U.S. patent application number 11/876540 was filed with the patent office on 2008-05-01 for method and system for loan organization and underwriting.
Invention is credited to John F. Mahoney, James M. Mohen.
Application Number | 20080103963 11/876540 |
Document ID | / |
Family ID | 38607130 |
Filed Date | 2008-05-01 |
United States Patent
Application |
20080103963 |
Kind Code |
A1 |
Mahoney; John F. ; et
al. |
May 1, 2008 |
METHOD AND SYSTEM FOR LOAN ORGANIZATION AND UNDERWRITING
Abstract
A system and method for use by a business entity for loan
origination and underwriting in connection with real estate
investment using a computer implemented application having a
plurality of data input and dialog screens requiring one-time entry
of data. The method includes steps to be followed in any sequence
by one or more users of the business entity for using the system.
The method includes inputting and storing loan origination
information via data input screens, the information including
financial and physical information relating to a specific real
estate investment. The input loan origination information is
dynamically compared with pre-determined rules and a dialog screen
is displayed on a near real-time basis if any of said rules are
violated. The input data is dynamically compared with other rules
for determining the ongoing sequence of data input and dialog
screens. Comparison with other rules results in the calculation of
calculated values and automatically generated dialog text, some of
which is automatically populated 15 in word processing documents,
an automated loan request and a credit application. The system
includes both manual and automatic input of market data
quantitatively describing the real estate market associated with
the property, as well as multimedia data describing the property
and the region surrounding the property. A report representing all
of the stored input and calculated values are automatically
produced in both paper and electronic form suitable for loan
origination and underwriting.
Inventors: |
Mahoney; John F.; (Oakland,
CA) ; Mohen; James M.; (Stamford, CT) |
Correspondence
Address: |
BUCKLEY, MASCHOFF & TALWALKAR, LLC;GENERAL ELECTRIC COMPANY
50 LOCUST AVENUE
NEW CANAAN
CT
06840
US
|
Family ID: |
38607130 |
Appl. No.: |
11/876540 |
Filed: |
October 22, 2007 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
|
|
09475153 |
Dec 30, 1999 |
7287008 |
|
|
11876540 |
Oct 22, 2007 |
|
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Current U.S.
Class: |
705/38 |
Current CPC
Class: |
G06Q 40/02 20130101;
G06Q 50/16 20130101; G06Q 40/00 20130101; G06Q 40/08 20130101; G06Q
40/025 20130101 |
Class at
Publication: |
705/038 |
International
Class: |
G06Q 40/00 20060101
G06Q040/00 |
Claims
1-19. (canceled)
20. A method for facilitating approval of a real estate investment
in a system having a plurality of remote members of a business
entity, each of said plurality of remote members entering data
associated with said real estate investment, the method comprising:
periodically receiving and storing loan origination data from said
plurality of remote members via a plurality of data input screens,
said data including financial and physical data relating to said
real estate investment; automatically comparing the input loan
origination data with first data input rules and if any of said
data input rules are violated, then displaying an information
screen including a text message corresponding to a respective
violated rule; automatically comparing the loan origination data
with second pre-determined rules and, based on results of the
comparison with said second pre-determined rules, dynamically
determining a set of data input and dialog screens; automatically
comparing the loan origination data with third pre-determined rules
and based on results of the comparison with said third
pre-determined rules dynamically calculating at least one or more
profitability values, said third pre-determined rules including at
least one of a debt model and an equity financial model; inputting
and storing user comments from at least a second one of said
plurality of remote users via at least one of said data input
screens; presenting said user comments, said stored loan
origination data, and said at least one or more calculated values
to at least one of said remote members for approval; and generating
at least one loan origination and underwriting report, said report
including said stored loan origination data and said at least one
or more profitability values.
21. A method for facilitating approval of a real estate investment
using a computer implemented application connected to a spreadsheet
application, said computer implemented application having a
plurality of data input and information screens accessible by a
plurality of remote members of a business entity, each of said
plurality of remote members entering data associated with said real
estate investment, the method comprising: periodically receiving
and storing loan origination data from at least one of said
plurality of remote members via said data input screens, said data
including financial and physical data relating to said real estate
investment; automatically comparing the input loan origination data
with first data input rules and if any of said input rules are
violated, then displaying an information screen including a text
message corresponding to a respective violated rule; automatically
comparing the loan origination data with second pre-determined
rules and based on results of the comparison with said second
pre-determined rules dynamically determining a set of data input
and dialog screens; automatically comparing the input loan
origination data with third pre-determined rules and based on
results of the comparison with said third pre-determined rules
dynamically calculating at least one of: one or more profitability
values, said third predetermined rules including at least one of a
debt model and an equity financial model, at least one of said
calculated values displayed on said set of data input screens;
auto-populating fields of input screens and information screens
with at least one of previously entered data and calculated values;
inputting and storing market data, said market data describing the
real estate market associated with the real estate investment;
presenting said loan origination data, said calculated values, and
said market data to at least one of said members for approval; and
generating at least one loan origination and underwriting report
including the stored loan origination data, the stored market data,
and the profitability values.
Description
BACKGROUND OF THE INVENTION
[0001] The present invention relates generally to the documentation
and evaluation of real estate investments, and more particularly,
to automated real estate loan origination and underwriting
processes from initial customer contact to commitment.
[0002] Methods for documentation and evaluation of real estate loan
applications are well known in the investment industry, however,
the specific sequence of steps directed toward preparation of the
substantial necessary documentation and chosen method of analysis
of the financial parameters are a matter of choice. For commercial
and industrial real estate investment, the volume of supporting
documentation and analysis is substantial, as are the dollar
amounts and investment risk. Furthermore, consistency of such
procedures and expeditious processing is important. To this end,
proprietary computer applications have been developed by individual
business entities, which automate individual aspects of the loan
preparation, evaluation and authorization process.
[0003] In some cases, investment deals are compiled by business
entity personnel who may be geographically distant from the central
office, and possibly philosophically distant from the entity's
investment policy and standards. Equally important, is early
scrutiny of certain deal parameters against threshold parameters
which serve to exclude potential real estate deals that fall
outside the interests of the business entity. Consequently, the
cost of compiling pertinent data and executing an appropriate and
effective analysis of the data is an important factor. This is
especially true for a business entity that conducts such
transactions on a routine basis.
[0004] Computer applications directed toward compiling information
about real estate property are known. For example, U.S. Pat. No.
5,794,216 describes an application program executed by a computer
that includes a database containing multimedia information for each
property, including images of the property, and database-stored
parameters corresponding to portions of the image. The multimedia
information includes market data and images of the property and
neighboring circumstances.
[0005] Computer applications directed toward evaluating real estate
are also known. For example, U.S. Pat. No. 5,680,305 describes a
computer application that provides a method for evaluating real
estate for use by a business entity. The application provides for
storage of property description data, usage data, such as rental
financial history, and other factors. A numerical "utilization
indicator" is determined from these parameters, and after further
processing, a "score" is developed, which represents a quantitative
evaluation of the real estate property.
[0006] U.S. Pat. No. 5,966,699 describes a method for conducting
electronic auctions of loan applications. In this method, a
computer system connected to the Internet or other network
electronically communicates "electronic" loan application forms
from a prospective borrower to a loan authorizer, who maintains
viable applications in a database, for subsequent electronic
communication to one or more loan institutions for quotations.
[0007] Therefore, a data acquisition computer program is required
for compiling loan origination information including financial and
physical information relating to a specific property and multimedia
real estate market information associated with the property,
together with a credit request and 20 loan application. The
architecture of the computer program needs to be configured so as
to provide consistency of processing among a variety of potential
users through use of embedded choices, rules and financial models.
The application should require only one-time entry of data in a
non-linear sequence of data input screens, and should auto-populate
documents with input data and generated values wherever
appropriate. The system should be capable of electronically
communicating loan documents to business entity personnel at any
point during the document preparation process.
BRIEF SUMMARY OF THE INVENTION
[0008] The system and method according to the present invention
employs a tool in the form of a personal computer application that
automates the real estate loan origination and underwriting process
for use by a business entity. The method of the present invention
includes steps to be followed by one or more members of the
business entity, as well as automated processes within the computer
application. Some of the method steps are optional, and
advantageously, all of the steps can be followed in any
sequence.
[0009] While any of the steps of the method could be taken first,
logically, and for purposes of description, the first described
step of the method of the present invention is the step of storing
in the computer application the basics of the real estate loan
application, or "deal", including property location, property
metrics, estimated risks, loan terms and other loan and borrower
details, by input of such values on one or more input screens. The
next series of steps include data entry into a number of subsequent
screens, in any order. Some of the subsequent screens test data
inputs against pre-stored rules and based on the results of the
tests, display information and commentary. The pre-stored rules are
defined according to underwriting and pricing guidelines acceptable
to the business entity. Other screens auto-populate certain fields
with calculated results obtained by analysis of debt and equity
data, using known financial models.
[0010] The system makes available to the user a set of computer
screens presented in a generally non-linear sequence. The
particular sequence of presentation is arranged to be under user
control while at the same time, the sequence is also responsive on
a real-time basis to the input data. In this way, the sequence of
screens displayed for any given deal dynamically vary, depending on
data entry.
[0011] Advantageously, in another step of the method, the system
makes available to the user word processing-based documents, such
as a loan application and credit request, which have been
pre-formatted and auto-populated by the system with both input data
and calculated data. In the preferred embodiment, the user
initiates a one-way link (accomplished automatically by system
utilization of known Windows-based, dynamic links) between the
application and the word processing application present on the same
computer as the system of the present invention.
[0012] For example, in the preferred embodiment, a "Key Metrics"
portion arranged to appear within either a credit request or
preliminary loan application is generated, in which selected
financial data, such as profitability values such as investor rate
of return (IRR), return on investment (ROI), net operating income
(NOI), loan structure values, and performance calculations, are
arranged in a standard format. These documents are available for
editing by one or more members of the business entity, for example,
by including paragraphs of text commentary and description. These
documents become part of the overall loan origination package made
available for subsequent evaluation internal to the business entity
and quotation by financial institutions.
[0013] The system takes advantage of intranet and Internet
connectivity to enable collaborative data input and evaluation
among potentially geographically disparate users. Accordingly, in
another optional step of the method, a user can instruct the system
to initiate a network communication with other members of the
business entity regarding a particular loan application.
Optionally, the system can be instructed to copy selected data
screens to a server storage location and automatically populate an
email message with either attached data screens or hyperlinks to
the storage location of the data screens.
[0014] Other steps of the method of the present invention include
accessing the remaining data input screens of the system. It is
expected that an implementation of the present invention includes
screens tailored to the needs of the business entity, and therefore
specific screens and screen contents will vary, depending on the
needs and preferences of the business entity. As a non-limiting
example, additional screens include a "Loan" screen for input of
loan-related data, a "Cash Flow/Evaluation" screen, which includes
various income/expense-related sub-screens, a "Deal Recap" screen,
which summarizes the deal, based on all subsisting data, a "Market"
screen which provide for input of the results of an analysis of the
market associated with the property to be financed, and an "Asset"
screen, which provides for input of the physical features of the
property. In some cases, the system provides commentary dynamically
responsive to the input.
[0015] Also included in the preferred embodiment is an "Execution"
screen, which provides for input of subjective information
characterizing the borrower in terms such as, for example, property
experience, market experience, financial wherewithal, and
forecasted reaction to adverse conditions, including specified
types of litigation and criminal activity.
[0016] A "Deal Analysis" screen is included, which dynamically
adjusts to the input data and calculated values, thereby providing
a summary listing of attributes Advantageously, this screen
displays in a single location, the rules/guidelines which have been
activated as a result of data input. Also included are "Loan
Application" and "Credit Request" screens, in which pertinent data
is input and organized into final form for processing. An
"Execution" screen is included, which provides input of subjective
information characterizing the borrower in terms such as, for
example, property experience, market experience, financial
wherewithal, and forecasted reaction to adverse conditions,
including specified types of litigation and criminal activity.
[0017] A work pad screen taking the form of a spreadsheet, is
provided for general use. An "Image" screen is provided, in which
images captured by known Microsoft Windows-based methods, or the
equivalent, can be added, deleted, arranged and reviewed.
Typically, imaged maps and photographs of the site are included as
input to the Image screen.
[0018] The result of operation of the steps of the system and
method of the present invention is the compilation of information
that is input, screened and edited by one or more team members
having expertise pertinent to individual data types. This
compilation includes calculated values obtained by execution of
algorithms, i.e., financial models, that analyze debt and equity
investments. Also included are multimedia files, such as imaged
maps and photographs of the property and surrounding geographic
area. This compilation is automatically arranged in any desirable
output format, including a loan origination package made available
for subsequent evaluation internal to the business entity and, as
desired, quotation by financial institutions. Other automated
outputs are possible, such as, for example, a loan request.
BRIEF DESCRIPTION OF THE DRAWINGS
[0019] FIG. 1 is a simplified block diagram of an overall computing
environment including a computer system 10 of the present
invention;
[0020] FIG. 2 illustrates an example of a "Screen Deal" input
screen for entering basic data, according to the present
invention;
[0021] FIG. 3 illustrates an example "Property Cash Flow" input
screen, according to the present invention;
[0022] FIG. 4 illustrates an example "Loan" input screen, according
to the present invention;
[0023] FIG. 5 illustrates an example "Cash Flow/Valuation" input
screen, according to the present invention;
[0024] FIG. 6 illustrates an example "Deal Recap" input screen,
according to the present invention;
[0025] FIG. 7 illustrates an example "Asset" input screen,
according to the present invention;
[0026] FIG. 8 illustrates an example "Market" input screen,
according to the present invention;
[0027] FIG. 9 illustrates an example "Execution" input screen,
according to the present invention;
[0028] FIG. 10 illustrates and example "Environmental Issues",
input screen according to the present invention;
[0029] FIG. 11 illustrates an example "Deal Analysis" input screen,
according to the present invention;
[0030] FIG. 12 illustrates an example "Loan Application" input
screen, according to the present invention;
[0031] FIG. 13 illustrates an example "Images" input screen,
according to the present invention.
DETAILED DESCRIPTION OF THE INVENTION
[0032] Embodiments of the present invention include a data
acquisition computer program for compiling loan origination
information including financial and physical information relating
to a specific property and the real estate market associated with
the property, together with a credit request and loan application,
other outputs as desired, and steps of a method for using the
program. The architecture of the computer program, or application,
is configured to provide the benefit of consistency of processing
among a variety of potential users, in some cases through ample use
of embedded menus, from which the user makes an informed selection
among fixed choices for a given data field. Rules imbedded within
the application and associated with one or more data input fields
automatically operate to assist the user in compiling a data
conforming to standards and policies of the business entity.
Similarly, use of known fixed financial models, although
optionally, a choice among models can be provided, further
contributes to consistency of loan origination and underwriting.
The application is configured so that specific data entries are
made only once by the user, leaving to the application the task of
populating copies of that input data into other fields, as
necessary.
[0033] Importantly, as a result of the non-linear flow of the data
input screens, input can be made at the convenience of each user,
and is not system-driven. Moreover, emphasis on
network-connectivity among users and interested parties, enables
conveyance of early (partially complete) versions of a particular
compilation of data describing pertinent real estate market
demographics, the physical, financial, and usage data relating to a
specific real estate property, together with loan and credit
applications, collectively referred to as a "deal", to business
entity personnel who, in other loan originating arrangements, might
be the last, or nearly the last to review the deal. Such early
scrutiny has been shown to be very effective in forestalling deals
which fall outside the standards or interests of the business
entity. It has been recognized that input from such individuals
helps to formulate the initial version of the deal and avoid
unnecessary delay resulting from re-writes.
[0034] FIG. 1 is a simplified block diagram of an overall computing
environment including a computer system 10 of the present
invention, including at least one computer 12, which preferably is
a personal computer, and a plurality of computer applications
arranged to operate in computer 12. Computer system 10 is arranged
to cooperatively connect to external data sources 13 over a
network. External sources 13 include data sources arranged to make
data available upon demand over an intranet (14), or the Internet
(15), as applicable. Computer 12 is arranged to operate both
independently of, and connected to, network 14,15, which
optionally, can be an intranet or the Internet. Computer 12 is also
arranged to operate a plurality of applications, including at least
one desktop application 16 directed to loan origination and
underwriting, written in a suitable programming language, such as,
for example, the Delphi (trademark of InPrise Corporation)
programming language, a spreadsheet application 18, such as, for
example, Excel (trademark of Microsoft Corporation), a word
processing application 20, such as, for example, Word (trademark of
Microsoft Corporation), an optional database application 22, such
as, for example, Access (trademark of Microsoft Corporation), an
internet browser application 24, such as, for example Internet
Explorer (trademark of Microsoft Corporation), and other
applications, as appropriate.
[0035] In an alternative embodiment, a database application running
on a central sever is arranged to capture and archive summary
information or file copies for general use within the business
entity, or to facilitate collaboration. Personal computers 11
suitably network-connected to computer 12 enable other members of
the business entity to communicate with the user of computer 12. In
the preferred embodiment, computers 11 and 12 are configured to be
interconnected upon demand, via intranet 14 and also by corporate
LAN/WAN networks (not shown). Such communication includes
electronic mail. Optionally, at least one of personal computers 11
is a server configured and arranged to perform known server
functions, including storage of data files, and operation of
web-related applications for communicating stored data to users via
intranet and internet connections.
[0036] The desktop application 16 is configured and arranged to
include local user input 27, i.e., data entered by a user at the
personal computer on which application 16 is running. Local user
input 27 is verified against a set of pre-determined input rules 21
resident in application 16. Input rules 21 are automatically
activated by application 16 upon data entry by the user, and are
configured to screen input for typographical errors and logical
errors. Remote user input 28, i.e., data communicated over a
suitable network from other business entity personnel is
communicated to the local user generally in the form of email and
optionally, via documents attached to email. The local user
transfers this information, as appropriate, as data input 27 to the
application. Similarly, the local user accesses commercial sources
29 external to the business entity, and initiates data transfer to
application 16.
[0037] A desirable operating system 26 is Windows (trademark of
Microsoft Corporation), OS/2 (trademark of IBM Corporation), or any
such other operating system that supports the use of an extended
memory, a DLL loading function, and a virtual storage, multi-window
GUI environment.
[0038] FIG. 2 illustrates, but not by way of limitation, an example
arrangement of a computer input screen 50 for entering basic data
pertaining to a request for a loan in connection with a specific
real estate property. The example input screen 50 titled "Screen
Deal", is one of a series of input and informational screens
comprising the system 10 of present invention. The data input from
all of these screens is stored in the database application 22
linked to desktop application 16. System 10 includes a
computational program that is configured to perform arithmetic
calculations and comparisons of the input data. The computed
results are also stored in the database application 22. In the
preferred embodiment the database application and computational
program is a commercially available spreadsheet application 18.
[0039] System 10, in the preferred embodiment, is configured and
arranged to automatically populate one or more associated
spreadsheets by way of a data input and display application
including data input screens such as screen 50 and other screens to
be described. Also, informational screens are provided, which
generally reflect calculated results of data entered into the
associated spreadsheet, and may pose summaries, questions or 25
warnings to the user, based on subsisting input data. Return On
Investment (ROI), Internal Rate of Return (IRR) and Net Income are
displayed at the top of every screen, and represent the deal's
(either debt or equity) profitability. These values are constantly
updated as the user provides information into the system. In a
separate embodiment, system 10 also populates selected input 30 and
calculated values into a database associated with a commercially
available database application that is dynamically linked with the
input and display application, and is a part of, system 10.
[0040] Screen Deal input screen 50 includes several features that
advantageously appear on all screens of the present invention.
Generally, included is a display of any set of icons, which, upon
user selection using known Windows techniques, direct system 10 to
display a corresponding, respective screen. For example, in the
preferred embodiment, button icon channels 52, called "channels"
for convenience, are displayed on the left side of screen 50, which
direct system 10 to display screens corresponding to each major
screen or suite of screens, described below. As a result, the user
can conveniently navigate randomly from any particular screen to
any other screen by known Windows navigation techniques.
[0041] Additional features in common with all screens of system 10
include functional pull-down menus 54, which also are a known
feature of Windows applications. These pull-down menus are
screen-specific and offer functionality tailored to the currently
displayed screen. For example, in the preferred embodiment, the
pull-down menus labeled "File", "Edit", "Online", "Activities", and
"Help", appear at the top of screen 50.
[0042] Other features in common with all screens of system 10
include guideline warnings representing rule violations, which are
displayed throughout the application, as well as being summarized
in a "Deal Analysis" channel. Guideline warnings are displayed as
appropriate, based on system logic, which responds to both input
data as well as calculated values.
[0043] The screens of system 10 optionally are suites of screens
corresponding to the channels 52. For a given channel, a
corresponding suite of screens are identified by tab icons 56 near
the top of the input area of each screen. These tabs enable the
user to switch among members of the suite. Any set of input or
informational screens sufficient to display pertinent fields can be
included. For example, in the preferred embodiment, Screen Deal
suite of screens 50 includes "General Information", "Programs" and
"Property Cash Flow" tabs and corresponding screens, described
below. Inclusion of such screens in the design of the system 10 is
based both on the need for input data, as well as providing
direction to the system, based on the data input. For example, in
the preferred embodiment, the "Programs" tab provides a screen that
offers a selection of programs to the user, each program being
arranged to employ a respective financial model to be used for debt
and equity analysis. Moreover, the content and availability of
other screens is dynamically determined according to specific data
entered on any given screen, as described further, below. This
process comprises automatic application of a set of pre-determined
rules 23, stored within application 16, as data fields are
entered.
[0044] FIG. 2 also shows an example "General Information" screen
51, indicated by a tab 58 of the same name. This screen includes
data input fields labeled according to the data type intended for
input. Each field is connected to an associated spreadsheet and the
input data is made available for subsequent computation, as
described below. Specific computations are effected by application
of pre-determined computation rules 25, which are part of
application 16. Although screen 50 can include any number of
appropriate input fields describing the property, risk, and loan
terms, as understood in the loan origination industry, the
preferred embodiment includes general information fields 59
describing the Property Location, Property Type, metrics such as
Size and Year Built. For example, one selection of
industry-standard input fields relating to risk 60 includes
Estimated Risk Values, including Asset Risk, Market Risk, and
Execution Risk. Still other input fields relating to loan terms 61,
including requested loan amount, requested term, interest rate
type, loan purpose, and purchase price, input fields relating to
borrower cash and capital needs. Screen 50 is arranged to display a
Calculated Overall Risk Value 63 based on the estimated risk values
61. Any field, such as "Loan Purpose" 57, can have an associated
pull-down menu of choices, the selection of which results in
auto-population of the corresponding input field. Advantageously,
restriction to a selection from a fixed menu of choices achieves
consistency among users.
[0045] FIG. 3 illustrates an example "Property Cash Flow"
arrangement 62, obtained when the user selects tab 64 labeled
"Property Cash Flow" from tabs 56 located near the top of Screen
Deal 50. In the preferred embodiment, inputs made to screen
arrangement 62 are incorporated into calculations made by an
attached spreadsheet. Icon buttons 70 revealing pop-up worksheets
such as, for example, "Average Economic Occupancy Growth", "Rental
Growth" and "Other Growth" are located adjacent pertinent input
fields on screen 62, so that tabular input of growth data
corresponding to, for example, six years of experience, can be
entered by the user onto respective worksheets, calculated and
returned as a calculated result, which is available for manual or
optionally, automatic input into the appropriate field in screen
62. In addition, other economics data input fields 71 include a
"Effective Gross Income" value, a "Net Operating Income" value and
a "Cash Flow After Reserves" value. In addition, detailed operating
expense input fields 72 and tenant improvement costs and leasing
commission values are input in screen 62. Advantageously, a tenant
improvement and leasing commission 5 calculator is provided in the
form of a pop-up window for the convenience of the user. This
calculator provides a window formatted to receive this data, and
calculates sums of the data input. Provision is made for input of
multiple years of expense values, which are made available for
subsequent computation and display, as necessary.
[0046] FIG. 3 also includes a "Programs" tab 73, the selection of
which instructs system 10 to display a screen (not shown) including
selectable program options. In instances in which the business
entity uses more than one "program" of threshold values for
selected parameters, thus screen offers a selection button
associated with each program option. Preferably, the choice of
options that are displayed is dynamically dependent on subsisting
data entered into the application. The user selection of a program
results in a respective arrangement of automatically populated
values into all pertinent data fields. Each program of thresholds
and associated preferences are determined by the business
entity.
[0047] FIG. 4 illustrates an example suite of loan screens which
are obtained through user selection of icon button channel 74,
labeled "Loans", from channels 52, which are visible on every
screen presented by system 10. In the preferred embodiment,
selection of "Loan" button 74 instructs system 10 to display the
first of the suite of screens, each titled "Loans", wherein each
screen is further identified by a tab including a descriptive
sub-title. User selection of the "General Terms" tab 75 instructs
system 10 to display the corresponding screen. Optionally, other
tabs, which can be selected in any order, indicating additional
screens related to "loans", are displayed near the top of the
screen
[0048] Advantageously, if the deal is an equity deal, as determined
by selection of "Equity Deal Type" on the General Information
screen of the Screen Deal suite of screens, then the suite of loan
screens is replaced with a Deal Structure suite of screens (not
shown). Deal Structure screens include data input fields
characteristic of equity deal types, and are comparable to the 35
suite of loan screens. In addition, the Loan Application and Credit
Request suites of screens are also changed to be reflective of the
information/structure needs of an equity transaction.
[0049] In the preferred embodiment, with the general terms screen
75 displayed, the user can select from pull-down menus options for
"Lien Position" 76, which includes, for example, selectable fields
labeled "First" or "Second Mortgage" or "Equity/Joint Venture".
Advantageously, this fixed assortment of options results in
consistent processing by multiple users. Input for "Loan Term" is
provided. The user can also select from fixed menu options the
"Loan Purpose" 77, such as "Acquisition", "Refinance" and 10
"Construction", as appropriate. Other input fields including
"Amortization Schedule" and "Participation" 78, which includes
input fields for "% of Cash Flow", % of Residual", and "Minimum
Residual Participation". "Origination and Prepayment Fees and
"Rate" input fields 79 and "Prepayment Options" fields 80,
including parameters known in the loan origination industry.
[0050] In one embodiment, the suite of "Loans" screens represented
by the General Terms screen 75, optionally includes other screens
(not shown), each accessed by a tab. For example, in FIG. 4, a
"Sources" screen is displayed in which system 10 populates the
screen with summary information relating to funding "sources" and
corresponding "uses", in balance-sheet format. Other screens can
provide input fields for borrower cash equity, additional
collateral, and earnout, as well as input fields relating to senior
debt and annual debt service.
[0051] FIG. 5 illustrates an example Cash Flow/Valuation suite of
screens, with the "Valuation" screen 81 displayed. "Valuation"
screen 81 provides input fields for "Direct Capitalization" values
82, "Discounted Cash Flow" 83, and "Sales Comparables" 84. The
default calculations for these values consist of a mixture of user
inputs and values driven by the system logic of system 10. The user
has the discretion of overriding both the input and the calculated
values, should specific circumstances of the deal so 30 dictate. In
the preferred embodiment, in general, data fields associated with
capital funding are auto-populated from other inputs to other
screens. A "Percent Direct Capital" input field 85 is provided. A
pull-down menu of calculation method selections 86 including
"Average/Current Proforma NOI", "Current NOI", and "Proforma NOI".
In addition, text fields 86 are available for entry of user
comments.
[0052] FIG. 5 also shows other tabs representing additional screens
included in the suite of Cash Flow/Valuation suite of screens 81,
including tabs 87 labeled "Income By Year", "Expense By Year", and
"Capital Expenditures By Year". These screens include data input
fields known in the loan origination industry, for example, "Income
By Year" includes, for example, net rental income, expense
recoveries and other income fields. The remaining screens of the
suite include similar known inputs for expense and capital
expenditures. Advantageously, in the preferred embodiment, pop-up
worksheet screens are available to tally a number of years-average
economic opportunity, and various types of income growth, as
necessary. The number of years presented dynamically changes based
on the loan term. In addition, system 10 trends forward the data
input on the Screen Deal--Property Cash Flow screen, based on the
growth rates previously assigned by the user.
[0053] FIG. 6 illustrates an example Deal Recap suite of screens,
with the deal recap screen 90 displayed. Screen 90 provides an
informational display of a "Deal Overview" 91 of the deal in terms
of selected values of interest to the business entity. Any selected
values can be displayed according to preferences of the business
entity. For example, in addition to size and commitment amount,
specific calculated underwriting values are displayed. Pricing
values are displayed along with return values, including, for
example, ROI, net income and IIR. Optionally, the details of these
return values and other associated values, as identified by the
business entity, are displayed in one or more additional
informational screens.
[0054] FIG. 7 illustrates an example suite of "Asset" screens which
are obtained through user selection of icon channel 95, labeled
"Asset", from icon button channels 52. In the preferred embodiment,
selection of "Asset" channel 95 instructs system 10 to display the
"Characteristics" screen 96, indicated by an icon tab of the same
name, displayed near the top of the screen. Assets screen 96
includes asset "Description" fields 97, which include pertinent
data fields known in the loan origination industry. Optionally,
other input screens providing input fields for additional
asset-related fields can be provided as necessary, and identified
by selectable icon tabs.
[0055] FIG. 8 illustrates an example suite of "Market" screens
which are obtained through user selection of channel 100, labeled
"Markets", from icon button channels 52. In the preferred
embodiment, selection of "Market" channel 100 instructs system 10
to display a market demand screen 101 labeled "MSA Demand", which
is one of several metropolitan statistical area analysis screens.
These screens can be configured to display any number of data input
fields pertinent to characterizing market demand. In the preferred
embodiment, screen 101, as shown in FIG. 9, is arranged in a grid
format, in which at the left side is a list of market descriptors
102, and across the top of the grid are column titles 103
indicating degrees of risk, including, for example, "less
risky--1", "2", "3", `A", "5--more risky", and "not selected". The
user optionally selects, for each listed market descriptor, an icon
button from the appropriate column of degrees of risk button icons.
A check-mark icon appears as overlaying each selected button.
Advantageously, for each position of the Windows pointing device
over a button icon, an information window 104 dynamically changes
to display both definitions and experience-based information for
that particular combination of risk and market descriptor.
[0056] In the preferred embodiment, the market demand screen 101
includes market descriptors such as, for example, number of jobs,
employment growth, employment volatility, job diversity, population
growth, demographic diversity, business environment, cost of
services, defense employment exposure, single employer risk, single
industry risk, infrastructure, size of skilled workforce, quality
of life.
[0057] Also in the preferred embodiment, the market demand screen
101 includes "User Selected Market Risk" field 105, which is
auto-populated by system 10 with a value developed from previously
entered numeric risk data, and a "Calculated Market Risk Rating"
field, which is auto-populated by a calculated sum representing the
above-described, subjective data indicated by checked grid buttons.
Optionally, guideline warnings characterizing the disparity between
these two risk rating values are auto-populated in a word
processing document. A user, who edits such a document, would
thereby have the opportunity to further expand on the reasons
surrounding the difference in risk assessment.
[0058] Another metropolitan statistical area (MSA) analysis screen
titled, for example, "MSA Supply", (not shown) includes market
descriptors such as, for example, metropolitan statistical area
total inventory, metropolitan statistical area total inventory
trend, metropolitan statistical area total inventory condition,
metropolitan statistical area occupancy, metropolitan statistical
area absorption per year, and metropolitan statistical area growth
constraints.
[0059] Still another metropolitan statistical area titled, for
example "Sub market Demand & Supply", (not shown) includes
market descriptors such as, for example, overall metropolitan
statistical area demand, overall metropolitan statistical area
supply, overall submarket demand, overall submarket supply.
[0060] FIG. 9 illustrates an example suite of "Execution" screens
200 which are obtained through user selection of channel 201,
labeled "Execution", from icon button channels 52. User selection
of icon tab 202, labeled "Borrower" instructs system 10 to display
a "Borrower" screen 201, which includes data input fields 203 which
answer the question, "Does the Borrower have the experience to
execute the business plan?". These fields include borrower name,
general real estate experience in years, property type experience
in years, local market experience in years and number of similar
properties owned. Input field grouping 204 includes input fields
are intended to answer the question, "Does the Borrower have the
financial wherewithal to perform?", including net worth, liquid
assets and empire risks, which includes user-selectable options,
including operating shortfalls, highly leveraged, contingent
liabilities, and difficulty with lenders.
[0061] A third borrower grouping of input fields 205 are intended
to answer the question "How do we expect the Borrower to behave in
bad times on their history?" These fields include check-mark icon
entries for criminal activity, various civil litigation-related
actions, and history with the business entity. Similar questions in
connection with the tenant(s) can be provided.
[0062] FIG. 10 illustrates another input screen 66 titled
"Environmental Issues" of the Execution suite of screens 200.
Screen 66 lists pre-determined environmental issues 67 arranged as
the vertical component of a grid pattern. Across the top of the
grid pattern are displayed five column headings 68, for example,
"Not Present", "Green", "Yellow", "Red", and "Not Selected",
although any suitable set of headings will suffice. Arranged within
the grid, beneath the column headings, are icon buttons 69, which
the user selects according to a judgement of the degree of presence
of a respective environmental item. Each selection results in the
display of an icon checkmark, and mere location of the Windows
cursor results in the appearance of explanatory commentary in an
information window 55. Included also, is a text-input window, made
available for the user to add comments.
[0063] FIG. 11 illustrates an example of a deal analysis screen
210, which is obtained through user selection of channel 201,
labeled "Deal Analysis", from icon button channels 52. Deal
Analysis screen 201 is an informational screen displaying a list
202 of all guideline/rule warnings responsive to data input
to-date. This list is a dynamic list drawn from a library of text
descriptors each of which characterizes a specific aspect of the
deal. For any given deal, the list automatically reflects an
analysis of the numeric input data, the system-calculated values,
and the non-numeric characterization inputs, e.g. the risk analysis
described in connection with other input screens. Advantageously, a
display of explanatory text appears in a window 203, when the user
selects each listed characterization. Where appropriate, the text
includes context-sensitive data (pertinent to the current deal)
embedded within the explanatory text. A questions window 204 is
provided, also corresponding to each listed characterization, in
which system 10 displays key questions dynamically based on data
provided in other input 20 screens.
[0064] FIG. 12 illustrates an example suite of loan application
screens 208 which are obtained through user selection of channel
209, labeled "Loan Application", from icon button channels 52. The
Loan Application channel 52 instructs system 10 to display the
"Borrower Information" screen 210. Screen 210 includes data fields
211 identifying the borrower, including name, address, entity type,
state of organization, along with fields identifying controlling
principal(s), and indemnitors. Most, and potentially all of these
fields are auto-populated by system 10, using previously input
data. This will depend, of course, on the sequence of input screen
selection, and completeness of data entry, as of the selection of
the Loan Application channel 209. Other screens (not shown)
optionally included in the Loan Application suite 208 display all
information known in the loan origination industry as necessary for
comprising a complete loan application. Specific requirements may
vary and are typically defined by the business entity. For example,
Loan Application screen 210 shows exemplary tabs respectively
titled "Property Information" 212, "Basic Loan Terms" 213, "Source
and Uses" 214 and "Other Terms" 215, as indicative of such
information screens. The data fields of Loan Application screen
suite 208 are used by system 10 to automatically generate a loan
application suitable for printing or electronic transmission to a
loan underwriting entity.
[0065] As indicated in connection with FIG. 4, which illustrates a
suite of loan screens, if the deal type is a debt deal, then the
suite of loan application screens shown in FIG. 12 are displayed.
If the deal type is an equity deal, as determined by selection of
"Equity Deal Type` on the General Information screen of the Screen
Deal suite of screens, then the suite of loan application screens
208 is replaced by a suite Credit Request screens which reflect the
information/structural requirements of an equity transaction.
[0066] FIG. 12 shows channel 220, labeled "Credit Request" among
icon button channels 52, the selection of which instructs system 10
to display a suite of "Credit Request` screens (not shown). The
Credit Request screens include the same information display fields
as described in connection with "Loan Application" screen suite
208. Potentially all of these fields are auto-populated by system
10, using previously input data, depending on prior completeness of
data input. The data fields of Credit Request screens associated
with the Credit Request channel 220 are used by system 10 to
automatically generate a credit request suitable for printing or
electronic transmission to a credit approval entity.
[0067] FIG. 12 also shows, selection of a channel labeled "Work
Pad" 222 provides to the user a screen having basic spreadsheet
capability, for use as a convenient calculator for incidental
calculation.
[0068] FIG. 13 illustrates a channel 224 labeled "Images", which
upon user selection, enables the user to add, insert, and delete
images, by selection of buttons 225, 226 and 227, respectively.
After images are input and arranged in desired sequence, the user
can instruct system 10 to sequentially display the images by
selecting navigation keys 232. These images are also moved by
system 10 to either the Preliminary or Credit Request word
processing documents along with the other deal-related
information.
[0069] Referring to any of FIGS. 2-13, a set of menu choices are
displayed at the top of each screen, including standard Windows
choices such as "File", "Edit" and "Help". In the preferred
embodiment, other functionality is also included in the form of
menu choices. For example, a menu choice is configured to provide a
view of deals grouped by category, such as geographic region,
state, or product type (apartment, commercial, etc.). Optionally,
system 10 calculates a comparison of any of a group of data fields
of interest to the business entity (currently these are "canned
reports).
[0070] Advantageously, a copy of the deal recap screen 90,
illustrated in FIG. 6, is made available on one or more networks,
according to the needs of the business entity. Preferably, the copy
of screen 90 is made available on the business entity intranet. The
copy of screen 90 is created automatically when a user saves for
the first time and is then automatically updated on each subsequent
save. This functionality requires that the user be connected to the
network, for example, an intranet, at the time that the save
occurs, and does not require that the user select or otherwise
identify or copy the screens. As an automatic function, system 10
copies one or more deal files, for example, the financial model
file, the Loan Application file, and the Credit Request file, from
the user's hard drive, stores them in a server database in a
packaged form suitable for transmission and display over an
intranet or optionally, the Internet. The user, through menu
selection, instructs the system 10 to automatically populate an
email message including a hyperlink to the selected screens, and to
automatically send the message to one or more addressees indicated
by the user.
[0071] Another optional menu choice is a tracking function, which
enables the user to view all posted documents. All data which has
been changed over the initial input is graphically highlighted, so
that a viewer is able to view the change history by clicking on the
data. This information becomes visible in a pop-up window because
the data is tagged with at least the revised data author's name,
date and time, and old and new value.
[0072] Still other optional menu choices include direct links to
web pages providing commercially available market research data and
financial reporting data, such as Dunn & Bradstreet (registered
trademark). If the user has already provided the postal ZIP Code to
system 10, as part of the property description, such links will
automatically route system 10 to data pertinent to the deal.
[0073] Similarly, links to commercial map sources, including
orbital images as well as area street maps and aerial photographs
are accessed the same way. Copies of such information are obtained
by known Windows editing methods.
* * * * *