
[0154] At a step 272, the broker at the broker station 120
optionally reviews the broker's portfolio of those loans with
accepted bids, those loans with pending unaccepted bids, and those
loans waiting for bids from lenders at lender stations 130. The
broker at the lender station 130 optionally reviews market
performance, including activity in the system 100.
[0155] At a step 273, the broker at the broker station 120 selects
a loan profile with pending unaccepted bids and optionally requests
details of that selected loan profile; in response, the transaction
server 110 transmits details about the loan profiles to the broker
station 120. The broker at the broker station 120 selects one or
more pending bids for that loan profile and optionally requests
details about those bids; in response, the transaction server 110
transmits details about the pending bids to the broker station
120.
[0156] At a step 274, the broker station 120 transmits an
acceptance, for a particular bid for a particular loan profile, to
the transaction server 110. The transaction server 110 marks that
bid at the loan profile as having been accepted, and marks all
other bids at the loan profile as having been rejected.
[0157] At a step 275, the transaction server 110 notifies the
winning bidder lender of the bid acceptance.
[0158] At a step 276, the transaction server 110 transmits complete
prospective loan information to the lender at the lender station
130 and complete lender information to the broker at the broker
station 120, thus informing the borrower of the identity of the
lender and informing the lender of the identity of the
borrower.
[0159] Although the lender at the lender station 130 is not
informed of the identity of the broker associated with the loan
profile until the bid is accepted, the lender at the lender station
130 can select broker stations 120 for identification as being
undesirable, so that loan profiles from those broker stations 120
are not transmitted in the query response. Similarly, although the
broker at the broker station 120 is not informed of the identity of
the lender associated with the bid, the broker at the broker
station 120 can select lender stations 130 for identification as
being undesirable, so that bids from those lender stations 130 are
not displayed in the loan profile (and the broker station 120 is
not notified of receipt of bids from those lender stations
130).
[0160] At a step 277, the broker transmits, either on paper or by
EDI (electronic data interchange), a complete loan application
package in a format acceptable to the particular lender. After
verification of the prospective loan information or other
formalities, the lender completes the loan.
[0161] The broker at the broker station 120 can also prequalify
prospective borrowers or a prospective loan profile so as to
determine feasibility for a particular loan or a particular loan
amount.
[0162] At a flow point 280, a broker desires to prequalify a
prospective borrower.
[0163] At a step 291, the broker at the broker station 120 logs in
to the transaction server 110 and verifies that the broker station
120 is authorized to access the system 100.
[0164] At a step 292, the transaction server 110 transmits to the
broker station 120, and the broker station 120 initializes, search
criteria for prequalification with a set of loan products available
from lenders at lender stations 130 or otherwise tradeable on the
system 100.
[0165] At a step 293, the broker at the broker station 120 enters
preliminary information regarding the prospective borrower, such
as--expected credit score, and expected front ratio, back ratio,
and LTV ratio. The broker at the broker station 120 can enter
information regarding points or rates, and obtain current and past
corresponding points or rates; for example, the broker at the
broker station 120 can enter a selected interest rate and obtain
the average, high, and low values for points corresponding to that
interest rate for completed loan transactions on the system 100.
The broker at the broker station 120 can also determine statistics
regarding how many lenders have made loans of those types.
[0166] At a step 294, the broker at the broker station 120 can
inform the prospective borrower about whether or not it is feasible
to obtain competitive rates in those contemplated ranges.
[0167] The transaction server 110 records information regarding
pending loan profiles and completed loans for later monitoring and
reporting by the administrative client 150. In a preferred
embodiment, this information includes at least the following:
[0168] an audit trail of all actions taken with regard to each
particular loan profile, including all transaction data associated
with the loan profile for future verification [0169] a record of
loan performance for loan profiles which have been processed using
the system 100, including a database of loan performance searchable
by various criteria
[0170] In a preferred embodiment, the borrower and the lender are
each charged a fee for the service provided by the transaction
server. The fee is paid out of escrow funds by a selected escrow
company when the loan and an associated purchase of the property
are completed. The amount of the fee can be fixed or can be varied
in response to the prospective loan information, such as the amount
of the loan, and in a preferred embodiment is varied in response to
CRA qualification for the loan.
Alternative Embodiments
[0171] Although preferred embodiments are disclosed herein, many
variations are possible which remain within the concept, scope, and
spirit of the invention, and these variations would become clear to
those skilled in the art after perusal of this application.
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