111111
`
`(19) United States
`(12) Patent Application Publication
`Weiss
`
`(54) PROPERTY RATING AND RANKING
`SYSTEM AND METHOD
`
`(76)
`
`Inventor: Allan N. Weiss, Cambridge, MA (US)
`
`Correspondence Address:
`David M. Mello
`McDermott, Will & Emery
`28 State Street
`Boston, MA 02109 (US)
`
`(21) Appl. No.:
`
`09/919,110
`
`(22) Filed:
`
`Jul. 31, 2001
`
`11111111111111111111111111111111111111111111111111111111111111
`US 20020035520Al
`
`(10) Pub. No.: US 2002/0035520 Al
`Mar. 21, 2002
`(43) Pub. Date:
`
`No. 60/222,514, filed on Aug. 2, 2000. Non-provi(cid:173)
`sional of provisional application No. 60/222,453,
`filed on Aug. 2, 2000. Non-provisional of provisional
`application No. 60/222,397, filed on Aug. 2, 2000.
`Non-provisional of provisional application No.
`60/222,493, filed on Aug. 2, 2000. Non-provisional of
`provisional application No. 60/222,516, filed on Aug.
`2, 2000. Non-provisional of provisional application
`No. 60/222,513, filed on Aug. 2, 2000. Non-provi(cid:173)
`sional of provisional application No. 60/231,928,
`filed on Sep. 11, 2000.
`
`Publication Classification
`
`Related U.S. Application Data
`
`Int. Cl? ..................................................... G06F 17/60
`(51)
`(52) U.S. Cl. ................................. 705/27; 705/26; 705/38
`
`(63) Non-provisional of provisional application No.
`60/222,517, filed on Aug. 2, 2000. Non-provisional of
`provisional application No. 60/222,400, filed on Aug.
`2, 2000. Non-provisional of provisional application
`No. 60/222,391, filed on Aug. 2, 2000. Non-provi(cid:173)
`sional of provisional application No. 60/222,515,
`filed on Aug. 2, 2000. Non-provisional of provisional
`application No. 60/222,401, filed on Aug. 2, 2000.
`Non-provisional of provisional application No.
`60/222,399, filed on Aug. 2, 2000. Non-provisional of
`provisional application No. 60/222,452, filed on Aug.
`2, 2000. Non-provisional of provisional application
`
`(57)
`
`ABSTRACT
`
`A system and method is provided that includes a core
`property valuation system and one or more functional mod(cid:173)
`ules. Variously, the modules facilitate automatic adjustment
`of an equity line of credit, generation and management of an
`equity credit card, unsecured debt conversion to an equity
`loan, rapid closing of a conforming loan, automated PMI
`removal, property rating and/or ranking for buyers and
`sellers, evaluation and alerts, relocation alerts, relocation
`forecasting, property tradeoffs, and broker evaluations.
`
`START
`
`READ IN BORROWER &
`PROPERTY MORTGAGE
`INFORMATION 260
`
`BORROWER&
`PROPERTY MEET
`LENDING RQMNTS?
`258
`
`BORROWER
`ASSENTS TO EQUI
`LOAN?
`266
`
`No
`
`DOMN EX. 1002
`
`

`
`(
`
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`132
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`

`
`Patent Application Publication Mar. 21, 2002 Sheet 3 of 19
`
`US 2002/0035520 A1
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`Patent Application Publication Mar. 21, 2002 Sheet 4 of 19
`
`US 2002/0035520 A1
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`
`Patent Application Publication Mar. 21, 2002 Sheet 5 of 19
`
`US 2002/0035520 A1
`
`START
`
`OBTAIN PROPERTY
`VALUATION 252
`
`DETERMINE EQUITY 254
`
`READ IN BORROWER &
`PROPERTY MORTGAGE
`INFORMATION 260
`
`DETERMINE EQUITY LOAN
`ADJUSTMENT 256
`
`READ REQUIRED LOAN TO
`VALUE RATIO 262
`
`Yes-----,
`
`COMMUNICATE
`OPPORTUNITY TO
`BORROWER 264
`
`BORROWER&
`PROPERTY MEET
`LENDING RQMNTS?
`258
`
`BORROWER
`ASSENTS TO EQUI
`LOAN?
`266
`
`No
`
`1-------No
`
`Yes
`
`RESET ALARM 270
`
`PROCESS EQUITY LOAN
`268
`
`FIG. 28
`
`

`
`,---------------1
`I
`I
`I
`ro-12b~
`122 -v MANAGER
`I
`I
`I
`I
`I
`t
`I
`---------------,
`I
`I
`I
`I
`0130, 15~ EQUITY CARD
`I
`ACCOUNT
`I
`I
`160 (Via 31Q)! GENERATOR
`I
`l(
`312
`
`SYSTEM
`
`310
`
`1-_
`
`MORTGAGE
`LOAN MANAGER
`320
`
`•
`
`EQUITY LOAN
`MANAGER
`316
`
`'-
`
`--.
`
`I
`I
`I
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`
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`I
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`I
`I
`
`I
`
`EQUITY BILLING
`GENERATOR
`314
`300
`I L-------------------------------
`142
`
`FIG. 3
`
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`141
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`

`
`MORTGAGE
`LOAN MANAGER
`320
`
`142
`
`........ -141
`-
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`r---------------
` 120, 1~
`SYSTEM
`MANAGER
`410
`
`n
`
`,,
`
`DEBT
`CONVERSION
`MANAGER
`412
`
`1o
`
`160. 130v
`1
`
`I
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`I
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`
`EQUITY
`DETERMINATION
`MANAGER
`416
`
`ALERT
`GENERATOR
`414
`
`LIEN MANAGER
`420
`
`...
`
`~
`
`~
`
`------------------------------152
`
`400
`
`FIG. 4
`
`Via 120, 122
`
`I --------------....,
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`I
`
`

`
`:~
`To 120, 1~
`
`SYSTEM
`MANAGER
`510
`
`Via 120,122
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`i
`
`MORTGAGE
`LOAN MANAGER
`320
`
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`1ST LOAN
`PROCESSOR
`INMA/FREDDIIO M/,C
`512
`~PPRD MORTGAGE
`INFO
`
`--------------..,
`
`2ND LOAN
`PROCESSOR
`516
`
`I
`
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`I
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`
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`DIFFERENTIAL
`MODULE
`I! CONV. MORTGAGE INF~
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`I -------------- ----------------
`152
`
`~
`
`500
`
`FIG. 5
`
`

`
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`MANAGER
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`
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`320
`
`142
`
`1
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`:
`PMIREMOVAL
`ANALYZER ~rr------~
`616
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`:
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`:
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`I
`600
`:
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`-----------=-=--_I
`152
`
`PMI REMOVAL
`COMM
`MANAGER
`
`620
`
`FIG. 6
`
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`
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`

`
`Patent Application Publication Mar. 21, 2002 Sheet 10 of 19 US 2002/0035520 A1
`
`1\
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`

`
`Patent Application Publication Mar. 21,2002 Sheet 11 of 19 US 2002/0035520 A1
`
`START
`
`IDENTIFY PROPERTY/
`,-----~ PROPERTIES 752
`
`RATING?
`754
`
`Yes
`
`~-----No-----~
`
`RANKING?
`760
`
`Yes
`
`DEFINE, EDIT OR
`OBTAIN RATING
`CRITERIA 756
`
`DEFINE, EDIT OR I
`OBTAIN RANKING
`CRITERIA 762
`
`No
`
`RATE PROPERTY/
`PROPERTIES 758
`
`RANK PROPERTY/
`PROPERTIES 764
`
`END
`
`FIG. 78
`
`

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`
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`~~
`.
`
`SYSTEM
`MANAGER
`810
`
`RANKING
`MANAGER
`816
`
`.
`
`----~ •-•w• ~- • -~ w • • • • • w • • • • - • • w • • " - - • • • w • • • • • - • • • • • • •
`'
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`818
`
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`
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`
`VALUATION
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`
`j
`RATING
`· -~~ MANAGER
`
`I
`
`!!.11
`
`§14
`
`1..-----------------------------------------------------------------------------------------... -·
`152
`
`FIG. 8
`
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`! -------------- ---· -------- ----------· ----- -- ~~~~~~
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`MANAGER
`~
`
`RATING
`MANAGER
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`
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`
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`
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`
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`912
`
`COMPARATOR
`ili
`
`' ' ' ' '
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`------------ ------------------·
`'
`152
`
`i
`900
`L-------------==------------------------ - -----------
`
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`

`
`Patent Application Publication Mar. 21, 2002 Sheet 14 of 19 US 2002/0035520 A1
`
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`
`VALUATION
`MANAGER
`1012
`
`FORECAST
`MANAGER
`1024
`
`.. ~--------------------------------------------.. ·-----------------------------------------
`152
`
`FIG. 10
`
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`

`
`US 2002/0035520 A1
`
`Mar. 21, 2002
`
`1
`
`PROPERTY RATING AND RANKING SYSTEM
`AND METHOD
`
`CROSS REFERENCE TO RELATED
`APPLICATIONS
`
`[0001] This application claims the benefit of priority from
`the following, commonly owned U.S. Provisional Patent
`Applications:
`
`[0002] Ser. No. 60/222,517, filed Aug. 2, 2000,
`entitled Property Analysis and Management System
`and Method;
`
`[0003] Ser. No. 60/222,400, filed Aug. 2, 2000,
`entitled Automatically Adjusting Equity Loan Sys(cid:173)
`tem and Method;
`
`[0004] Ser. No. 60/222,391, filed Aug. 2, 2000,
`entitled Equity Card System and Method;
`
`[0005] Ser. No. 60/222,515, filed Aug. 2, 2000,
`entitled Unsecured Debt Conversion System and
`Method;
`
`[0006] Ser. No. 60/222,401, filed Aug. 2, 2000,
`entitled Rapid Close Conforming Loan System and
`Method;
`
`[0007] Ser. No. 60/222,399, filed Aug. 2, 2000,
`entitled Automated PMI Removal System and
`Method;
`
`[0008] Ser. No. 60/222,452, filed Aug. 2, 2000,
`entitled Property Rating and Ranking System and
`Method;
`
`[0009] Ser. No. 60/222,514, filed Aug. 2, 2000,
`entitled Property Evaluation and Alert System and
`Method;
`
`[0010] Ser. No. 60/222,453, filed Aug. 2, 2000,
`entitled Seller-Based Property Rating System and
`Method;
`
`[0011] Ser. No. 60/222,397, filed Aug. 2, 2000,
`entitled Relocation Alert System and Method;
`
`[0012] Ser. No. 60/222,493, filed Aug. 2, 2000,
`entitled Relocation Forecasting System and Method;
`
`[0013] Ser. No. 60/222,516, filed Aug. 2, 2000,
`entitled Property Tradeoff System and Method;
`
`[0014] Ser. No. 60/222,513, filed Aug. 2, 2000,
`entitled Broker Evaluation System and Method; and
`
`[0015] Ser. No. 60/231,928, filed Sep. 11, 2000,
`entitled Property Guaranteed Valuation System and
`Method.
`
`FIELD OF THE INVENTION
`
`[0016] The present invention generally relates to auto(cid:173)
`mated processing computer systems. More specifically, the
`present invention relates to computer-based systems and
`methods for facilitating evaluations and transactions relating
`to real and other properties.
`
`BACKGROUND OF THE INVENTION
`
`[0017] With the proliferation of the Internet and World
`Wide Web ("Web"), many individuals and organizations are
`
`rushing on-line to provide information and applications to a
`growing number of Web enabled recipients. Often, an orga(cid:173)
`nization, like a business, will adapt its traditional business
`model to include Web access. For example, many e-com(cid:173)
`merce sites allow consumers to place orders on-line. As
`another example, information providers may allow access to
`information, such as news, via the Web, in addition to
`traditional print or television mediums. That is, users can
`accomplish with a computer platform what they typically
`have accomplished by other means. In commercial models,
`relationships may be business to consumer ("B2C"), busi(cid:173)
`ness to business ("B2B"), or consumer to consumer
`("C2C").
`
`In a real estate context, there has been a migration
`[0018]
`of traditional sales models to the Web. As examples, clas(cid:173)
`sified adds, broker adds or multiple service listings are
`available on the Web through a variety of sites. A real estate
`advertising site may include links to mortgage companies,
`banks, credit reporting agencies, home inspectors, home
`appraisers, or contractors Web sites. Some real estate related
`sites may also include a mortgage calculation engine that
`allows the user to get an idea of the amount of loan they
`could obtain. Such sites may also include links to real estate
`sales data providers, such as the Banker and Tradesman (at
`www.bankerandtradesman.com).
`
`[0019] Additionally, automated real estate valuation
`engines may be used to generate real estate appraisals or
`property valuations, whether via a Web site or other system.
`Such valuation engines typically generate property valua(cid:173)
`tions based on property characteristics, prior sales of the
`subject property, location, and recent sales of nearby prop(cid:173)
`erties. These are typically systems that provide an automated
`alternative to the pen and paper methods traditionally used.
`
`[0020] Automation of traditional business models and
`migration to the Web is useful, although in certain contexts
`limited. In the real estate context, such migration has pro(cid:173)
`vided a wider scale of access to consumers and real estate
`professionals. However, much of this takes the limited form
`of providing a different medium to present traditional infor(cid:173)
`mation and services.
`
`[0021] Typical Web based real estate systems offer very
`little in the way of analytical tools that may assist buyers,
`sellers and brokers, for example, in using and interpreting
`the significant amount of real estate data becoming available
`on-line.
`
`SUMMARY OF THE INVENTION
`
`[0022] A system and method in accordance with the
`present invention includes a core property valuation system
`and a set of modular functionality that makes use of corre(cid:173)
`sponding property valuations to generate property value
`related information or perform property value related func(cid:173)
`tions. This modular functionality may be B2B, B2C, or C2C
`oriented, as examples, depending on the configuration of the
`system. Such a system may include any combination of the
`several components or functional modules described below.
`
`[0023] Preferably, a system in accordance with the present
`invention is a network-based system, or at least includes an
`interface to allow access to
`the various functionality
`described herein by network enabled devices. As a network(cid:173)
`based system, access need not be open public access, but
`
`

`
`US 2002/0035520 Al
`
`Mar. 21, 2002
`
`2
`
`rather could be selectively restricted to those individuals or
`organizations having memberships with a corresponding
`service provider or to those willing to purchase access to
`such functionality in various other manners, such as on a
`transaction basis.
`
`[0024] A system in accordance with the present invention
`may be configured for access by any of a number of network
`enabled devices (or "client devices"). A client device may be
`any electronic device that is enabled to accomplish or take
`part in transactions via a network. For example, the client
`device may be a personal computer (PC), such as a work(cid:173)
`station, desktop or laptop system, or a server. The client
`device may also be any of a variety of other devices, such
`as a personal digital assistant (PDA), e-mail device, tele(cid:173)
`phone, cellular telephone, or networked enabled television
`or appliance, as examples. Further, a system in accordance
`with the present invention may be accessible over any of a
`variety of networks, such as the Internet, World Wide Web
`(the "Web"), intranets, extranets, local area networks
`(LANs), wide area networks (WANs), private networks,
`virtual private networks (VPNs), and so forth, or any com(cid:173)
`bination thereof.
`
`[0025] The core property valuation system includes a
`processing device (e.g., one or more servers) having access
`to one or more databases of historical real estate sales and
`real estate characteristics information. For example, the
`databases may include a set of property-based information
`for each of a large volume of property addresses, including
`such information as the number of bedrooms and bathrooms,
`square footage, lot size, and/or sales price for a property. The
`database may also include information such as asking price,
`time on market, and a record of offers received. As will be
`appreciated by those skilled in the art, data may also be
`provided by third party sources, via a network. While the
`property valuation system is described primarily with
`respect to real property, the property valuation system could
`also be configured to accommodate any type of property
`where sales and characteristics information is available.
`
`[0026] An application system may be linked to the prop(cid:173)
`erty valuation system and include or access various com(cid:173)
`panion functional modules. For the most part, the functional
`modules, as described below, are configured to generate
`certain types of information or perform certain tasks using
`information provided from the property valuation system
`and other relevant information. The application system may
`serve as a local, front end system to the property valuation
`system. Or, the application system and the property valua(cid:173)
`tion system may be independent systems, wherein the appli(cid:173)
`cation system may be configured to access the property
`valuation system as needed via any of a number of standard
`form networks and communication links, as described
`above.
`
`[0027] A supplemental set of data (or a database) may be
`included that facilitates a correlation between sales data in
`the property valuation system database and other financial
`information or economic indicators, such as interest rates,
`inflation, GNP, CPI, unemployment rate, or any of a number
`of other such types of data. This supplemental data may be
`provided with the application system or by a third party
`system.
`
`[0028] An automatically adjusting equity loan (AAEL)
`system and method in accordance with the present invention
`
`provides a means in, for example, a real property context for
`a line of credit to be established or an existing line of credit
`to be adjusted with respect to equity in a subject property
`(e.g., the property owner's home). Generally, property value,
`and therefore equity, increases over time, although periods
`of decreases may be experienced from time to time. The
`AAEL system automatically increases the limit on the equity
`line of credit accordingly. If equity in the subject property
`decreases due to, for example, a drop in market values, an
`existing borrowing limit on a line of credit could be
`decreased accordingly, if desired.
`
`[0029] The AAEL system includes or accesses an account
`management system and accesses the property valuation
`system. The account management system may be the system
`of a lender with which an equity loan is held and managed.
`The AAEL system accesses the property valuation system
`and the account management system to determine whether,
`based on a change in the value of a subject property, the limit
`on an equity line of credit may be adjusted higher (or lower).
`The AAEL system is configured to adjust the equity line of
`credit accordingly. A notification, such as an e-mail, may be
`sent to the property owner to alert the owner (and gain the
`owner's consent if desired) to the change. The system could
`also be configured to obtain approval from the borrower
`before increasing the limit, which could be accomplished
`electronically. In addition to the third party data sources
`mentioned previously, interfaces to other third party systems
`may also be included, such as those that provide credit
`reporting services and lending guidelines. The various sys(cid:173)
`tems herein may be owned, controlled or operated by one or
`more entities.
`
`[0030] An equity card (EC) system and method in accor(cid:173)
`dance with the present invention provides a means to
`manage a chargeable equity line of credit for a client. The
`equity line of credit is backed by a piece of property. The
`client is issued an equity card useful for typical credit card
`type transactions and charges against the equity line of
`credit. Charges against the equity card result in distributions
`from the equity line of credit, under control of the EC
`system. The EC system bills the client according to the
`existing balance of the equity line of credit. The EC system
`may be used to establish a fixed equity card line of credit, or
`it may be used in conjunction with the AAEL system
`previously discussed, which provides an adjustable line of
`credit. When the AAEL system is included, changes to the
`limit of the equity line of credit may be "pushed" or
`"pulled".
`
`[0031] An unsecured debt conversion (UDC) system and
`method in accordance with the present invention facilitates
`conversion of unsecured debt, such as typical credit card
`purchases, for example, to debts secured by a subject
`property. The amount of debt that may be secured may not
`be greater than the equity in the subject property. As used
`herein, the term "conversion" refers to generating a lien
`against the subject property, typically real property, to secure
`a given amount of existing unsecured debt. The UDC system
`may be implemented as part of a financial services institu(cid:173)
`tion's account management system, such as the account
`management system previously discussed. In other forms,
`the UDC system may be implemented as a standalone
`system interfaced with providers of mortgage, loan, and/or
`lien information.
`
`

`
`US 2002/0035520 Al
`
`Mar. 21, 2002
`
`3
`
`[0032] The UDC system obtains the balance of all mort(cid:173)
`gages and equity loans against a subject property from, for
`example, an account management system. Additionally, the
`UDC system obtains a current automated property valuation
`from the property valuation system. Using this information,
`the UDC calculates amount of available equity in the subject
`property, as the difference between valuation and debt
`against the subject property. The UDC system uses the
`amount of equity to determine whether the amount of
`unsecured debt can be converted. Part of this determination
`may include checking credit reporting information related to
`the client and applying relevant financial, tax and/or lending
`guidelines. If the client assents to the debt conversion, the
`UDC system generates a lien against the subject property
`and distributes an amount corresponding the amount of
`previously unsecured debt. The UDC system may be con(cid:173)
`figured to pay unsecured debt by electronic means. Gener(cid:173)
`ating a lien includes generating typical documentation that
`may be recorded with a registry of deeds, for example. The
`debt conversion opportunity may be pushed or pulled. In the
`case of pushing, an alert generator may be included that, for
`example, sends an e-mail alert to the client informing the
`client of the opportunity.
`
`[0033] A rapid close (RC) system and method in accor(cid:173)
`dance with the present invention provides an automated
`means for generating a loan amount and interest rate in
`substantially real-time for a conforming loan, with respect to
`an automated valuation. The RC system may be a standalone
`system or it may be part of an account management system.
`The account management system includes an account man(cid:173)
`ager module of a first lender seeking to provide a rapid close
`first mortgage loan to a client seeking to purchase a subject
`property. Upon request for a mortgage by a client via the
`Internet, for example, the RC system determines the client's
`eligibility for a loan for the subject property. The property
`valuation system returns an automated valuation for the
`subject property. With the automated valuation, the RC
`system determines the client's eligibility for a mortgage,
`applying the relevant guidelines. If approved, the client is
`notified, preferably via e-mail alert.
`
`[0034] Generally, if the loan to value ratio (LTV) of a
`mortgage loan is 80% or less, the loan is considered to be
`conforming, otherwise the loan is considered non-conform(cid:173)
`ing. Traditionally, lenders require that an appraiser visits the
`subject property before the loan can be closed. Therefore,
`using traditional models the loan could not be quickly
`closed, but it can be quickly guaranteed using the RC
`system. When the traditional appraisal is required for the
`subject property there will be two property valuations: the
`automated valuation and the traditional appraisal. The auto(cid:173)
`mated valuation is determined substantially in real-time and
`there may be a traditional appraisal which is conducted some
`time after the real-time automated appraisal. Using the
`automated valuation, the client may be guaranteed a con(cid:173)
`forming loan, with respect to the automated property valu(cid:173)
`ation. The loan amount and interest rate are guaranteed.
`
`[0035] Ultimately, if the traditional appraisal is less than
`the automated valuation, the loan may be considered to be
`non-conforming with respect to the traditional appraisal. In
`such case, a first mortgage loan is given for an amount less
`than the requested amount, yet conforming with respect to
`the traditional appraisal. This creates a shortfall amount
`between the requested loan amount and the first mortgage
`
`loan. A second loan amount is determined and is issued to
`cover the shortfall. The second loan is made to maintain the
`overall guaranteed amount and interest rate.
`
`[0036]
`If the interest rate of the second loan is greater than
`the guaranteed interest rate, the present value corresponding
`to that difference may be determined so that the guaranteed
`interest rate may be maintained for the second loan. That
`present value is either paid up front as a fee, either by the
`client or by the first lender, or it may be waived by the
`second lender. As a result, the first lender can maintain its
`promise or guarantee of loaning a certain amount of money
`based on the automated appraisal and having a given interest
`rate. In another embodiment, if the second loan interest rate
`is above the guaranteed interest rate, the first lender may
`decrease the first loan interest rate such that the effective
`interest rate across both loans is equal to the guaranteed
`interest rate.
`
`[0037] An automated PMI removal system and method in
`accordance with the present invention provides a means for
`automatically removing private mortgage insurance from an
`existing mortgage. The PMI removal system may be part of
`a mortgage account management system or a standalone
`system that interfaces with a mortgage account management
`system. The system also interfaces with the property valu(cid:173)
`ation system. The account management system administers
`a client's underlying mortgage loan and related PMI
`acco