Methods and systems for a collections model for loans
AssigneeGeneral Electric Capital Corporation
InventorHartley C. Starkman
Life of this patent
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Abstract
The present invention, in one aspect, relates to tools for forecasting cash flow and income from a collateral based loan portfolio that are particularly useful in volatile markets. In one specific embodiment, consumer payment behavior is modeled, and account movement is simulated. For each month, actual payment amounts can be compared to delinquency, and frequency of payment can be compared to delinquency. Actual performance is then applied to current contractual payments for forecasting. In addition, the models facilitate determination of where payments are coming from, i.e., who is paying.
Claims22
A method for modeling collections for non-stationary asset-based distressed loans in volatile markets wherein future monthly cash inflows are predicted using a computer system configured with a collections model and a re-marketing model, the non-stationary asset-based loans are included within a distressed loan portfolio, said method comprising the steps of:
- categorizing each non-stationary asset-based loan included within the portfolio based on a prior month's payment of the corresponding loan, non-stationary asset-based loans include at least one of automobile loans, vehicle loans, and credit card loans;
- categorizing each loan included within the portfolio based on a contractual delinquency of the corresponding loan;
- utilizing the collections model to predict payments made by borrowers of each loan included within the portfolio, the collections model is based on historical payment information of the borrower, a plurality of collection strategies that may be utilized for collecting payment from the borrower, and the delinquency category assigned to the loan;
- comparing payments received during a current month for each loan to the delinquency category assigned to each corresponding loan and the predicted payments for each corresponding loan;
- comparing payments received for each loan during the current month to the prior month's payment category of the corresponding loan;
- incorporating management feedback into expectations of future performance wherein management feedback includes recommending a change in collection strategies used for prompting payment from each borrower associated with each loan included within the portfolio and predicting future payment performance of each borrower based on the recommended change in collection strategies;
- and
- updating the collections model stored within the computer system based on the payment comparisons and the management feedback, the updated collections model predicts future cash inflows for each loan included within the portfolio, the updated collections model is configured to apply a greater weight to the payment performance of each loan for the current month as compared to the payment performance of each loan for prior months.
A computer-implemented system for modeling collections of collateral non-stationary asset-based distressed loans in volatile markets and predicting future monthly cash inflows, said system comprising:
- a computer including a collections model and a re-marketing model, the non-stationary asset-based loans are included within a distressed loan portfolio, said computer configured to:
- categorize each non-stationary asset-based loan included within the portfolio based on a prior month's payment of the corresponding loan, non-stationary asset-based loans include at least one of automobile loans, vehicle loans, and credit card loans,
- categorize each loan included within the portfolio based on a contractual delinquency of the corresponding loan,
- access the collections model to predict payments made by borrowers of each loan included within the portfolio, the collections model is based on historical payment information of the borrower, a plurality of collection strategies that may be utilized for collecting payment from the borrower, and the delinquency category assigned to the loan,
- compare payments received during a current month for each loan to the delinquency category assigned to each corresponding loan and the predicted payments for each corresponding loan,
- compare payments received for each loan during the current month to the prior month's payment category of the corresponding loan,
- incorporate management feedback into expectations of future performance wherein management feedback includes recommending a change in collection strategies used for prompting payment from each borrower associated with each loan included within the portfolio and predicting future payment performance of each borrower based on the recommended change in collection strategies, and
- update the collections model based on the payment comparisons and the management feedback, the updated collections model predicts future cash inflows for each loan included within the portfolio, the updated collections model is configured to apply a greater weight to the payment performance of each loan for the current month as compared to the payment performance of each loan for prior months.
Dependencies are inferred from the claim text.