Lender rating system and method
OwnerArthur J. Priestoninventor
Life of this patent
Estimating the term…
Abstract
The present invention is directed at a system and method to rate lender profiles to determine the level of risk that is present in the loans originated or purchased by a particular lender will be based on a misrepresentation or as a result of material inaccuracies in the financial information provided by or on behalf of the borrower. The rating is preferably based on a variety of factors including at least one of, for example, prefunding controls, post closing controls, product mix, and/or loan source.
Claims24
A method for performing due diligence of a lender by providing a rating assessing risks associated with loan applications and loans handled by the lender, the method using at least one computer and at least one database, the method comprising:
- receiving lender information including loan sources used by the lender to obtain loan applications and loans, product types handled by the lender including the number and total dollar value of loans by product type, and a list of investors whom purchased loans from the lender, the received lender information is entered into one of the at least one database,
- contacting at least two investors from the list of investors regarding the lender that submitted the lender information, contacting investors includes populating one of the at least one database with information received from the contacted investors,
- reviewing internal controls used by the lender for processing loan applications and/or for conducting a post-closing review of loans recently closed, the review of the internal controls includes whether the internal controls are being used correctly during underwriting and funding of loans, where the review uses the at least one computer,
- analyzing the received lender information using the at least one computer and database entries associated with the lender being rated, and
- rating the lender using at least one computer based on information received from the investors, the review of the lender's internal controls, and the analysis of the lender information.
A method for updating a lender rating representing a risk associated with loan applications and loans handled by a lender, the method using at least one computer, the method comprising:
- receiving updated loan information electronically from a lender, where the updated loan information includes at least the number and dollar volume of loans overall, by product type, and by geographic area handled by the lender,
- comparing with the at least one computer the received updated loan information to a lender profile based on previous information received from the lender during a prior rating analysis, the lender profile includes at least the number and dollar volume of loans overall, by product type, and by geographic area handled by the lender, and
- when at least one difference detected by the at least one computer between the received updated loan information and the lender profile is greater than a predetermined threshold, then performing the following
- updating the lender profile in view of the received updated loan information, and
- adjusting the lender rating based on the updated lender profile.
A method for updating a rating for at least one insured of an insurance company based on analysis of an insurance claim for coverage made by at least one lender insured by the insurance company, the method using at least one computer, the method comprising:
- analyzing the insurance claim using at least one computer to determine which if any of a lender's qualitative controls were utilized by the lender during underwriting of a loan application and/or loan that resulted in the insurance claim;
- analyzing with the at least one computer the insurance claim and similar insurance claims submitted previously for any claim concentrations, using the at least one computer;
- when at least one claim concentration is found based on the computer analysis, adjusting the rating for any insured of the insurance company when the insured has an overlap between the at least one claim concentration and loans handled by the insured using the at least one computer, the adjustment is based on the insurance claim and qualitative control analysis if necessary to provide an updated assessment of a risk that a loan sold by the lender will lead to a repurchase request.
A method for performing due diligence of a lender by providing a rating assessing risks that loan applications and loans handled by the lender will be based on fraud or result in default, the method using at least one computer and at least one database, the method comprising:
- receiving lender information including loan sources used by the lender to obtain loan applications and loans, and product types handled by the lender including the number and total dollar value of loans by product type, the received lender information is entered into one of the at least one database,
- reviewing internal qualitative controls used by the lender for processing loan applications and/or for conducting a post-closing review of loans recently closed, the review of the internal qualitative controls includes whether the internal controls are being used correctly during underwriting and funding of loans, where the review uses the at least one computer,
- analyzing the received lender information using the at least one computer and database entries associated with the lender being rated, and
- rating the lender using the at least one computer based on the review of the lender's internal qualitative controls and the analysis of the lender information.
Dependencies are inferred from the claim text.