Multi-Variable, Multi-Party Auction and Process to Prop-up Underwater Mortgages and Stabilize/Restore Market Values

Abstract

A multi-variable/multi-party mediation by a program administrator coordinates homeowners, mortgage holders, and investors to refinance homes with underwater mortgages, being initiated by homeowner/mortgage holder registration with the administrator. Registration triggers invitations to the homeowner(s), the mortgage holder(s), and one or more investors, for the refinancing program. Refinancing includes requesting a new total loan amount equaling/exceeding current fair market values, and/or matching interest rate requests by investors, with homeowner monthly payment requests. Program completion requires homeowner, mortgage holder(s), and investor(s) acceptance, resulting in mutual rescission of original loan agreement(s), creating Time-Out Mortgages, and Home Certificates—a hybrid security being a combination promissory note and agreement for sharing a Deferred Recapture Amount (DRA), being a difference between the new principal loan amount and total prior home lien amounts. DRA amounts may vary after closing according to one of several schemes, incentivizing agreement, which drives up housing prices while reducing risk of foreclosure.

What is claimed is: 
     
         1 . A process of coordinating and contractually binding one or more homeowners, one or more respective mortgage holders, and one or more investors, for refinancing of a home with an underwater mortgage, said process comprising:
 registering, by at least one of the one or more respective mortgage holders or at least one of the one or more homeowners, with a program administrator, by supplying data thereto;   scheduling said refinancing;   providing the one or more investors, the one or more respective mortgage holders, and the one or more homeowners, by said program administrator, of an invitation for said scheduled refinancing;   negotiating said refinancing, said negotiating comprising:
 matching of an interest rate requested by the one or more investors with a monthly payment requested by the one or more homeowners, resulting in a calculated principal loan amount for a time-out mortgage loan; and 
 requesting, by the one or more homeowners, the one or more respective mortgage holders, and the one or more investors, of a desired respective fractional portion of a deferred recapture amount (DRA), said DRA comprising a difference between the amount of said time out mortgage loan and a portion of a value associated with the home above the amount of said time out mortgage; 
   accepting, by the one or more homeowners, the one or more respective mortgage holders, and the one or more investors, to said matched interest rate bid and corresponding monthly payment bid, and to said calculated principal loan amount;   agreeing, by the one or more homeowners, the one or more respective mortgage holders, and the one or more investors—
 to a term for said time-out mortgage loan; and 
 to a negotiated respective fractional portion of said deferred recapture amount (DRA), for each of the one or more homeowners, the one or more respective mortgage holders, and the one or more investors; and 
   closing, by said program administrator, said closing comprising:
 mutual rescinding of all of the loan agreements held by the one or more respective mortgage holders; 
 issuing of said time-out mortgage loan, and a time-out mortgage against the home; and 
 issuing of a home certificate, said home certificate evidencing an amount of investment by each of the one or more investors. 
   
     
     
         2 . The process according to  claim 1 , further comprising using, by said program administrator, of a DRA portion resolution algorithm; and wherein when said requesting by the one or more homeowners, the one or more respective mortgage holders, and the one or more investors for said respective desired fractional portions of said DRA totals to be less than a threshold amount above 100%, said portion resolution algorithm operating to modify each of said desired fractional portions to total to 100%. 
     
     
         3 . The process according to  claim 2 , wherein said DRA portion resolution algorithm operates by reducing each said requested fractional portion in proportion to said total amount of said requested fractional portions. 
     
     
         4 . The process according to  claim 2 , further comprising agreeing, by the one or more homeowners, the one or more respective mortgage holders, and the one or more investors, to a post-closing varying scheme for said fractional portions of said DRA. 
     
     
         5 . The process according to  claim 3  wherein said post-closing varying scheme for said fractional portions of said DRA comprises a buy-in method, wherein each dollar amount of monthly payment, as a percentage, remitted by the one or more homeowners above a payment required by said time-out mortgage, thereby entitling the one or more homeowners to keep an additional percentage of said DRA. 
     
     
         6 . The process according to  claim 5  further comprising evidencing each of said varying fractional portions of said DRA by issuing a certificate of DRA to each of the one or more homeowners, the one or more respective mortgage holders, and the one or more investors. 
     
     
         7 . The process according to  claim 1  wherein said portion of the value associated with the home above the amount of said time out mortgage comprises the total amount of all of the loan agreements held by the one or more respective mortgage holders. 
     
     
         8 . The process according to  claim 1  wherein said home certificate comprises a hybrid financial instrument having at least two portions, a first portion of said financial instrument comprising said evidencing of said amount of investment by each of the one or more investors, and a second portion of said financial instrument evidencing said fractional portions of said DRA.