Automated loan evaluation system

Abstract

Disclosed is a system and method of creating a probability of delinquency database using historical loan data and a plurality of loan factors, for use in determining a loan rate, the method comprising: identifying a plurality of multi-level loan factors; creating a pool from the historic loan data, wherein the first pool contains records relating to the plurality of multi-level loan factors; separating the pool into a set of groups based on the multi-level loan factors, calculating a probability of delinquency for each group; and arranging the probability of delinquency for each group into a database such that the probability of delinquency for each group is accessible for any combination of multi-level loan factors. Also disclosed is a system and method of determining the loan rate for a loan for a borrower based on the probability of delinquency database.

1 . A method of creating a probability of delinquency database using historical loan data and a plurality of loan factors, for use in determining a loan rate, the method comprising: 
 (a) identifying a plurality of multi-level loan factors;    (b) creating a first pool from the historic loan data, wherein the first pool contains records relating to the plurality of multi-level loan factors;    (c) identifying a significant multi-level loan factor from the plurality of multi-level loan factors;    (d) separating the first pool into a plurality of subpools based on levels of the significant multi-level loan factor;    (e) separating each subpool of the plurality of subpools into a plurality of groups based on a second plurality of multi-level loan factors, wherein the second plurality of multi-level loan factors does not include the significant multi-level loan factor;    (f) calculating a probability of delinquency for each group; and    (g) arranging the probability of delinquency for each group into a database such that the probability of delinquency for each group is accessible for any combination of multi-level loan factors.    
   
   
       2 . The method of  claim 1 , wherein the multilevel loan factors are selected from the group consisting of: Loan-to-Value (“LTV”), mortgage pay history, and credit rating.  
   
   
       3 . The method of  claim 1 , wherein the significant multilevel loan factor is the mortgage pay history.  
   
   
       4 . The method of  claim 1 , wherein the probability of delinquency for each group is transformed into a base credit score.  
   
   
       5 . The method of  claim 4 , wherein the database is represented as a printed table.  
   
   
       6 . The method of  claim 1 , further comprising: 
 (a) identifying a plurality of either-or loan factors;    (b) creating a second pool from the historic loan data, wherein the second pool contains records relating to the plurality of either-or loan factors; and    (c) calculating an either-or probability of delinquencies for each either-or loan factor in the plurality of either-or loan factors, wherein each either-or probability of delinquency is combinable with any probability of delinquency for each group.    
   
   
       7 . The method of  claim 6 , wherein the either-or loan factors are selected from the group consisting of: alternative documentation, stated documentation, number of units, owner occupation, no mortgage history, combined loan-to-value ratio, cash out, debt-to-income ratio, and bankruptcy.  
   
   
       8 . The method of  claim 6 , wherein the either-or probability of delinquency for each group is transformed into an add-on credit score.  
   
   
       9 . The method of  claim 8 , wherein the plurality of either-or probability of delinquency is represented as a printed table.  
   
   
       10 - 26 . (canceled)