United States Patent [19J
`Tengel et al.
`
`[54] APPARATUS AND METHOD FOR
`AUTOMATICALLY MATCHING A BEST
`AVAILABLE LOAN TO A POTENTIAL
`BORROWER V IA GLOBAL
`TELECOMMU NICATIONS NETWORK
`
`111111 1111111111111111111111111111111111111111111111111111111111111
`
`US005940812A
`5,940,812
`[11] Patent Number:
`[45] Date of Patent:
`Aug. 17, 1999
`
`Primary Examiner-Kevin 1. Teska
`
`
`Assistant Examiner-Mark 1. Fink
`Attorney, Agent, or Firm-McDonnell Boehnen Hulbert &
`Berghoff
`
`[57]
`
`ABSTRACT
`
`A loan ongmation system including an apparatus and
`
`
`method for automatically matching a best available loan to
`
`
`
`a potential borrower, via a global telecommunications net­
`
`work. The loan origination system of the present invention
`
`brings together via the global telecommunications network
`
`
`
`potential borrowers and lenders. The loan origination system
`
`accepts and stores into a database borrower attributes
`
`
`entered by a potential borrower requesting a loan, via the
`
`global telecommunications network. The loan origination
`system also accepts and stores into the database credit
`[51] Int. Cl.6 ...................................................... G06F 17/60
`
`
`related information regarding the potential borrower sent
`[52] U.S. Cl. ............................. 705/38; 395/238; 364/408
`
`
`from at least one credit bureau. The loan origination system
`[58] Field of Search ...............................
`705/38; 395/238;
`
`
`stores into the database respective loan acceptance criteria
`364/408
`
`
`and respective loan attributes for an offered loan. The loan
`
`
`origination system compares the borrower attributes of the
`
`
`potential borrower with all of the loan acceptance criteria
`U.S. PATENT DOCUMENTS
`
`
`stored in the database to determine any available loans for
`5,239,462 8/1993 Jones et a!.
`364/408
`
`
`the potential borrower. The loan attributes of the available
`.............................
`
`
`5,274,547 12/1993 Zoffel et a!. 364/408
`............................
`loans are analyzed to determine rankings of best loans. From
`
`5,611,052 3/1997 Dykstra et a!. 395/238
`.........................
`the rankings of best loans, the borrower chooses a selected
`
`
`5,704,045 12/1997 King eta!. .............................. 395/235
`
`loan provided by a selected lender. A loan application is
`5,765,144 6/1998 Larche eta!.
`705/38
`.............................
`5,797,133 8/1998 Jones eta!.
`705/38
`
`
`
`automatically generated from the borrower attributes and is
`...............................
`
`automatically sent to the selected lender for loan approval.
`
`
`In addition, the loan origination system of the present
`
`invention provides to a lender information regarding bor­
`
`
`rowers and/or other competitive lenders in the loan market.
`
`Cary G. Tengel, Chicago, Ill.; Thomas
`[75] Inventors:
`A. Farin, Madison, Wis.; Michael L.
`Kowal, Oak Park, Ill.; L. Darryl
`Mataya, Mt. Horeb, Wis.
`
`[73] Assignee: LoanMarket Resources, L.L.C.,
`Chicago, Ill.
`
`[21] Appl. No. : 08/914,633
`
`[22] Filed: Aug. 19, 1997
`
`[56]
`
`References Cited
`
`OTHER PUBLICATIONS
`
`Document No. 1006-3425, 1997, Ho Geun Lee.
`
`
`Document No. 1060-3425/98, 1998, Hans U. Buhl.
`1998, Subbarao V. Wun­
`Document No. 0--7803-4391-3/98,
`nava.
`
`48 Claims, 12 Drawing Sheets
`
`100
`�
`
`109
`
`110
`
`SERVER
`TERMINAL
`
`116
`
`CREDIT
`BUREAU
`
`CREDIT
`BUREAU
`117
`
`Petitioner Askeladden - Exhibit 1006 - Page 1
`
`

`
`GLOBAL �
`I/\.__ TELECOMHUNICATIONI
`\. I
`TERMINAL r�1 06
`CONSUMER
`I
`
`LENDER
`TERMINAL
`1 1 1
`
`LENDER
`TERMINAL 102
`
`109
`
`_/
`
`110
`
`SERVER
`TERMINAL
`/ I
`
`-·
`
`NETWORK
`""'--"' '---"""
`
`116
`
`I ..Y
`
`DATA H CREDIT BUREAU
`
`R
`PROCESSO
`
`INTERFACE
`I
`�
`
`
`I
`
`I
`
`CREDIT I
`
`BUREAU
`
`CREDIT
`BUREAU . ' 117
`FIG. 1
`
`100
`�
`
`·I CONIUHER � i:;
`
`TERMINAL 1 04 �
`�
`
`d •
`\Jl •
`�
`�
`......
`�
`= ......
`
`>
`�
`
`'"""'
`
`� � .....
`;
`'"""'
`N
`
`Ul ....
`\C
`""-
`
`�
`
`�
`N
`
`Petitioner Askeladden - Exhibit 1006 - Page 2
`
`

`
`U.S. Patent Aug. 17, 1999 Sheet 2 of 12
`
`5,940,812
`
`206
`.,.; .
`
`I START I
`•
`
`202
`+ �
`
`ACCEPT AND STORE INTO THE
`
`
`DATABASE A FIRST PORTION OF
`
`
`THE BORROWER ATTRIBUTES AS
`
`ENTERED BY THE POTENTIAL
`BORROWER.
`
`STORE INTO THE DATABASE A
`
`RESPECTIVE lENDER ACCEPTANCE
`
`CRITERIA FOR EACH LOAN THAT IS
`
`
`POTENTIALLY AVAILABLE TO THE
`
`POTENTIAL BORROWER.
`
`204,
`,
`». STORE INTO THE DATABSE
`THE ' r208
`ACCEPT AND STORE INTO
`
`
`RESPECTIVE LOAN ATTRIBUTES FOR
`OF IJI.
`
`DATABASE A SECOND PORTION
`EACH LOAN THAT IS POTENTIALLY
`
`
`THE BORROWER ATTRIBUTES AS
`
`AVAILABLE TO THE POTENTIAL
`
`SENT FROM A CREDIT BUREAU.
`BORROWER.
`
`COMPARE THE BORROWER
`WITH EACH LENDER I r21 0
`ATTRIBUTES
`TO IJI.
`
`ACCEPTANCE CRITERIA
`
`
`DETERMINE ANY AVAILABLE LOANS
`
`FOR THE POTENTIAL BORROWER.
`
`I
`
`214
`�
`
`DETERMINE A SECOND
`
`RANKING OF BEST LOANS FROM
`
`A RESPECTIVE COMPOSITE
`
`SCORE FROM A WEIGHTING OF
`THE RESPECTIVE LOAN
`
`ATTRIBUTES FOR EACH OF THE
`
`AVAILABLE LOANS.
`
`212
`�
`
`DETERMINE A FIRST RANKING Of
`
`BEST LOANS FOR EACH OF THE
`LOAN ATTRIBUTES.
`
`I 0
`FIG. 2A
`
`Petitioner Askeladden - Exhibit 1006 - Page 3
`
`

`
`U.S. Patent Aug. 17, 1999 Sheet 3 of 12
`
`5,940,812
`
`A
`
`THE RAN KINGS OF BEST 1 r 216
`DISPLAY
`LOANS TO THE POTENTIAL 1M
`
`BORROWER VIA THE GLOBAL
`TELECOMMUNICATIONS NETWORK.
`
`ACCEPT A SELECTED LOAN
`
`
`
`PROVIDED BY A SELECTED LENDER
`I r 218
`�
`AS CHOSEN BY THE POTENTIAL
`BORROWER FROM THE RAN KINGS
`
`OF BEST LOANS.
`
`I r220
`GENERATE A LOAN APPLICATION
`FROM THE BORROWER 1M
`ATIRIBUTES.
`
`
`SEND THE LOAN APPLICATION VIA
`THE GlOBAL 1 r222
`NETWORK �
`TELECOMMUNICATIONS
`
`TO THE SElECTED lENDER FOR
`lOAN APPROVAL
`
`END
`
`FIG. 28
`
`Petitioner Askeladden - Exhibit 1006 - Page 4
`
`

`
`U.S. Patent
`
`Aug. 17, 1999 Sheet 4 of 12
`
`5,940,812
`
`300�
`
`
`
`LENDER ACCEPTANCE CRITERIA
`
`350
`
`PRODUCT
`
`MIN MAX
`LENDER CRITERIA
`MENU
`BORROWER ATTRIBUTE
`GROUP
`VALUE VALUE
`/301
`X
`/302
`X
`/303
`X
`
`1. PRODUCT TYPE
`2. TRADE AREA
`GEOGRAPHY
`3. YEARS IN CURRENT X
`RESIDENCE
`
`/304
`X
`/305
`X
`
`/306
`X
`
`/307
`/308
`
`/309
`/310
`
`/311
`
`/312
`
`/313
`
`
`4. REQUIRED TO OWN HOME
`5. YEARS WITH PRESENT X
`DEMOGRAPHICS
`EMPLOYER
`6. PERMITTED TO
`BE SELF-
`EMPLOYED
`7. GROSS MONTHLY INCOME X X
`8. DEBT/INCOME RATIO
`X X
`9. CREDIT LIMIT
`X X
`CREDIT LIMIT
`10. CLTV
`X X
`11. NUMBER OF OPEN
`X X
`TRADES
`12. AGE OF OLDEST TRADE X X
`13. AGGREGATE
`UTILIZATION X X
`%
`14. CURRENT MORTGAGE X X
`DELINQUENCY
`15. CURRENT NON-MORTGAGE X X
`PAYMENT
`DELINQUENCY
`PERFORMANCE
`16. #OF 3Q-DAY MORTGAGE X X
`IN PAST 24
`DELINQUENCIES
`MONTHS
`
`CREDIT
`UTILIZATION
`
`FIG. 3A
`
`Petitioner Askeladden - Exhibit 1006 - Page 5
`
`

`
`U.S. Patent Aug. 17, 1999 Sheet 5 of 12
`
`5,940,812
`
`300�
`
`350
`
`X
`
`X
`
`X
`
`17. #OF 30-DAY NON· X
`X
`
`
`MORTGAGE DELINQUENCIES IN
`PAST 24 MONTHS
`18. #OF 60-DAY MORTGAGE X
`
`DELINQUENCIES IN PAST 24
`MONTHS
`PAYMENT 19. #OF 60-DAY NON· X
`X
`PERFORMANCE
`
`
`MORTGAGE DELINQUENCIES IN
`(CON'T) PAST 24 MONTHS
`20. #OF 90-DAY MORTGAGE X
`
`DELINQUENCIES IN PAST 24
`MONTHS
`
`21. #OF 90-DAY NON· X
`X
`
`MORTGAGE DELINQUENCIES
`IN PAST 24 MONTHS
`
`22. # OF CHARGE-OFFS >
`X
`$250 IN THE PAST 24 MONTHS
`23. ANY FORECLOSURE,
`
`JUDGMENTS BANKRUPTCY, OR LEGAL
`PROCEEDINGS?
`24. YEARS SINCE RESOLUTION
`X
`X
`OF BANKRUPTCY
`25. LIEN POSITION X
`X
`
`26. CURRENT MARKET VALUE X
`X
`
`COLLATERAL 27. DISTRIBUTION OF
`PROCEEDS
`28. USE OF PROPERTY
`29. AGE OF COLLATERAL X
`X
`
`
`
`CREDIT SCORE 30. FICO SCORE
`
`X
`X
`
`FIG. 38
`
`/320
`
`/321
`
`/322
`
`X
`
`/323
`
`/324
`
`/325
`/326
`
`X
`
`/327
`
`X
`
`/328
`/329
`/330
`
`Petitioner Askeladden - Exhibit 1006 - Page 6
`
`

`
`U.S. Patent Aug. 17, 1999 Sheet 6 of 12
`
`5,940,812
`
`450
`
`400 �
`
`LOAN ATIRIBUTES
`LOAN ATIRIBUTE
`
`LENDER'S BID
`/401
`
`1. BID IDENTIFICATION NUMBER
`/402
`
`
`2. BORROWERATIRIBUTES IDENTIFICATION NUMBER
`/403
`RATE (APR)
`
`3. ANNUAL PERCENTAGE
`/404
`
`4. INTEREST RATE
`/405
`5. FIXED/ADJUSTS WITH:
`/406
`
`6. MARGIN OVER INDEX
`/407
`7. ADJUSTMENT INTERVAL
`
`/408
`
`8. ORIGINATION FEE
`/409
`
`
`9. NON-ORIGINATION FEE CLOSING COSTS
`/410
`
`10. ANNUAL FEE
`/411
`LOAN TERM (YEARS)
`11. MAXIMUM
`/412
`
`
`
`12. FULL AMORTIZATION MONTHLY PAYMENT FOR
`
`EVERY $1,000 BORROWED.
`
`
`
`13. MINIMUM MONTHLY PAYMENT FOR $1,000
`BORROWED.
`
`14. OTHER UNIQUE ATTRIBUTES.
`
`/413
`
`/414
`
`FIG. 4
`
`Petitioner Askeladden - Exhibit 1006 - Page 7
`
`

`
`U.S. Patent Aug. 17, 1999 Sheet 7 of 12
`
`5,940,812
`
`550
`
`500�
`
`N:-=:
`=E
`
`_
`
`N_D
`Y_A
`H_L
`N_T
`_O
`
`M:-:=
`�O
`
`_
`
`_
`
`LOAN APPLICATION FORM
`
`WHEN YOU HAVE COMPLETED THE
`PLEASE PROVIDE ALL THE REQUESTED INFORMATION.
`
`
`FORM,
`
`
`PRESS THE SUBMIT BUTION TO SEND YOUR APPLICATION FOR PROCESSING.
`
`LOAN TYPE (MORTGAGE, EQUiiY, AUTO, BUSINESS, ETC.)::�=----
`
`FIRST NAME::.
`
`PRIMARY APPLICANT: LAST NAME:
`__
`_
`
`SOCIAL SECURITY NUMBER:.
`
`DATE OF BIRTH:.
`__
`__
`_
`ADDRESS:.
`.=
`HOME PHONE NUMBER:
`_____
`_
`--
`=--
`:
`CE
`
`YEARS IN CURRENT :
`RES
`ID
`CITY, STATE, ZIP CODE
`OWN HOME (YIN):.
`_
`____
`
`EMPLOYER NAME:.=-=::-:-:-=-:-=:----
`
`EMPLOYER PHONE NUMBER:
`__
`JOB START DATE (MONTH/YEAR):.__
`JOB TITlE:
`_
`__
`GROSS INC
`E: _
`SELF-EMPLOYED
`(YIN):.__
`M
`OTHER INCOME: .
`_
`_
`_
`_
`_
`_
`_
`_
`DEBTS MONTHLY PAYMENT:
`1.
`2. _____
`_
`4. _____
`3.
`_
`_
`6. _____
`5.
`
`
`(IN ADDITION TO RENT/MORTGAGE LIST ALL OTHER DEBTS, FOR EXAMPLE, AUTO LOANS,
`
`
`
`
`
`
`CREDIT CARDS, SECOND MORTGAGE, HOME ASSOCIATION DUES, ALIMONY, CHILD SUPPORT,
`
`
`
`
`CHILD CARE, MEDICAL UTILITIES, AUTO INSURANCE, IRS LIABILITIES, ETC.)
`
`JOINT APPLICANT (IF ANY): LAST NAME:
`FIRST NAME:.
`_
`__
`
`AN_N
`
`AL_
`_U
`
`
`
`
`SOCIAL SECURITY NUMBER:
`_
`__
`COMMENTS:
`__
`___________
`_
`
`DATE OF BIRTH:
`__
`
`_
`
`_
`
`TO USE CREDIT
`REPORTING AGENCIES
`
`IM'E GIVE PERMISSION BY SUBMITIING THIS APPLICATION,
`
`
`INiE CERTIFY THAT STATEMENTS
`ARE TRUE
`
`FOR FURTHER INFORMATION.
`ON THIS APPLICATION
`AND COMPLETE.
`
`�502
`
`FIG. 5
`
`Petitioner Askeladden - Exhibit 1006 - Page 8
`
`

`
`U.S. Patent Aug. 17, 1999 Sheet 8 of 12
`
`5,940,812
`
`650
`
`RANKING OF BEST AVAILABLE LOANS
`600
`"' 602 604 606 608 610
`612
`I j_ j_ I
`I
`j_
`LOAN LOWEST LOWEST LOWEST LOWEST HIGHEST
`HIGHEST
`LOWEST
`ATTRIBUTE APR CURRENT FIXED TOTAL CREDIT
`
`MINIMUM WEIGHTED
`INTEREST
`INTEREST
`ORIGINATION
`LIMIT
`MONTHLY
`SCORE
`RATE RATE COST
`PAYMENT
`
`614
`I
`
`BIDID#
`
`APR
`
`RATE
`INTEREST
`FIXED/
`ADJUST WITH:
`MARGIN OVER
`INDEX
`
`ORIGINATION
`FEE
`CLOSING
`COSTS
`ANNUAL FEE
`MAXIMUM
`LOAN TERM
`
`FULL AMORT.
`MONTHLY
`
`PAYMENT FOR
`EVERY$1,COJ
`LOAN
`
`MINIMUM
`MONTHLY
`
`PAYMENT FOR
`EVERn1,COJ
`LOAN
`OTHER UNIQUE
`ATTRIBUTES
`
`FIG. 6
`
`Petitioner Askeladden - Exhibit 1006 - Page 9
`
`

`
`U.S. Patent Aug. 17, 1999 Sheet 9 of 12
`
`5,940,812
`
`700�
`
`
`
`SELECTED LENDER
`
`750
`
`_
`
`
`
`LENDER'S BID
`
`_
`___
`LENDER NAME:,
`___
`LENDER PHONE NUMBER:
`___
`_
`LENDER ADDRESS:
`LENDER CONTACT NAME·
`LOAN ATIRIBUTE
`1. BID IDENTIFICATION
`NUMBER
`2. BORROWER ATIRIBUTES
`IDENTIFICATION NUMBER
`
`3. ANNUAL PERCENTAGE RATE (APR)
`4. INTEREST
`RATE
`5. FIXED/ADJUSTS
`WITH:
`6. MARGIN OVER INDEX
`7. ADJUSTMENT
`INTERVAL
`8. ORIGINATION FEE
`9. NON·ORIGINATION
`FEE CLOSING COSTS
`10. ANNUAL FEE
`11. MAXIMUM LOAN TERM (YEARS)
`12. FULL AMORTIZATION
`MONTHLY PAYMENT FOR
`EVERY $1,000
`BORROWED.
`13. MINIMUM MONTHLY PAYMENT FOR $1,000
`BORROWED.
`14. OTHER UNIQUE ATIRIBUTES
`
`SHOULD A LOAN APPLICATION BE SUBMITIED TO THIS LENDER? (PLEASE
`
`ENTER "Y" FOR YES AND "N" FOR NO.)
`
`
`\
`
`702
`
`FIG. 7
`
`Petitioner Askeladden - Exhibit 1006 - Page 10
`
`

`
`U.S. Patent Aug. 17, 1999 Sheet 10 of 12
`
`5,940,812
`
`800 '-...
`
`
`
`APPLICATIONS IN LINE
`
`850
`
`1 2 3
`
`LOAN ID#
`POSTED DATE
`FINAL DISPOSITION
`
`EXPLANATION FOR DENIAL OR CHANGE OF TERMS
`1. BID IDENTIFICATION
`NUMBER
`2. BORROWERATIRIBUTES
`
`IDENTIFICATION NUMBER
`RATE (APR)
`3. ANNUAL PERCENTAGE
`4. INTEREST
`RATE
`5. FIXED/ADJUSTS WITH:
`6. MARGIN OVER INDEX
`7. ADJUSTMENT
`INTERVAL
`8. ORIGINATION
`FEE
`9. NON-ORIGINATION
`FEE CLOSING COSTS
`10. ANNUAL FEE
`11. MAXIMUM LOAN TERM (YEARS)
`12. FULL AMORTIZATION
`MONTHLY PAYMENT FOR
`EVERY $1,000
`BORROWED.
`
`13. MINIMUM MONTHLY PAYMENT FOR $1,000
`BORROWED.
`14. OTHER UNIQUE ATIRIBUTES
`
`FIG. 8
`
`Petitioner Askeladden - Exhibit 1006 - Page 11
`
`

`
`U.S. Patent Aug. 17, 1999 Sheet 11 of 12
`
`5,940,812
`
`c BEGIN
`
`LENDER I r 90 2
`ACCEPT SPECIFIED
`AS �
`
`ACCEPTANCE CRITERIA
`
`ENTERED BY A LENDER.
`
`�-----------��'�
`
`SEND TO THE LENDER
`
`INFORMATION SUCH AS LOAN
`
`904 , ATIRIBUTES OF LOANS PROVIDED
`1. BY OTHER LENDERS
`HAVING THE
`
`SPECIFIED LENDER ACCEPTANCE
`CRITERIA.
`
`-�1-----------
`CONTAIT AND ACCEPT FROM AT
`
`
`
`LEAST ONE CREDIT BUREAU
`ALREADY 1 r 906
`
`PERFORMANCE DATA OF
`LOANS HAYING THE If
`EXISTING
`
`SPECIFIED LENDER ACCEPTANCE
`CRITERIA.
`
`SPECIFIED I r 9 0 8
`CALCULATE
`�
`
`PERFORMANCE CHARAITERISTICS
`
`FROH THE PERFORMANCE DATA.
`
`SEND TO THE LENDER VIA THE
`NETWORK THE r 91 0
`TELECOMMUNICATIONS
`PERFORMANCE t11.
`SPECIFIED
`
`CHARACTERISTICS FOR THE SPECIFIED
`
`LENDER ACCEPTANCE CRITERIA.
`
`j
`
`END
`
`FIG I 9
`
`Petitioner Askeladden - Exhibit 1006 - Page 12
`
`

`
`U.S. Patent Aug. 17, 1999 Sheet 12 of 12
`
`5,940,812
`
`1050
`
`1000
`�
`PERFORMANCE CHARACTERISTICS FOR SPECIFIED LENDER ACCEPTANCE CRITERIA#_
`
`
`
`
`FOR LOANS ORIGINATED FROM DATE TO DATE :
`
`t t
`
`1002 1004
`
`$ VALUE OF LOANS
`
`
`NUMBER OF LOANS
`
`PERFORMANCE CHARACTERISTIC
`% LOAN REMAINING
`% DELINQUENT
`FOR 30 DAYS
`
`% DELINQUENT FOR 60 DAYS
`% DELINQUENT FOR
`90+ DAYS
`% CHARGED-OFF
`
`FIG. 10
`
`Petitioner Askeladden - Exhibit 1006 - Page 13
`
`

`
`5,940,812
`
`TECHNICAL FIELD
`
`BACKGROUND OF THE INVENTION
`
`1
`APPARATUS AND METHOD FOR
`AUTOMATICALLY MATCHING A BEST
`AVAILABLE LOAN TO A POTENTIAL
`BORROWER V IA GLOBAL
`TELECOMMU NICATIONS NETWORK
`
`2
`
`risk, prepayment risk and other attributes, which therefore
`
`will result in an unprofitable loan for the lender. Borrowers
`
`with above average attributes will be offered loans that are
`
`
`too unfavorable relative to their attributes. In the prior art,
`
`
`sufficient 5 lenders are unable to establish and maintain a
`
`
`number of loans with corresponding loan acceptance criteria
`
`
`
`to allow them to precisely scale and match loan attributes to
`
`the borrower's attributes.
`This invention relates to loan origination systems, and
`
`
`Furthermore, a lender with the prior art loan origination
`
`more particularly, to an apparatus and method for automati­
`procedure may not have access to information about loan
`10
`
`cally matching a best available loan to a potential borrower
`
`terms provided by other competitive lenders to borrowers
`
`
`given the particular attributes of that borrower, via a global
`
`
`having similar qualifications. Thus, a lender may waste time
`
`telecommunications network.
`
`and resources in establishing and offering uncompetitive
`loan terms.
`Consequently, a loan origination system is desired that
`
`
`15
`In the prior art, a potential borrower who needs a loan
`
`
`
`
`automatically matches any potential borrower to the best
`
`available loan and that aids in easy access to information
`
`
`
`typically either searches various lender advertisements for
`
`about the loan market for both potential borrowers and
`
`
`
`information, searches interest rate listing services, contacts
`
`lenders. With such an improved loan origination system, any
`
`
`a number of lenders to request information or simply applies
`
`
`potential borrower can have fast and efficient access to a best
`for a loan without comparison shopping. Lenders typically
`
`
`20 available loan, and the lender can offer more accurate and
`
`present their loans with the best terms in advertisements,
`
`
`
`
`competitive loan terms to a potential borrower having a
`which may not be the loan for which the potential borrower
`
`corresponding set of borrower attributes.
`would be able to qualify.
`SUMMARY OF THE INVENTION
`Rate listing services are of limited value as they generally
`
`
`
`do not present a comprehensive description of loan features, 25
`
`Accordingly, it is a primary object of the invention is to
`
`pricing, terms, and conditions. Furthermore, the published
`
`
`more efficiently and effectively match a best available loan
`
`rates do not consider the attributes, including the risk profile
`
`
`against borrower attributes of a potential borrower using a
`
`
`of the respective borrower. The services generally publish
`
`global telecommunications network such as the Internet.
`the lender's best rate, for which the potential borrower may
`
`
`More specifically, a database accumulates information
`not qualify.
`30 regarding potential borrowers and potentially available
`
`
`loans in the loan market, and provides easy access to such
`
`
`Alternatively, contacting directly a number of lenders
`
`information for both potential borrowers and lenders.
`typically requires the potential borrower to go through a
`
`
`tedious process of contacting each lender and of manually
`
`
`
`In a general aspect of the present invention, a consumer
`
`
`filling out loan applications. The potential borrower wastes
`terminal, coupled to the global telecommunications
`
`much time and effort in either traveling to the lender or in 35
`network, accepts a first portion of borrower attributes
`
`
`having the lender send information and application forms.
`
`entered by the potential borrower into the consumer termi-
`
`
`The required time and effort in searching for available loans
`nal. Furthermore, a server terminal is coupled to the global
`
`
`and in filling out loan applications acts as a barrier to the
`
`
`
`telecommunications network and includes a database and a
`
`borrower for acquiring a maximum amount of information
`
`
`processor. The database stores the first portion of the bor­
`about loans in the loan market, and even about loans 40
`
`
`rower attributes sent to the server terminal by the consumer
`
`
`
`available from an individual lender. Although the automated
`terminal and stores a second portion of the borrower
`
`
`loan processing system disclosed in U.S. Pat. No. 5,611,052
`
`attributes provided by a credit bureau. The database also
`
`to Dykstra et al. provides automation to the lender for
`
`
`
`
`stores a respective loan acceptance criteria and respective
`
`
`approving or disapproving loan applications, such a system
`
`
`
`
`
`loan attributes for each loan that is potentially available to
`
`
`does not automatically determine a best available loan for a 45
`
`the potential borrower. The data processor compares the
`
`potential borrower.
`
`
`borrower attributes with each of the respective loan accep-
`
`tance criteria stored in the database to determine any avail­
`The worst case for the borrower occurs when he or she
`
`able loans for the potential borrower. The database also
`
`
`obtains a loan without comparison shopping. This is the
`
`
`
`determines a ranking of best loans among the available loans
`
`result of the borrower having insufficient time to search for
`
`
`of each available 50 depending on the respective loan attributes
`
`information or limited confidence in his or her ability to
`loan.
`
`analyze loan terms when selecting a loan. Searching without
`
`comparison shopping is generally the way potential borrow-
`The present invention can be used to particular advantage
`
`
`
`
`ers with limited financial sophistication obtain loans. This
`when the server terminal is located with one lender, and each
`failure to comparison shop often results in the potential
`
`
`of the at least one potentially available loan is offered by the
`
`
`
`borrower contracting to pay a higher interest rate or accept-55
`
`one lender. Alternatively, the server terminal is located with
`
`ing less favorable terms than possible with comparison
`
`an affiliation of lenders, and each of the at least one
`shopping.
`
`potentially available loan is offered by the affiliation of
`lenders.
`Furthermore, in the prior art, lenders typically are able to
`
`
`
`
`establish and maintain one or only a few set of general loan
`In another aspect of the present invention, a respective
`
`
`
`acceptance criteria. A single set of loan pricing and terms is 60
`
`
`
`lender terminal, for each of a plurality of lenders, is coupled
`offered to all borrowers who satisfy this criteria. Offering
`
`to the global telecommunications network. The respective
`such a limited number of loans requires that all borrowers,
`
`
`lender terminal accepts a respective loan acceptance criteria
`
`
`within such an unsegmented population of borrowers, be
`
`
`
`and respective loan attributes for each loan provided by each
`
`
`
`offered an interest rate and terms that are appropriate for the
`
`
`of the lenders. The respective lender terminal also sends the
`
`
`average borrower within that population. Thus, borrowers 65
`
`
`
`
`respective loan acceptance criteria and the respective loan
`
`
`with below average attributes will be offered interest rates
`
`attributes to the database via the global telecommunications
`
`
`and terms that are too favorable based upon their default
`network.
`
`Petitioner Askeladden - Exhibit 1006 - Page 14
`
`

`
`5,940,812
`
`FIG. 8 shows a display of loan applications in queue for
`
`The following terms have these corresponding definitions
`
`DETAILED DESCRIPTION OF THE
`PREFERRED EMBODIMENT
`
`4
`3
`The ranking of best loans may be determined for each
`
`
`
`
`
`
`loan attribute such as interest rate or origination fee, or this
`
`a particular lender;
`
`
`ranking may be determined from calculating a respective
`FIG. 9 shows a flowchart
`of steps for providing informa­
`composite score from a weighting of the respective loan
`tion to a lender regarding the loan market; and
`loan. The weighting of loan 5
`
`attributes for each available
`
`FIG. 10 shows a display of performance data for existing
`
`attributes may include a respective weighting factor for each
`
`loans having borrowers with specified loan acceptance cri­
`
`
`loan attribute that is a predetermined default value or a
`teria.
`
`
`respective weighting factor that is selected by the potential
`borrower for each loan attribute.
`may include a web-page 10
`In addition, the present invention
`
`that may be downloaded to the consumer terminal for
`
`
`allowing entry of the first portion of the borrower attributes
`in the description:
`
`
`by the potential borrower. A second portion of the set of
`AFFILIATION OF LENDERS: A group of lenders, such
`
`
`borrower attributes may be provided by at least one credit
`
`
`as branches of a bank, banks within a bank holding
`disposed on the server 15
`
`bureau via a credit bureau interface
`
`company, or other lending entities under common own­
`terminal.
`ership or sharing some other association.
`In a further aspect of the present invention, the ranking of
`
`AVAILABLE LOAN: A loan that a lender will offer to a
`
`best loans is displayed to the potential borrower on a screen
`
`
`potential borrower when the given attributes of that
`
`of the consumer terminal via the global telecommunications
`
`borrower satisfy the loan acceptance criteria.
`20
`network.
`
`BORROWER ATTRIBUTES: Information about a poten­
`
`In another aspect of the present invention, the potential
`
`tial borrower contained within the borrower's loan
`
`borrower chooses a selected loan provided by a selected
`
`
`application and credit report that a lender may use to
`
`lender from the ranking of best loans. The data processor
`
`estimate the borrower's default risk, prepayment risk,
`
`then generates a loan application from the borrower
`25
`
`
`
`profitability, or other factors for determining the loan or
`
`
`
`attributes, and sends the loan application via the global
`
`
`loans that should be made available to the borrower.
`
`
`
`telecommunications network to the selected lender for loan
`
`LENDER: A bank, finance company, mortgage bank, or
`approval.
`
`other entity in the business of originating loans.
`The present invention is used to particular advantage by
`
`LOAN: A complete set of loan attributes.
`
`a lender when the present invention sends information via
`network to the lender regard-30 the global telecommunications
`
`LOAN ACCEPTANCE CRITERIA: Attributes the lender
`
`
`requires to be possessed by a potential borrower in
`ing borrower performance for specified loan acceptance
`
`order to make a loan available to that borrower.
`
`criteria. In this aspect, the present invention accepts the
`
`
`specified loan acceptance criteria from the lender. At least
`
`LOAN ATTRIBUTE: Each of the features, including
`
`one credit bureau is contacted to send performance data of
`
`
`pricing, credit limit, and terms associated with a loan.
`already existing loans having borrowers with this specified 35
`
`OFFERED LOAN: A loan that a lender offers to a
`
`loan acceptance criteria. Specified borrower performance
`
`potential borrower.
`
`
`characteristics are calculated and provided to the lender
`PLURALITY OF LENDERS: A group of lenders that are
`
`requesting such information.
`not affiliated in any way other than in their participation
`infor-40 Moreover, the present invention provides a lender
`
`
`
`in the loan market as competitors for loans.
`
`mation regarding loans provided by other lenders also
`SELECTED LOAN: An available
`loan selected by the
`best (i.e., most potential borrower as possessing the
`having similar loan acceptance criteria. Thus, a lender is
`
`
`
`favorable or desirable to the borrower) attribute or
`
`informed of competitive rates in the loan market as provided
`
`by other lenders.
`
`
`
`
`combination of attributes relative to all other available
`of the present 45 These and other features and advantages
`
`loans.
`
`
`invention will be better understood by considering the
`Referring to FIG. 1, a loan origination apparatus of the
`
`
`following detailed description of the invention which 1s
`
`present invention 100 may include a plurality of lender
`
`presented with the attached drawings.
`
`terminals including a first lender terminal102 and a second
`lender terminal 111. The first lender terminal has a first
`BRIEF DESCRIPTION OF THE DRAWINGS
`· ·
`.
`. 50 lender screen
`
`103, and the second lender terminal has a
`f 1
`t
`
`
`
`bl k dFIG 1 h . s ows a oc 1agram o a oan ongma wn
`
`second lender screen 113. Each lender terminal is located
`
`apparatus according to a preferred embodiment of the
`
`
`with a lender using the loan origination apparatus.
`present invention;
`
`The loan origination apparatus typically includes a plu­
`FIG. 2, including FIG. 2Aand FIG. 2B, shows a flowchart
`
`rality of consumer terminals including a first consumer
`
`
`
`of steps in the operation of the loan origination apparatus of
`55 terminal104 and a second consumer terminal
`106. The first
`FIG. 1;
`consumer terminal has a first consumer screen 105, and the
`FIG. 3, including FIG. 3A and FIG. 3B, shows a table of
`
`
`second consumer terminal has a second consumer screen
`
`loan acceptance criteria;
`107. Each consumer terminal is located with a potential
`FIG. 4 shows a table of loan attributes;
`
`borrower using the loan origination apparatus in search of a
`
`
`FIG. 5 shows a borrower loan application form that a
`60 loan. Alternatively, a consumer terminal
`may be located with
`
`potential borrower fills out and sends via the global tele­
`
`a consumer service representative who would submit the
`
`communications network;
`
`
`borrower attribute data for a potential borrower who does
`FIG. 6 shows a ranking of best available loans for a
`not have access to the web page via the global telecommu­
`
`potential borrower;
`
`nications network.
`FIG. 7 shows a display of information regarding a 65
`The lender terminals and the consumer terminals are
`
`
`
`
`selected loan that the potential borrower has chosen from the
`
`
`coupled to a global telecommunications network 108 which
`ranking of best loans;
`
`is the public access network for communication among
`
`Petitioner Askeladden - Exhibit 1006 - Page 15
`
`

`
`5,940,812
`
`5
`6
`
`remotely located computers. A common example of such a
`number of current non-mortgage delinquencies. A "# of
`
`global telecommunications network is the Internet.
`
`30-day mortgage delinquencies in past 24 months" entry
`
`A server terminal109 of the loan origination apparatus is
`
`316, "# of 30-day non-mortgage delinquencies in past 24
`
`also coupled to the global telecommunications network.
`
`
`months" entry 317, "#of 60-day mortgage delinquencies in
`
`This server terminal further includes a database 110 and a 5
`past 24 months" entry 318, "# of 60-day non-mortgage
`data processor 112 coupled to the database and the global
`
`delinquencies in past 24 months" entry 319, "# of 90-day
`
`telecommunications network. The server terminal also
`
`mortgage delinquencies in past 24 months" entry 320, "# of
`
`
`includes a credit bureau interface 114 which is coupled to the
`
`
`90-day non-mortgage delinquencies in past 24 months"
`
`
`
`data processor. The credit bureau interface is also coupled to
`
`entry 321, all result from the lender specifying allowed
`
`
`
`
`at least one credit bureau including a first credit bureau 116 10
`
`minimum and/or maximum numbers of such delinquencies
`
`and a second credit bureau 117.
`that a borrower is allowed to have to qualify for the offered
`
`
`loan. Loan acceptance criteria entries 314 through 321 are
`
`The operation of the loan origination apparatus 100 of
`
`
`related to payment performance of a borrower.
`FIG. 1 is now described with the flowcharts of FIG. 2A and
`
`A "# of charge-offs greater than $250 in the past 24
`FIG. 2B. This operation includes storing into the database
`
`15 months" entry
`
`
`110 a respective loan acceptance criteria for any offered loan
`
`322 results from the lender specifying the
`
`
`
`that is potentially available to a potential borrower (step
`
`allowed minimum and/or maximum numbers of such
`by a borrower. An "any judgments" entry 323
`
`
`202). The respective loan acceptance criteria for an offered
`charge-offs
`
`
`
`loan includes a specification of borrower attributes required
`
`results from the lender specifying whether the borrower can
`to be possessed by the borrower to qualify for that loan.
`
`have a foreclosure, bankruptcy, or other legal proceeding
`
`
`20 judgment. A "years since resolution of bankruptcy" entry
`
`Referring to FIGS. 3A and 3B, a table of loan acceptance
`
`
`
`
`criteria 300 is shown as displayed on a lender screen 350 of 324 results from the lender specifying minimum and/or
`
`
`
`
`
`a lender terminal. Elements of the loan acceptance criteria maximum years since resolution of any bankruptcy for a
`include a "product type" entry 301 which specifies the type
`
`
`borrower. Loan acceptance criteria entries 322 through 324
`
`are related to judgments involving a borrower.
`of the offered loan such as an auto, mortgage, or personal
`
`loan. A "trade area" entry 302 results from the lender 25
`
`A "lien position" entry 325 results from the lender speci-
`
`
`fying allowed minimum and/or maximum numbers of the
`
`specifying the geographic area for this offered loan. The
`
`lien position for a mortgage loan. A "current market value"
`
`lender for example may want to lend only to borrowers
`
`
`entry 326 results from the lender specifying the allowed
`within the state of the lender's location.
`
`A "current years in residence" entry 303 results from the
`
`minimum and/or maximum current market value of the
`
`
`30 collateral of a borrower for a secured loan. A "distribution of
`
`
`lender specifying the allowed minimum and/or maximum
`proceeds" entry 327 results from the lender specifying
`
`years at the current residence. A "required to own home"
`
`whether the loaned money can be used as purchase money
`
`entry 304 results from the lender specifying whether a
`or for refinancing another loan. A "use of property" entry
`
`borrower is required to own a home. A "years with present
`
`328 results from the lender specifying whether the collateral
`
`employer" entry 305 results from the lender specifying
`35 in a secured loan can be used for personal or business use
`
`allowed minimum and/or maximum years with the present
`
`such as for an owner-occupied property vis a vis for a rental
`
`
`
`employer. A "permitted to be self-employed" entry 306
`
`
`property. An "age of collateral" entry 329 results from the
`
`results from the lender specifying whether a borrower can be
`
`
`lender specifying allowed minimum and/or maximum age of
`
`self-employed. A "gross monthly income" entry 307 results
`
`the collateral in a secured loan. Loan acceptance criteria
`
`
`
`from the lender specifying allowed minimum and/or maxi­
`
`40 entries 325 through 329 are related to collateral of a bar-
`
`mum gross monthly income. A "debt/income ratio" entry
`
`308 results from the lender specifying allowed minimum
`rower.
`and/or maximum ratio of the debt to income of a borrower. Finally, a proprietary credit score, such as a "FICO score,"
`
`
`
`
`
`
`
`Loan acceptance criteria entries 303 through 308 are related entry 330 results from the lender specifying an allowed
`
`minimum and/or maximum credit score of a borrower as
`to borrower demographics.
`45
`
`
`typically derived from credit bureau