WO2004034181A2

WO2004034181A2 - System and method for facilitating financial transactions

Info

Publication number: WO2004034181A2
Application number: PCT/US2003/023013
Authority: WO
Inventors: John S. Mcglinn, Iii
Original assignee: End 2 End Loans, Inc.
Priority date: 2002-07-26
Filing date: 2003-07-24
Publication date: 2004-04-22
Also published as: AU2003298528A1; AU2003298528A8; WO2004034181A3

Abstract

A system and method for facilitating financial transactions uses a digital loan file that includes identification information identifying a borrower, financial information associated with the borrower, and credit information associated with the borrower. The information in digital loan file is compared against guidelines of one or more lenders to appropriately grade the borrower and price the lenders' products accordingly. The digital loan file may also be used to 'electronically paper' the loan by including various documentation associated with the loan including one or more of a loan application, a credit report, an appraisal of the collateral, a title, a loan note, a deed, etc. In addition, the digital loan file may be updated from time to time to reflect changes in a status of the borrower and/or determine a market value of the loan.

Description

SYSTEM AND METHOD FOR FACILITATING FINANCIAL TRANSACTIONS

Background Field of the Invention

The present invention relates generally to electronically conducting financial transactions and more particularly to a system and method for electronically originating, processing, and underwriting loans. Discussion of the Related Art

Lending money to a borrower is a complex operation, requiring a significant amount of time and effort to gather information about the borrower and his collateral (if any), to determine whether to make a loan to the borrower based on the information, and to paper the loan once an affirmative decision is made. Gathering information about the borrower can be challenging because the information must be collected from many sources. These sources may include credit bureaus, financial institutions, employers, government agencies including tax and property authorities, etc. Furthermore, the information may exist in many different formats.

Determining whether to make the loan to the borrower can be challenging, particularly when the borrower may only qualify for sub-prime loans. Furthermore, as more and more of today's loans, even the sub-prime ones, are packaged for resale on a secondary market, this determination may involve complex guidelines unique to the lender or to the secondary market for funding those loans.

Papering the loan can be challenging in and of itself. Waiting for third parties to respond with proper documentation and then matching that documentation with the correct loan file may add several days if not weeks to an amount of time required to fund the loan. Many times a loan closing is scheduled only to discover that certain documents are missing or that a loan application is incomplete. This results in a last minute scramble to assemble and finalize the missing documentation. Worse yet, some loans may be funded without having the proper documentation in place making them difficult or impossible to sell on the secondary market.

Various conventional systems exist for facilitating financial transactions such as loan origination. However, these conventional systems are typically limited to a mechanism for electronically generating a loan application, or in some cases, merely a referral or "lead," and providing it to a lender. Once this paperwork is received by the lender, a conventional process is followed for funding the loan.

Other conventional systems allow lenders to compete for a borrower's business by providing quotes to borrowers based on information provided to the lender by the borrower. The borrower then selects one of the lenders based on one of the quotes and applies for the loan in a conventional manner. As above, these systems merely initiate the conventional loan funding process. In these systems, the lender's quotes are based on information provided by the borrower which may or may not be substantiated.

These and other conventional systems still suffer from inherent inefficiencies in the lending process including repeatedly keying information across multiple platforms, human interfaces, and paper files.

What is needed is an improved system and method for facilitating financial transactions.

Summary of the Invention The present invention provides a system and method for facilitating financial transactions that uses a digital loan file that includes identification information identifying a borrower, financial information associated with the borrower, and credit information associated with the borrower. The information in digital loan file is compared against guidelines of one or more lenders to appropriately grade the borrower and price the lenders' products accordingly. The digital loan file may also be used to "electronically paper" the loan by including various documentation associated with the loan including one or more of a loan application, a credit report, an appraisal of the collateral, a title, a loan note, a deed, etc. In addition, the digital loan file may be updated from time to time to reflect changes in a status of the borrower and/or determine a market value of the loan.

This and other aspects of the present invention will become apparent from the following drawings and description. Brief Description of the Drawings

The present invention is described with reference to the accompanying drawings. In the drawings, like reference numbers indicate identical or functionally similar elements. Additionally, the left-most digit(s) of a reference number identifies the drawing in which the reference number first appears.

FIG. 1 illustrates an environment in which various embodiments of the present invention operate.

FIG. 2 illustrates a loan engine according to one embodiment of the present invention. FIG. 3 illustrates an operation of one embodiment of the present invention.

FIG. 4 illustrates a digital loan file according to one embodiment of the present invention.

FIG. 5 illustrates a user interface for viewing the digital loan file according to one embodiment of the present invention. FIG. 6 illustrates a credit management system according to one embodiment of the present invention.

Detailed Description The present invention provides a system and method for facilitating a financial transaction. The following discussion describes various embodiments of the present invention in a context of a mortgage loan as the financial transaction. However, various embodiments of the present invention can operate in the context of other types of loans such auto loans, commercial loans, personal loans, etc., as will become apparent. Furthermore, various embodiments of the present invention can operate in the context other financial transactions as will also become apparent. FIG. 1 illustrates an environment 100 in which various embodiments of the present invention are intended to operate. Environment 100 includes a borrower 120, a loan broker 110, various lenders 140 (illustrated as a lender 140 A, a lender 140B, and a lenders 140C), and at least one third party information source 150.

In environment 100, borrower 120 typically wishes to obtain a loan. As would be apparent, the loan may be secured with a piece of collateral (not illustrated in FIG. 1). Borrower 120 may approach either a lender 140A directly for the loan or work with a loan broker 110 that deals with one or more lenders 140B, 140C. In the former case, borrower 120 interfaces directly with lender 140A in obtaining the loan. As part of this process, lender 140 A collects information from borrower 120 as well as various third party information sources 150. Lender 140 A collects this information primarily to determine whether to fund the loan, and secondarily to properly document or "paper" the loan when a decision to fund the loan is made.

In the latter case, borrower 120 interfaces with one or more lenders 140B,140C indirectly through broker 110 in the loan process. In this case, broker 110 collects information from borrower 120 and attempts to match borrower 120 up with one or more products (i.e., loans) offered by lenders 140B, 140C. Together, broker 110 and/or lenders 140B, 140C may gather additional information from borrower 120 and various third party information sources 150 to assist lenders 140B, 140C in determining whether to fund the loans and paper them accordingly.

FIG. 2 illustrates a loan engine 250 operating in environment 100 in accordance with an embodiment of the present invention. As illustrated in FIG. 2, borrower 120 interfaces with broker 130 to initiate a loan transaction, and broker 130, in turn, interfaces with loan engine 250 as will be discussed in further detail below. In other embodiments of the present invention, borrower 120 may interface directly with loan engine 250 without a broker 130 as will become apparent. According to one embodiment of the present invention, loan engine 250 includes a set of software tools operable on a computer platform as would be apparent. These software tools may include one or more software database tools or spreadsheets as would also be apparent. Loan engine 250 may also include various interfaces as described herein including one or more web-based interfaces for operation in a communications network such as the Internet.

In one embodiment, borrower 120 interfaces with broker 130 to initiate the loan transaction. This interface may include a face-to-face discussion, a telephonic discussion, an email exchange, a facsimile transmission, an on-line automated process, or any other form of interface as would be apparent. Broker 130 gathers information from borrower 120 including various identification information 220 such as a name, an address, a social security number, a driver's license number and/or other forms of identification as well as financial information 290 such as income, assets, expenses, liabilities and/or other forms of financial information associated with borrower 120. In some embodiments, financial information 290 may also include a requested loan amount.

Broker 130 provides this information to loan engine 250. Broker 130 may provide this identification information 220 and financial information 290 to loan engine 250 using various mechanisms including various electronic mechanisms. In one embodiment, broker 130 populates an electronic loan initiation form provided to broker 130 by loan engine 250 (or devices associated therewith) via a browser-enabled interface and a communication network such as the Internet. Other mechanisms exist as would be apparent.

In some embodiments of the present invention, loan engine 250, upon receiving identification information 220 and financial information 290, opens a digital loan file 210. According to various embodiments of the present invention, digital loan file 210 includes information associated with the loan to be made to borrower 120 in an electronic format for access by various parties to the loan transaction including broker 130, borrower 120, lenders 140, etc., during the loan process and in some embodiments of the present invention, after the loan is funded as well.

FIG. 4 illustrates contents of digital loan file 210 according to one embodiment of the present invention. These contents are described in further detail below. In some embodiments of the present invention, digital loan file 210 resides on a storage device 255 to which loan engine 250 is coupled. In other embodiments of the present invention, digital loan file 210 may be an electronic data file that is transmitted among the parties to the loan transaction for processing in a distributed manner or sequential manner as opposed to a centralized manner as would be apparent. According to various embodiments of the present invention, each party to the loan transaction, including various third party service providers, may have access to digital loan file 210. In some embodiments, loan engine 250 may provide different parties to the loan transaction with different levels of access and/or views of digital loan file 210 as would be apparent. In some embodiments, the party who enters or otherwise provides particular content to digital loan file 210 may specify which other parties may view or access that particular content in digital loan file 210.

As illustrated, loan engine 250 may be interfaced to various third party information sources and service providers 150 including, but not limited to credit bureaus, title companies, appraisers, financial institutions, government agencies, as well as other sources of information well known in the financial community. Loan engine 250 may be interfaced to third party information sources 150 in various ways. In some embodiments of the present invention, loan engine 250 includes an interface whereby electronic information can be transmitted back and forth between loan engine 250 and third party information sources 150. These interfaces allow loan engine 250 to request information from any third party information source 150 who in turn, responds with the requested information, typically without human intervention. In some of these embodiments, loan engine 250 may include interfaces for receiving email messages, text messages, voice messages, facsimiles, etc. In connection with these interfaces, loan engine 250 may also include various well-known mechanisms for converting information (e.g., voice recognition systems, character recognition systems, etc.) obtained using these interfaces in an appropriate electronic format for use with and in digital loan file 210. In yet other embodiments, loan engine 250 may include a human interface that receives information from the third party information source and keys, scans, or otherwise enters the information into digital loan file 210.

In some embodiments of the present invention, once digital loan file 210 for borrower 120 has been opened, loan engine 250 automatically requests credit information 280 associated with borrower 120. In some embodiments, loan engine 250 automatically requests credit information 280 once loan engine 250 receives sufficient information from broker 130 to initiate the request (e.g., a name and a social security number of borrower 120, etc.). In other embodiments, loan engine 250 does not automatically request credit information 280 until loan engine 250 receives authorization from broker 130 as would be apparent, for example, in order to comply with applicable fair credit reporting laws.

Loan engine 250 may collect credit information 280 from various credit reporting agencies including, but not limited to, Experian, Equifax, Transunion, etc. In some embodiments of the present invention, loan engine 250 may include an interface for directly pulling electronic credit reports from each or any of these credit reporting agencies as would be apparent. Once collected, loan engine 250 aggregates credit information 280 with the other information already in digital loan file 210. In some embodiments of the present invention, loan engine 250 may store credit information 280 along with a date on which it was collected or similar indicia from which an age of credit information 280 can be determined. In these embodiments, loan engine 250 checks this date upon receiving a subsequent request to collect credit information 280 (e.g., pull another credit report) to determine whether credit information 280 is stale according to various industry or lender standards (e.g., more than 30 days old, etc.). If credit information 280 is stale, new credit information 280 is collected from the various credit reporting agencies and provided in response to the request; otherwise the stored credit information 280 is provided. This alleviates a problem associated with the credit reporting industry whereby a "credit score" of borrower 120 is negatively impacted each time a credit report is pulled.

In some embodiments of the present invention, loan engine 250 may collect title information 260 associated with a piece of collateral (e.g., house, real property, automobile, boat, etc.) offered by borrower 120 to secure the loan. Loan engine 150 may collect title information 260 from various title companies, on-line or otherwise, as well as various governmental agencies (e.g., county or state record offices, etc.). In some embodiments of the present invention, loan engine 150 may include electronic interfaces for directly receiving title information from these title companies and/or government agencies as would be apparent. Once collected, loan engine 250 aggregates title information 260 with the other information already in digital loan file 210.

In some embodiments of the present invention, loan engine 250 may collect appraisal information 270 associated with the piece of collateral offered by borrower 120 to secure the loan. Loan engine 150 may collect appraisal information 260 from various appraisers, on-line or otherwise, as well as industry-recognized guides (e.g., Kelley Blue Book, etc.). In some embodiments of the present invention, loan engine 150 may include electronic interfaces for directly receiving appraisal information from these appraisers and/or guides as would be apparent. Once collected, loan engine 250 aggregates appraisal information 270 with the other information already in digital loan file 210. In other embodiments of the present invention, loan engine 250 may collect other information associated with borrower 120, and/or its collateral, from various other entities as would be apparent. This information may include, but is not limited to, flood information, tax certifications, income tax, escrow information, bankruptcy information, divorce degrees, judgments, liens, etc.

As discussed above, loan engine 250 collects and aggregates information from various third party information sources 150 into digital loan file 210. This information may be subsequently used to determine whether to make the loan to borrower 120. In some embodiments of the present invention, loan engine 250 automatically performs certain calculations using information in digital loan file 210 to determine various loan metrics (illustrated as loan metrics 430 in FIG. 4) to assist lenders 140 in making the loan. Loan metrics 430 may include a credit score 430 associated with borrower 120, a credit-to-income ratio associated with borrower 120, a loan-to-value ratio associated with the collateral of borrower 120, a monthly payment associated with the loan, a net cashflow of borrower 120 and/or any other measures of the credit worthiness or risk measure associated with borrower 120 in making the loan. In one embodiment of the present invention, loan engine 250 computes a tri- merge credit score for borrower 120. The tri-merge credit score represents a combination of information from three industry-standard credit reporting bureaus. As is well known, credit reporting bureaus generate a credit score unique to themselves for each borrower 120 in their respective databases. Various "facts" effect this credit score as is also generally well known. However, each credit reporting bureau weighs these facts differently. In one embodiment of the present invention, the tri-merge credit score represents a weighted average of the individual credit scores from the credit reporting bureaus based on information included in the respective credit reports.

Loan engine 250 uses the information in digital loan file 210 and any of the computed measures discussed above, collectively referred to as a "profile" of borrower 120, to determine which of lenders 140 might make the loan to borrower 120. Loan engine 250 compares the profile of borrower 120 with various lending guidelines 240, some of which may be provided by lender 140 to loan engine 250. As is generally well known, each lender 140 advertises or otherwise provides brokers and/or consumers with information or "guidelines" regarding its products (i.e., loans). As is also generally well known, other guidelines generally applicable to all lenders 140 may be included in loan engine 250. hi general, these guidelines often include a term of loan (generally in months), an interest rate, a maximum/minimum amount associated with the loan, etc., as well as various qualification parameters for specifying which type of borrower 120 qualifies for each product offered by lenders 140. The guidelines may also specify which third party information sources 150 are preferred, which types of information are required to complete the loan transaction depending on the profile of borrower 120, the nature of its collateral, etc.

Each lender 140 may in effect, offer hundreds of products to borrowers 120, making the process of matching a particular product to a particular borrower 120 difficult, particularly for brokers 130. Other lenders 140 may only offer products to certain types of borrowers 120. For example, a lender 140B may only underwrite "C" paper and then only to those borrowers whose income level exceeds a certain threshold. According to the present invention, these guidelines 240 include sufficient informational thresholds such that lenders 140 will make loans in due course (and subject to conditions specified in guidelines 240 as would be apparent) to borrowers 120 who meet these guidelines 240. In some embodiments of the present invention, loan engine 250 receives these guidelines 240 periodically (i.e., hourly, daily, weekly, monthly, etc.) from lenders 140 and stores them in storage device 255 for use as needed. In other embodiments of the present invention, loan engine 250 receives guidelines 240 from lenders 140 in response to a request made by loan engine 250. Loan engine 250 compares the profile in digital loan file 210 against guidelines 240 from lenders 140 to determine which lenders 140 may have products available to borrower 120. Loan engine 250 identifies these products for broker 130 so that, in effect, lending determinations can be made at a "point-of-sale."

In some embodiments of the present invention, loan engine 250 uses these guidelines to determine a "grade" for the profile in digital loan file 210 and a "price" associated with an appropriate product(s) from one or more of lenders 140. This so- called "grading and pricing" information from various lenders 140 may be displayed to borrower 120 and/or broker 130 to assist in identifying an appropriate loan. In some embodiments, this grading and pricing information may include limitations associated with the product including unacceptable derogatories, maximum loan amount, minimum credit score, etc. In some embodiments, this grading and pricing may also include a breakdown of those factors affecting the grade including bankruptcy, major derogatories, mortgage status, mortgage history, credit, etc.

In some embodiments, a best product for the loan request may be identified (i.e, cheapest long term, cheapest short term, shortest time to fund, least amount of out- of-pocket expenses, least amount of documentation, etc.) by loan engine 250. In some embodiments, alternative products may be identified as well, for example, for purposes of comparison. In addition to identifying one or more products from lenders 140, loan engine 250 may also provide payments and resulting debt ratios associated with each product. In some embodiments of the present invention, additional price incentives provided by lender 140 and/or broker 130 may be incorporated into the grading and pricing information as would be apparent.

Certain aspects of the profile included in digital loan file 210 may be problematic for borrower 120 in obtaining the loan. For example, certain health or medical-related late or unpaid debts may appear in a credit report of borrower 120 and negatively impact its profile. As is well known, these and other types of debts are included in credit reports, but in practice, have little impact on lending determinations. In addition, certain debts with high payments and/or low balances may be prepaid thereby improving a monthly cash flow of borrower 120 and thus improving the grade of the profile in digital loan file 210. As is also well known, certain debts such as certain liens on the collateral must also be paid prior funding the loan. Discrepancies appearing in credit reports may also negatively impact the profile of borrow 120. Examples of these discrepancies may include payment/billing disputes, canceled or unused credit cards, etc. As is well known, these discrepancies are often excluded by lender 140 from any subsequent lending determinations when an appropriate explanation is provided by borrower 120. In .various embodiments of the present invention, loan engine 250 allows broker 130 to modify, exclude, or conditionally exclude these types of information in digital loan file 210, using for example, a "debts and disbursements" page in digital loan file 210. From this page in digital loan file 210, broker 130 can modify the debt (e.g., a discrepancy in the credit report), exclude certain debt (e.g., identify it as a medical debt) and/or conditionally exclude certain debts (e.g., identify debts that will be paid prior to closing). Once broker 130 has made the appropriate adjustments to the debts and disbursements, loan engine 250 subsequently regenerates the profile and compares the new profile against guidelines 240 for re-grading and/or re-pricing. In some embodiments of the present invention, these modifications (illustrated as modifications 426, modifications 496, modifications 486, modifications 466, and modifications 476 in FIG. 4) and/or discrepancies (illustrated as discrepancies 427, discrepancies 497, discrepancies 487, discrepancies 467, and discrepancies 477 in FIG. 4) are stored in digital loan file 210 for tracking purposes as would be apparent.

A low appraisal value may also detrimentally effect the profile of borrower 120. As is also well known, lenders 140 have certain discretion in adjusting a low appraisal value in certain markets. In some embodiments of the present invention, loan engine 250 allows broker 130 to adjust a low appraisal within a certain range or set of conditions so that borrower 120 may qualify for certain products. In some embodiments of the present invention, these adjustments are stored in digital loan file 210 for tracking purposes as would be apparent.

In some embodiments of the present invention, loan engine 250 also collects various documentation (illustrated as documentation 225, documentation 295, documentation 285, documentation 265, and documentation 275 in FIGS. 2 and 4) that verifies or otherwise supports any of the information aggregated into digital loan file 210. For example, identification documentation 225 for supporting identification information 220 may include a photocopy or scanned image of a drivers license or passport of borrower 120; financial documentation 295 for supporting financial information 290 may include a bank statement, an employer's check stub, or tax records of borrower 120; credit documentation 285 for supporting credit information 280 may include a credit report pulled on behalf of borrower 120; title documentation 265 for supporting title information 260 may include evidence of a title search provided by the title company or government agency of the collateral offered as security by borrower 120; and appraisal documentation 275 for supporting appraisal information 270 may include the appraisal provided by the appraiser. In each instance, this documentation is aggregated into or appended with digital loan file 210 to assist lenders 140 as necessary in making the loan to borrower 120. This documentation may correspond to the information originally received from third party information sources 150 and aggregated into digital loan file 210 or may be additional information provided by either borrower 120 and/or third party information source 150 in support of the information in digital loan file 210.

In some embodiments of the present invention, once loan engine 250 has identified products offered by lenders 140 for which a particular borrower 120 qualifies, loan engine 250 provides digital loan file 210 associated with the particular borrower 120 to each or any of the lenders 140 either automatically, or as directed by borrower 120 and/or broker 130. This may be accomplished in various ways. In one embodiment of the present invention, loan engine 250 provides digital loan file 210 to lender 140 by granting lender 140 access to digital loan files 210 associated with borrowers 120 who meet guidelines 240. In other embodiments of the present invention, digital loan file 210 may be electronically delivered to lender 140

(transferred via email, on a storage device via mail, etc.). In addition, in various embodiments of the present invention, loan engine 250 may notify lender 140 of the existence of digital loan file 210 using various mechanisms including, but not limited to, email, voicemail, pager, WAP devices, etc., as would be apparent. In some embodiments of the present invention, once loan engine 250 has identified a product offered by a lender 140 for which a particular borrower 120 qualifies, loan engine 250 may automatically populate a loan application form with information from digital loan file 210. The loan application form may be an industry standard loan application form, such as a "1003 form," or a lender specific loan application form, or a combination of the two. In these embodiments of the present invention, loan engine 250 advantageously uses information available from digital loan file 210 rather than requiring a person (broker 130, borrower 120, lender 140, etc.) to re-key this information. In some embodiments of the present invention, loan engine 250 may permit borrower 120 to digitally sign the loan application form while in other embodiments, loan engine may generate a "hard-copy" of any loan application for execution by borrower 120. In any case, loan engine 250 may include an electronic copy of the executed loan application forms in digital loan file 210 (illustrated as application 441 as part of loan documents 440 in FIG. 4).

In some embodiments of the present invention, once the loan application forms have received final approval from lender 140, loan engine 250 may automatically commence with generating and populating various legal documents associated with the loan to be made by lender 140 to borrower 120. These legal documents may include a note, a deed, mortgage, etc., as well as any Truth-In-Lending forms or other required notices. As with loan applications forms, various embodiments of the present invention may provide for execution of these legal documents with digital signatures and/or handwritten signatures. In any case, loan engine 250 may include an electronic copy of the signed legal documents in digital loan file 210 (illustrated as legal 442 as part of loan documents 440 in FIG. 4).

In some embodiments of the present invention, a loan status 410 (as illustrated in FIG. 4) is maintained in digital loan file 210. Loan status 410 may include various indicia appropriate to one or more parties to the loan transaction and may be maintained and/or presented accordingly. Loan status 410 may identify the loan as, for example, a new lead, a conditionally approved loan, an approved loan, a funded loan, a paid-off loan, a foreclosed loan, etc. Loan status 410 may also identify the presence or absence of any information or documentation in digital loan file 210. Loan status may also include a checklist for one or more of the parties to the loan transaction identifying action items that must be completed or information/documentation that must be received prior to closing.

An operation of loan engine 250 according to one embodiment of the present invention is now described with reference to FIG. 3. In an operation 310, loan engine 250 receives identification information 220 associated with borrower 120. In an operation 320, loan engine 250 receives financial information 290 associated with borrower 120.

In an operation 330, loan engine 250 collects credit information 280 associated with borrower 120. Credit information 280 may be collected in part from borrower 120 and/or in part from a credit reporting bureau. In some embodiments of the present invention, the operator may direct loan engine 250 to pull a credit report. In other embodiments, loan engine 250 automatically pulls the credit report once sufficient information is received from operations 310, 320.

In an optional operation 340, loan engine 250 may receive title information 260 associated with collateral offered by borrower 120 to secure the loan. In some embodiments of the present invention, the operator may direct loan engine 250 to generate a title request. In other embodiments, loan engine 250 automatically generates a title request at a predetermined time prior to closing and after the loan is approved. In still other embodiments, loan engine 250 automatically generates the title request in accordance with guidelines 240 specified by lender 140. In yet still other embodiments, borrower 120 may provide broker 130 or lender 140 with the title that is subsequently provided to loan engine 250. In an optional operation 350, loan engine 250 may receive appraisal information 270 associated with collateral offered by borrower 120 to secure the loan. In some embodiments of the present invention, the operator may direct loan engine 250 to generate an appraisal request. In other embodiments, loan engine 250 automatically generates an appraisal request at a predetermined time prior to closing and after the loan is conditionally approved. In still other embodiments, loan engine 250 automatically generates the appraisal request in accordance with guidelines 240 specified by lender 140. In yet still other embodiments, borrower 120 may provide broker 130 or lender 140 with the appraisal that is subsequently provided to loan engine 250. As indicated by an operation 360, loan engine 250 aggregates information as it is collected into a digital loan file 210. Loan engine 250 uses the aggregated information to generate various loan metrics 430 that ultimately form the profile of borrower 120. In an operation 370, the aggregated information is compared with guidelines 240 of lenders 140 to determine which lenders 140 have appropriate products for borrower.

In an operation 380, loan engine 250 provides digital loan file 210, or indicia notifying its existence, to lenders 140. In some embodiments, loan engine 250 only provides digital loan file 210 to those lenders 140 whose guidelines 240 are met by borrower 120. In some embodiments of the present invention, loan engine 250 includes an interface to digital loan file 210 in a form similar to loan documents present in the market place such as that, for example, provided by FANNIE MAE. The FANNIE MAE form may be populated using information from digital loan file 210 in accordance with well known techniques. As would be apparent, each lender 140 may provide loan engine 250 with its forms for displaying information from digital loan file 210.

In other embodiments of the present invention, loan engine 250 includes a loan file view interface 500 such as that illustrated in FIG. 5. Loan file view interface 500 resembles physical loan files used conventionally by lenders 140. In some embodiments, loan file view interface 500 is provided via a web-browser to the user (borrower 120, broker 130, lender 140, third party information sources 150, etc.). Loan file view interface 500 includes a header 510, a left-hand view 530 and a right-hand view 560. Header 510 may include various information identifying and associated with digital loan file 210, borrower 120, lender 140, broker 130, etc. Header 510 may also include a presentation of various loan metrics 430.

Left-hand view 530 includes access to information in digital loan file 210 (e.g., via hyperlinks, etc.) that would appear on a left-hand side of a conventional loan file. Right-hand view 560 similarly includes access to information in digital loan file 210 (e.g., via hyperlinks, etc.) that would appear on a right-hand side of the conventional loan file. Either side 530, 560 may also include selections for initiating certain actions associated with the loan. Either side 530, 560 may also include indicia of status 410 associated with the loan. Other information from digital loan file 210 may be included or accessed from loan file view interface 500 as would be apparent.

The following paragraphs provide examples of the contents of left-hand view 530 and right-hand view 560. These examples are provided for purposes of illustration rather than limitation. Left-hand view 530 may include a title/closing agent portion 532 including access to a certified copy of escrow instructions, a preliminary ALTA, a title commitment, a survey coverage and/or plat map, a hazard insurance policy, a E&O insurance policy, an insured closing protection letter, an approval of closing settlement agent, wire instructions, a certified copy of a final HUD-1 statement, etc. Title/closing agent portion 532 may also include status indicia for any of these _ documents indicating their presence/absence in digital loan file 210. Title/closing agent portion 532 may also include selections for initiating actions including one that directs loan engine 250 to request a title.

Left-hand view 530 may also include an appraisal portion 534 including access to a copy of an appraisal, an AVM, a list of comps and reports, a property comparison, etc. Appraisal portion 534 may also include status indicia for any of these documents indicating their presence/absence in digital loan file 210. Appraisal portion 534 may also include selections for initiating actions including one that directs loan engine 250 to order an appraisal, to review the appraisal after its receipt, etc.

Left-hand view 530 may also include an 72-hour broker compliance portion 536 including access to a good faith estimate (GFE), a Federal Truth-in-Lending form (TIL), a Equal Credit Opportunity Act (ECOA) notice, a Fair Lending notice, a Right to Copy of Appraisal notice, any state specific documents, etc. 72-hour broker compliance portion 536 may also include status indicia for any of these documents indicating their presence/absence in digital loan file 210 and/or their communication to borrower 120.

Left-hand view 530 may also include a lender review and modifications portion 538 including access to a lender satisfactory quality control review form, verbal communications verifying employment, approval of broker by lender, etc. Lender review and modifications portion 538 may also include status indicia for any of these documents indicating their presence/absence in digital loan file 210. Lender review and modifications portion 538 may also include selections for initiating actions including one that directs loan engine 250 to request a flood certification, etc. Left-hand view 530 may also include a loan document portion 538 including selections for initiating a review of signed loan documents.

Right-hand view 560 may include an internal worksheets portions 562 including access to grading and pricing results, a list of debts and disbursements, etc. Internal worksheets portion 562 may also include status indicia for any of these worksheets indicating their presence/absence in digital loan file 210. Internal worksheets portion 562 may also include selections for initiating actions including one that prints a conditional loan approval and/or one that generates a return fax cover sheet, etc.

Right-hand view 560 may also include a loan application portion 564 including access to a loan application for borrower(s) 120, credit report(s), borrowers signature/consent, reasons for loan letter(s), etc. Loan application portion 564 may also include status indicia for any of these worksheets indicating their presence/absence in digital loan file 210. Loan application portion 564 may also include selections for initiating actions including credit pulls, edits to loan application, etc. Right-hand view 560 may also include a credit clarification and explanation portion 566 including access to conditions to fulfill a bankruptcy, conditions for a major derogatory, conditions for consumer debt, credit explanation letters, etc. Credit clarification and explanation portion 566 may also include status indicia for any of these conditions indicating their presence/absence in digital loan file 210.

Right-hand view 560 may include a mortgage conditions and documents portion 568 including access to conditions for foreclosure, conditions for mortgage 5 status, conditions for mortgage payment, verification of mortgage (VOM) or verification of rent (VOR). Mortgage conditions and documents portion 568 may also include status indicia for any of these indicating their presence/absence in digital loan file 210.

Right-hand view 560 may include a financial/income conditions and

10 documents portion 570 including access to verifications of employment (VOE), pay check stubs, W-2's for preceding year(s), state and federal tax returns, bank statements, etc. Financial/income conditions and documents portion 570 may also include status indicia for any of these indicating their presence/absence in digital loan file 210.

After a loan from one of lenders 140 is made to borrower 120, digital loan

15 file 210 may also be used in subsequent transactions of that loan on the secondary market. As described above, the loan is initially funded based on the guidelines of the lender 140, which in turn are based at least in part on requirements imposed by the secondary market. Using digital loan file 210, lender 140 may compare the retail value of the loan with offers from buyers on the secondary market in order to determine the

20 best secondary market buyer or placement strategy.

In some embodiments of the present invention, information in digital loan file 210 may be updated at various intervals after funding. This information may be updated periodically, for example as payments are made, on a monthly or quarterly basis, at some reporting period, etc. This information may also be updated in

25. anticipation of a subsequent transaction on the secondary market or other event as would be apparent.

In some embodiments of the present invention, any of information in digital loan file 210 may be updated in order to dynamically determine a value of the underlying loan at any point in time. For example, after a track record of making

30 payments on time, borrower 120 may qualify from upgrading from "C" paper to "B" paper thereby making the underlying loan more valuable on the secondary market. Conventionally, this increase in valuation is difficult, if not impossible to accurately determine and/or capture. Digital loan file 210 allows the owner of the loan to determine the value of the loan at any point in time so that any potential increases can be captured. These embodiments of the present invention have great implications for loan pool management. In conventional loan pools, loans of several borrowers 120 are aggregated and sold on the secondary market as a single unit. During the aggregation process, various expectations in terms of average return and average duration are determined in order to price the loan pool. One problem associated with loan pools occurs when interest rates fall. When interest rates fall, some borrowers 120 may refinance their loans with other lenders. This eliminates that loan from the loan pool thereby reducing both the expected return and the expected duration of the loan pool. Using updated information in digital loan file 210 for each of the loans in the loan pool in accordance with various embodiments of the present invention, a loan pool manager may offer to reduce the interest rate of one or more of the loans (particularly those where the risk of the loan being refinanced is assessed as high) in an effort to maintain the loan(s) in the loan pool. Effecting the reduction in interest rate may be as simple as, for example, pulling a credit report, verifying income, and recasting the note, all of which may be readily accomplished at very low cost through loan engine 250 and digital loan file 210. Pool managers may also use digital loan files 210 to determine a value of a particular loan pool or portion thereof. Conventionally, rather than purchasing the loan pool outright, a potential buyer uses a team of analysts to manually evaluate each loan in the pool to determine whether or not to purchase that particular loan based on a set of criteria or guidelines associated with the buyer. Not knowing which of the loans the buyer will agree to purchase makes pricing the loan pool problematic. For example, a price offered by a buyer notorious for only purchasing the most desirable loans in the, . loan pool may not be as attractive as a lower price offered by a buyer known for purchasing the majority of the loan pool.

According to some embodiments of the present invention, digital loan files 210 for the loans in the loan pool may be used in conjunction with loan engine 250 to assess a price of the individual loans as well as a price for the selected loans in the aggregate. Furthermore, in some embodiments of the present invention, the guidelines associated with the buyer may be applied against digital loan files 210 for each of the loans in the loan pool to prepackage and price the loan pool (or portion thereof) to that buyer. These embodiments eliminate the pricing problems of the seller, while simultaneously reducing the manual aspect of the transaction borne by the buyer. The principles of the present invention may be extended in various embodiments beyond the context of digital loan file 210 to a complete financial picture of a person. In these embodiments, digital loan file 210 is extended to a financial wallet 610 as illustrated in FIG. 6. In these embodiments of the present invention, financial wallet 610 includes a dynamically updated representation of various financial aspects associated with a person or entity 650. These financial aspects may include any of the information described above with regard to digital loan file 210 as well as: 1) financial information such as investment information, savings information, consumer purchasing information, income tax records, insurance information, etc.; 2) demographic information such as age, sex, marital status, health status, height, weight, number of children, interests, hobbies, etc.; 3) career information such as level of education, job description, current position, number of recent promotions, number of job changes, identify of employer, etc.; and 4). Financial wallet 610 represents a clear depiction of a financial state of person 650 as possible or as required in various embodiments to instantaneously assess person 650 in the context of any financial transaction. According to the present invention, financial wallet 610 interfaces with a credit management system ("CMS") 620 to assist various financial institutions 690 including mortgage lenders 140, auto lenders 640, consumer credit lenders 660, private debt lenders 680 (e.g., orthodontists, plastic surgeons, etc.), or other financial institutions in making financial decisions regarding person 650. As illustrated, CMS 620 gathers information from various financial sources 630 including title companies 260, credit bureaus 280, income sources 290, valuations sources 270, auxiliary sources 632 (e.g., IRS, bankruptcy, divorce, etc.), as well as various other sources of information associated with person 650. CMS 620 also gathers information from financial institutions 690 in the form of lending guidelines, marketing profiles, etc., to update the rules for decision making. CMS 620 uses the information from sources 630 and from financial institutions 690 whenever a financial decision regarding person 650 needs to be made. Effective flow of information among information sources 630, financial institutions 690 and financial wallet 610 via CMS 620 provide an efficient and timely mechanism for financial decision making with respect to person 650.

In some embodiments of the present invention, CMS 620 may also gather market information such as stock market indices, interest rates, unemployment rates, trade deficits, or other market measures. CMS 620 may compare this market information with information from financial wallet 610 to ascertain trends in the financial state of person 610 relative to market information in order to assist financial institutions 690 in making better financial decisions. By way of example, and not limitation, decisions to fund a loan to a steel worker may depend at least in part on a cyclical nature of the steel industry, whether that industry is presently expanding or contracting, the historical performance of the financial state of similarly situated steel workers, and the historical performance of the financial state of the particular steel worker under similar conditions.

Various aspects of the present invention provide a platform for commercial activity among businesses, for example, the sale of loans on the secondary market.

Various aspects of the present invention also provide a platform for commercial activity between a business and a consumer, for example, the loan origination and funding process. Other platforms for commercial activity may also exist as will become from reading the above detailed description. While various embodiments of the present invention have been described above, it should be understood that they have been presented by way of example only, and not limitation. Thus, the breadth and scope of the present invention should not be limited by any of the above-described exemplary embodiments, but should be defined only in accordance with the following claims and their equivalents. - ~ The previous description of the preferred embodiments is provided to enable any person skilled in the art to make or use the present invention. While the invention has been particularly shown and described with reference to preferred embodiments thereof, it will be understood by those skilled in the art that various changes in form and details may be made therein without departing from the spirit and scope of the invention.

Claims

What is claimed is:

1. A method for providing information to a plurality of lenders, the information associated with a prospective loan to a borrower, the method comprising: collecting identification information identifying the borrower; collecting financial information associated with the borrower; automatically collecting credit information from a credit reporting agency about the borrower based at least in part on said collected identification information; aggregating said financial information, said identification information, and said credit information into a digital loan file; and providing said digital loan file to the plurality of lenders.

2. The method of claim 1, further comprising appending electronic documentation to said digital loan file, said electronic documentation supporting at least one of said identification information, said financial information, and said credit information, said electronic documentation having been converted into a digital format.

3. The method of claim 1 , further comprising: comparing said aggregated information against each of the plurality of lenders' lending guidelines; and wherein said providing said digital loan file to the plurality of lenders comprises providing said digital loan file only to those of the plurality of lenders whose lending guidelines are met.

4. The method of claim 1, wherein said digital loan file includes sufficient information for at least one of the plurality -of lenders to provide a loan to the borrower.

5. The method of claim 1, wherein said automatically collecting credit information from a third party comprises automatically collecting credit information from a plurality of third parties.

6. The method of claim 5, further comprising generating a combined credit score from said credit information collected from each of said plurality of third parties.

7. The method of claim 1, further comprising allowing said credit information from said third party to be modified.

8. The method of claim 7, wherein said aggregating said financial information, said identification information, and said credit information into a digital loan file comprises aggregating said financial information, said identification information, and said modified credit information into said digital loan file.

9. The method of claim 7, wherein said aggregating said financial information, said identification information, and said credit information into a digital loan file comprises aggregating said financial information, said identification information, and indicia of said modified credit information into said digital loan file.

10. The method of claim 1 , further comprising automatically collecting title information from a title service regarding collateral for the prospective loan.

11. The method of claim 10, wherein said aggregating said financial information, said identification information, and said credit information into a digital loan file comprises aggregating said financial information, said identification information, said credit information, and said title information into said digital loan file.

12. The method of claim 11, further comprising appending title documentation to said digital loan file, said title documentation converted to a digital format, said title documentation supporting said title information.

13. The method of claim 1, further comprising automatically collecting appraisal information from an appraiser regarding collateral for the prospective loan.

14. The method of claim 13, wherein said aggregating said financial information, said identification information, and said credit information into a digital loan file comprises aggregating said financial information, said identification information, said credit information, and said appraisal information into said digital loan file.

15. The method of claim 14, further comprising appending appraisal documentation to said digital loan file, said appraisal documentation converted to a digital format, said appraisal documentation supporting said appraisal information.

16. The method of claim 13, further comprising allowing said appraisal information from said appraiser to be modified.

17. The method of claim 1, wherein said aggregating said financial information, said identification information, and said credit information into a digital loan file comprises aggregating said financial information, said identification information, and said credit information into a first digital loan file in a preferred format of a first of the plurality of lenders, and aggregating said financial information, said identification information, and said credit information into a second digital loan file in a preferred format of a second of the plurality of lenders; and wherein said providing said digital loan file to the plurality of lenders comprises forwarding said first digital loan file to said first of the plurality of lenders and providing said second digital loan to said second of the plurality of lenders.

18. A digital loan file comprising: an aggregation of identification information identifying a borrower, financial information associated with the borrower, and credit information obtained from a credit reporting agency; and electronic documentation supporting at least one of said identification information, said financial information, and said credit information, said electronic documentation having been converted into a digital format, wherein said aggregation has been successfully compared against underwriting guidelines of each of a plurality of lenders.

19. The digital loan file of claim 18, further comprising modified credit information.

20. The digital loan file of claim 18, further comprising appraisal information obtained from an appraiser.

21. The digital loan file of claim 20, further comprising electronic appraisal documentation supporting said appraisal information.

22. The digital loan file of claim 18, further comprising title information obtained from a title service.

23. The digital loan file of claim 22, further comprising electronic title documentation supporting said title information.

24. The digital loan file of claim 18, wherein said credit information comprises credit information obtained from each of a plurality of credit reporting agencies.

25. The digital loan file of claim 24, further comprising a combined credit score generated from said credit information obtained from each of said plurality of credit reporting agencies.

26. The digital loan file of claim 18, further comprising a status chart associated with a status of a prospective loan to the borrower.

27. The digital loan file of claim 26, further comprising event documentation associated with a completed event in said status chart.

28. The digital loan file of claim 18, further comprising a conversation log recording remarks made by one of a broker, a lender, and an underwriter.

29. A method for determining grading and pricing information associated with a prospective loan to a borrower, the method comprising: collecting identification information identifying the borrower; collecting financial information associated with the borrower; collecting credit information from a credit reporting agency about the borrower based at least in part on said collected identification information; identifying those products for which the borrower qualifies based on said financial information, said credit information, and guidelines associated with at least one product offered by each of a plurality of lenders.

30. The method of claim 29, further comprising aggregating said financial information and said credit information into a digital loan file.

31. The method of claim 29, further comprising collecting said guidelines associated with said at least one product offered by each of said plurality of lenders.

32. The method of claim 29, further comprising: allowing an adjustment to at least one of said credit information and said financial information; and identifying other products for which the borrower qualifies based on said adjustment and said guidelines.

33. The method of claim 29, further comprising determining a grade for the borrower based on said financial information and said credit information, wherein said identifying those products for which the borrower qualifies comprises identifying those products for which the borrower qualifies based on said grade, said financial information, said credit information, and said guidelines.

34. The method of claim 29, further comprising determining a grade for the borrower based on said financial information, said credit information, and said guidelines.

35. The method of claim 34, further comprising: allowing an adjustment to at least one of said financial information and said credit information; and determining a new grade for the borrower based on said adjustment.

36. The method of claim 35, wherein said identifying those products for which the borrower qualifies comprises identifying those products for which the borrower qualifies based on said new grade, said adjustment, and said guidelines.

37. The method of claim 29, further comprising determining a price for said identified products based on said financial information, said credit information, and said guidelines.

38. The method of claim 37, further comprising: allowing an adjustment to at least one of said financial information and said credit information; and determining a new price for said identified products based on said adjustment.

39. The method of claim 37, further comprising: identifying other products for which the borrower qualifies based on said adjustment and said guidelines; and determining a price for said identified other products.

40. The method of claim 32, further comprising requiring verification information from the borrower that supports said adjustment.

41. The method of claim 35, further comprising requiring verification information from the borrower that supports said adjustment.

42. The method of claim 38, further comprising requiring verification information from the borrower that supports said adjustment.

43. A method for obtaining grading and pricing information from a loan engine with respect to a borrower for at least one product offered by each of a plurality of lenders, the method comprising: providing identification information to the loan engine that identifies the borrower; providing financial information associated with the borrower to the loan engine; receiving grading and pricing information from the loan engine regarding products for which the borrower qualifies based on said financial information, a credit report for the borrower obtained by the loan engine, and guidelines obtained by the loan engine and associated with the at least one product offered by each of the plurality of lenders.

44. The method of claim 43, further comprising: providing adjustment information to the loan engine with regard to information in said credit report; and receiving new grading and pricing information from the loan engine regarding products for which the borrow qualifies based on said financial information, said credit report, said adjustment information, and said guidelines.

45. The method of claim 44, wherein said providing adjustment information to the loan engine comprises characterizing a debt that appears in said credit report as one not considered by at least one of the plurality of lenders.

46. The method of claim 44, wherein said providing adjustment information to the loan engine comprises characterizing a debt that appears in said credit report as one in which a dispute exists between the borrower and the creditor.

47. The method of claim 44, wherein said providing adjustment information to the loan engine comprises characterizing a debt that appears in said credit report as one that will be paid prior to closing.

48. The method of claim 44, further comprising providing documentation to the loan engine that supports said adjustment information.

49. The method of claim 44, wherein said providing adjustment information to the loan engine comprises characterizing a debt that appears in said credit report as one in which a dispute exists between the borrower and the creditor.

50. A method for determining a price of a loan pool comprised of a plurality of loans made to a corresponding plurality of borrowers, the method comprising: updating information included in a digital loan file associated with each of the plurality of loans in the loan pool, wherein original information in said digital loan file formed a basis upon which each of the plurality of loans in the loan pool was made to the corresponding plurality of borrowers; and computing a market price for each of the plurality of loans in the loan pool based at least in part on said updated information.