US 4,953,085 A · System for the operation of a financial account

Abstract

A personal financial management program is disclosed incorporating means of implementing, coordinating, supervising, analyzing and reporting upon investments in an array of asset accounts and credit facilities within a client account. Through a mathematical programming function the client specifies his financial objectives, his risk preference, forecast of economic and financial variables, and budgetary constraints. The mathematical programming function suggests to the client a portfolio of investment and credit facilities to best realize his financial objectives over a defined time horizon. In the preferred embodiment the central structural element of the financial account is a mortgage secured by the client's home and one or more asset accounts. Client funds that would normally be used to amortize the mortgage may be alternatively used to increase the value of a designated asset account. The client account is imbalanced if the client's borrowing power is less than the minimum borrowing power specified by the financial institution. If the account is imbalanced, the client may reallocate the distribution of assets and liabilities within the client account and/or modify a set of constraints on the client account. If the client account is still not balanced after modification of the account, the system initiates a liquidation procedure.

Claims33

Dependent claims

A method for operating a client account, said client account comprising a plurality of sub-accounts including ate least one type of asset and one type of liability, said method comprising the steps of:

(a) establishing for each type of asset a loan to value ratio;
(b) establishing a minimum borrowing power for said client account;
(c) calculating a borrowing power for said client account by calculating for each asset an asset loan value equal to the product of an asset value and a loan to value ratio, summing such asset loan values and deducting all liabilities;
(d) comparing the calculated borrowing power with the minimum borrowing power;
(e) indicating an account imbalance has occurred if the calculated borrowing power for the client account is less than the minimum borrowing power;
(f) if an account imbalance has occurred, modifying the client account to correct the account imbalance;
(g) recalculating the client account's borrowing power as in paragraph (c) after modifying the client account;
(h) comparing the recalculated borrowing power to the minimum borrowing power;
(i) indicating that the account imbalance cannot be corrected if the recalculated borrowing power is less than the minimum borrowing power;
and
(j) liquidating the assets and satisfying the liabilities if the account imbalance cannot be corrected.

8 more elements

A method for operating a client account, said client account comprising a plurality of sub-accounts including at least one type of asset and one type of liability, said method comprising the steps of:

(a) establishing for each type of asset a loan to value ratio;
(b) establishing a minimum borrowing power for said client account;
(c) calculating a borrowing power for said client account by calculating for each asset an asset loan value equal to the product of an asset value and a loan to value ratio, summing such asset loan values and deducting all liabilities;
(d) comparing the calculated borrowing power with the minimum borrowing power;
(e) indicating an account imbalance has occurred if the calculated borrowing power for the client account is less than the minimum borrowing power;
(f) if an account imbalance has occurred, modifying the client account to correct the account imbalance;
(g) recalculating the client account's borrowing power as in paragraph (c) after modifying the client account;
(h) comparing the recalculated borrowing power to the minimum borrowing power;
(i) indicating that the account imbalance cannot be corrected if the recalculated borrowing power is less than the minimum borrowing power;
(j) calculating for the client account an expected future borrowing power by calculating for each asset an expected asset loan value equal to the product of an asset value and a loan to value ratio expected at a specified time in the future, summing such expected asset loan values and deducting all liabilities;
(k) comparing said expected future borrowing power to a minimum expected future borrowing power;
(l) indicating an expected future imbalance if said expected future borrowing power is less than the minimum expected future borrowing power;
(m) modifying the client account to correct the expected future account imbalance if an expected future account imbalance is indicated;
(n) after modifying the client account to correct the expected future account imbalance, recalculating the client account's borrowing power so as to produce an updated client account's borrowing power and recalculating the client account's expected future borrowing power so as to produce an updated client account's expected future borrowing power;
(o) comparing the updated client account's borrowing power to the minimum borrowing power;
(p) comparing the updated client account's expected future borrowing power to the minimum expected future borrowing power;
(q) indicating that the expected future account imbalance cannot be corrected if the updated client account's borrowing power is less than the minimum borrowing power on the updated client account's expected future borrowing power is less than the minimum expected future borrowing power;
and
(r) liquidating the assets and satisfying the liabilities if the expected future account imbalance cannot be corrected.

16 more elements

A method for operating a client's home mortgage account comprising the steps of:

(a) securing a liability with a mortgage on at least one home and one or more asset accounts;
(b) allocating funds received in mortgage payments to pay interest on the mortgage with at least a portion of the remainder of funds received being used to increase an asset account rather than amortize the mortgage;
(c) calculating a borrowing power for the client's home mortgage account by calculating for each asset account an asset loan value equal to the product of an asset account value and a loan to value ratio, calculating for each home a home loan value equal to the product of a value of the home and a home loan to value ratio, summing all said asset loan values and home loan value(s) and deducting from said sum any mortgage balance and all other liabilities that are part of the home mortgage account;
(d) establishing a minimum borrowing power;
(e) comparing the calculated client account's borrowing power with the minimum borrowing power;
(f) indicating an account imbalance has occurred if the client account's borrowing power is less than the minimum borrowing power;
(g) modifying the account to correct the account imbalance if such an account imbalance has occurred;
(h) recalculating the borrowing power for the client's home mortgage account as in paragraph (c) after modifying the client account;
(i) comparing the recalculated borrowing power to the minimum borrowing power;
(j) indicating that the account imbalance cannot be corrected if the recalculated borrowing power is less than the minimum borrowing power;
and
(k) liquidating assets in one or more asset accounts to decrease the liability secured by the mortgage if the account imbalance cannot be corrected.

9 more elements

A method for operating a client's home mortgage account comprising the steps of:

(a) securing a liability with a mortgage on at least one home and one or more asset accounts;
(b) allocating funds received in mortgage payments to pay interest on the mortgage with at least a portion of the remainder of funds received being used to increase an asset account rather than amortize the mortgage;
(c) calculating a borrowing power for the client's home mortgage account by calculating for each asset account an asset loan value equal to the product of an asset account value and a loan to value ratio, calculating for each home a home loan value equal to the product of a value of the home and a home loan to value ratio, summing all said asset loan values and home loan value and deducting from said sum any mortgage balance and all other liabilities that are part of the home mortgage account;
(d) establishing a minimum borrowing power;
(e) comparing the calculated client account's borrowing power with the minimum borrowing power;
(f) indicating an account imbalance has occurred if the client account's borrowing power is less than the minimum borrowing power;
(g) modifying the account to correct the account imbalance if such an account imbalance has occurred;
(h) recalculating the borrowing power for the client's home mortgage account as in paragraph (c) after modifying the client account;
(i) comparing the recalculated borrowing power to the minimum borrowing power;
(j) indicating that the account imbalance cannot be corrected if the recalculated borrowing power is less than the minimum borrowing power;
(k) calculating an expected future borrowing power for the client's home mortgage account by calculating for each asset an expected asset loan value equal to the product of an asset value and a loan to value ratio expected at a specified time in the future, calculating for each home an expected home loan value equal to the product of a value of the home and a home loan to value ratio expected at said specified time in the future, summing such expected asset loan values and deducting all liabilities;
(l) comparing said expected future borrowing power to a minimum expected future borrowing power;
(m) indicating an expected future imbalance if the expected future borrowing power is less than the minimum expected future borrowing power;
(n) modifying the home mortgage account to correct the expected future account imbalance if a future account imbalance is indicated;
(o) after modifying the home mortgage account to correct the expected future account imbalance, recalculating the borrowing power for the home mortgage account so as to produce an updated borrowing power for the home mortgage account and recalculating the expected future borrowing power so as to produce an updated expected future borrowing power for the home mortgage account;
(p) comparing the updated client account's borrowing power to the minimum borrowing power;
(q) comparing the updated expected future borrowing power to the minimum expected future borrowing power;
(r) indicating that the expected future account imbalance cannot be corrected if the updated client account's borrowing power is less than the minimum borrowing power or the updated client account's expected future borrowing power is less than the minimum expected future borrowing power;
and
(s) liquidating the assets to decrease the mortgage if the expected future account imbalance cannot be corrected.

17 more elements

(a) designating one or more financial variables that represent a client's financial objectives;
(b) establishing for each type of asset a loan to value ratio;
(c) specifying a minimum borrowing power;
(d) designating a set of constraints on the client account and sub-accounts;
(e) calculating a borrowing power for each client account by calculating for each asset an asset loan value equal to the product of the asset value and a loan to value ratio, summing such asset loan values and deducting all liabilities;
(f) implementing a mathematical programming function to generate an optimal financial solution pursuant to the client's financial objectives and set of constraints, said financial solution indicating the optimum combination of assets and liabilities and a priority of acquisition and liquidation of said assets and liabilities such that a client account's borrowing power is at least equal to said minimum borrowing power specified by the financial institution;
(g) when a change occurs in at least one sub-account, recalculating the client's borrowing power as in paragraph (e);
(h) comparing the recalculated borrowing power with the minimum borrowing power;
(i) indicating an account imbalance has occurred if the client account's borrowing power is less than the minimum borrowing power;
(j) if an account imbalance has occurred, modifying the client account to correct the account imbalance;
(k) recalculating the client account's borrowing power after modifying the client account;
(l) comparing the recalculated borrowing power to the minimum borrowing power;
(m) indicating that the account imbalance cannot be corrected if the recalculated borrowing power is less than the minimum borrowing power;
and
(n) liquidating the client account if the account imbalance cannot be corrected.

12 more elements

Dependencies are inferred from the claim text.

System for the operation of a financial account

Life of this patent

System for the operation of a financial account

Life of this patent

Abstract

Claims33