Method and apparatus for determining an optimal investment plan for distressed residential real estate loans

An apparatus for selecting a business plan for nonperforming real estate loans comprising:

• (a) means for receiving loan data including personal data relating to a borrower, financial information relating to the borrower's financial position, an unpaid loan amount, and loan conditions including a loan term, a loan amount, and an interest rate, relating to a real estate;
• (b) means for analyzing the borrower's financial information to determine an ability-to-pay rate reflecting an interest rate indicating the borrower's ability to repay a loan having the loan conditions;
• (c) means for comparing the ability-to-pay rate and the interest rate of the loan conditions to determine whether the borrower can repay the unpaid loan amount;
• (d) means for generating a repayment plan reflecting the ability to pay rate and the loan conditions if the comparison indicates that the borrow can repay the unpaid loan amount.

A method for determining acceptable interest rates for real estate loans comprising the steps, performed by a processor, of:

• (a) receiving loan data, including personal data relating to a borrower, financial information relating to the borrower's financial position, and loan conditions including a loan term, information on the corresponding real estate, a loan amount, and a loan rate, related to a real estate loan;
• (b) analyzing the borrower's financial information to determine an ability-to-pay rate reflecting an interest rate on the loan reflecting the borrower's ability to repay a loan having the loan conditions;
• (c) determining from the loan data a default rate reflecting an interest rate realizable if the loan is foreclosed and a new loan secured by the real estate originated;
• (d) determining from the received loan data a minimum rate reflecting an interest rate realizable if proceeds from a sale of the real estate before expiration of the loan term are determined to be acceptable and a new loan secured by the real estate originated;
• (e) generating a comparison model from the borrower's financial information, the comparison model including the ability-to-pay rate, the default rate, and the minimum rate;
• (f) analyzing the comparison model to determine a relationship among the ability-to-pay rate, the default rate, the minimum rate, and a predetermined current return rate;
• (g) extracting lender preferences from a constraints database;
• (h) selecting an acceptable return rate for the loan based on the relationship, the lender preferences, and the personal data;
• and
• (i) modifying the loan conditions to provide the acceptable return rate.

An apparatus for determining acceptable interest rates for real estate loans comprising:

• (a) means for receiving loan data, including personal data relating to a borrower, financial information relating to the borrower's financial position, and loan conditions including a loan term, information on the corresponding real estate, a loan amount, and a loan rate, related to a real estate loan;
• (b) means for analyzing the borrower's financial information to determine an ability-to-pay rate reflecting an interest rate on the loan reflecting the borrower's ability to repay a loan having the loan conditions;
• (c) means for determining from the loan data a default rate reflecting an interest rate realizable if the loan is foreclosed and a new loan secured by the real estate originated;
• (d) means for determining from the received loan data a minimum rate reflecting an interest rate realizable if proceeds from a sale of the real estate before expiration of the loan term are determined to be acceptable and a new loan secured by the real estate originated;
• (e) means for generating a comparison model from the borrower's financial information, the comparison model including the ability-to-pay rate, the default rate, and the minimum rate;
• (f) means for analyzing the comparison model to determine a relationship among the ability-to-pay rate, the default rate, the minimum rate, and a predetermined current return rate;
• (g) means for extracting lender preferences from a constraints database;
• (h) means for selecting an acceptable return rate for the loan based on the relationship, the lender preferences, and the personal data;
• and
• (i) means for modifying the loan conditions to provide the acceptable return rate.