Asset and mortgage-backed securities automation system and method

Abstract

The invention is reiated to a digital asset securitization and data automation system and method utilized by finance sector players such as banks, financial institutions, asset management companies, i

Description

[0001] ASSET AND MORTGAGE-BACKED SECURITIES AUTOMATION SYSTEM AND METHOD

[0002] Technical Field

[0003] The invention relates to a securitization automation system and method used by financial sector players such as banks, investment banks, broadly authorized brokerage firms, financial institutions, and investment funds, insurance companies, and other service providers.

[0004] It ensures the efficient and secure securitization of receivables such as loans, invoice receivables, promissory notes, or mortgage-bound receivables and future receivables, by accurately analyzing the real-time performance of assets and protecting investors against unforeseen payment delays through portfolio analysis and real-time monitoring.

[0005] Known Status of the Technique

[0006] The process of removing a receivable (such as a loan or invoice receivable) from the balance sheet of an originating organization according to the Capital Market Board's legislation 58 section III, by establishing an asset financing or mortgage financing fund (shortly called fund), taking it off the balance sheet, and transforming it into a security to be sold to investors (portfolio management companies, investment funds, pension investment funds, insurance companies, and qualified investors) is referred to as securitization.

[0007] In current techniques, the securitization process involves manual operations such as the selection of receivables, analysis of the portfolio to be securitized, modeling of cash flows, and tracking of receivables (collections, delinquencies, etc.), and reporting the status of receivables and actual cash flows.

[0008] These manual processes do not meet the transparent, standard, and automated procedures expected by legal authorities and investor portfolios. They are prone to errors, timeconsuming, and do not support real-time updates.

[0009] For both investors and legislators in the industry, the accuracy, timeliness, and depth of information, as well as risk management and compliance, are of critical importance. In current systems, the inability to fully analyze and track the future performance of receivables transferred to the fund is a critical deficiency for both the securities investor and the legislator. For instance, situations such as early repayment of receivables, falling into default, restructuring, or delayed payments can indicate that the cash flow projections based on the original payment plans will not materialize. 5 This situation can lead to the securities not showing the expected performance. In such cases, individuals or institutions investing in securities (such as portfolio management companies, insurance, and pension companies) fail to achieve the targeted investment return. This prevents the financial system from functioning effectively and continuously.

[0010] 10 The lack of a method and system related to the selection of underlying assets (such as credit receivables, invoice receivables) subject to securitization in the state of the art has led to the 2008 crisis being a 'securitization crisis' worldwide. This crisis, which caused the world economy to shrink by nearly 6% and more than 30 million people to lose their jobs, is fundamentally due to incorrect asset selection.

[0011] 15 Consequently, the presence of the above problems and the inadequacy of current solutions have made it necessary to develop improvements in the related technical field.

[0012] 20 Purpose of the Invention

[0013] The current invention pertains to an asset or mortgage-backed securities automation system and method that eliminates the disadvantages mentioned above and brings new advantages to the relevant technical field.

[0014] 25 The primary aim of the invention is to introduce a securitization automation system method used by financial sector players such as banks, investment banks, broadly authorized brokerage firms, financial institutions, and investment funds, insurance companies, and other service providers. This system efficiently and securely facilitates the securitization of receivables such as loans, invoice receivables, promissory notes or mortgage-bound

[0015] 30 receivables, and future receivables.

[0016] 35 The purpose of the invention is to present a securitization automation system method that protects investors against unmodeled payment delays by accurately analyzing the real-time performance of assets, allowing for portfolio analysis and real-time monitoring.

[0017] Another aim of the invention is to minimize the risk of non-payment of receivables, then adjust the cash flows according to the risk profiles of the investors, thereby developing security designs that are both conventional and compliant with participation procedures, and thus presenting a securitization automation system method that offers innovative product design.

[0018] Another objective is to ensure that information related to assets / receivables subject to securitization (such as maturity of the receivable, interest rate, tax rate, payment plan, collateral information) is instantly transmitted to the fund by the originating organization through a web service system for every transaction related to the receivable (collections, delays, changes in maturity). This introduces a securitization automation system method that ensures real-time transfer of such transactions.

[0019] Furthermore, the invention aims to introduce a securitization automation system method that allows for real-time reporting of every transaction concerning the receivables transferred to the fund via a dashboard. This method enables investors who purchased the securities to monitor the performance of the receivables that make up the underlying asset of the security and the return of the current variable payment securities in real-time until maturity.

[0020] It also provides inputs to the fund operations teams managing the fund through the dashboard, enabling them to make decisions and effectively manage the fund, thus ensuring transparent and efficient reporting and performance demonstration for investors and operations teams.

[0021] Another aim of the invention is to instantly process collections and transfer cash flows to the fund's bank account, regularly accruing the incoming cash, and ensuring that expenses such as stock exchange listings and Central Registry Agency (CRA) registration determined by regulations are recorded in the fund's accounting, making them regularly reportable and auditable. This showcases a securitization automation system method that maintains meticulous record-keeping.

[0022] Additionally, the invention strives to facilitate a transparent and regular monitoring of targeted investment returns, ensuring the securitization process is fully automated, closed to manual intervention, simple, standardized, trackable, reportable, and auditable from start to finish. Another purpose is to manage and analyze the cash flow information related to the transferred receivables and the receivables themselves in a transparent, standard, and instantaneous manner, aiming to enhance the efficiency, accuracy, and reliability of financial transactions, thus providing a secure investment environment and traceability and reportability in the financial system.

[0023] Lastly, the invention aims to perform all operations effectively and reportably, enhancing the confidence of both investors and legislators in the market and facilitating efficient transactions.

[0024] The structural and characteristic features of the invention and all its advantages will be more clearly understood through the figures provided below and the detailed description written with reference to these figures. Therefore, the evaluation should also consider these figures and the detailed description.

[0025] Figures to Facilitate Understanding of the Invention

[0026] Figure 1: Schematic diagram of the asset or mortgage-backed securities automation system subject to the invention.

[0027] Explanation of Part References

[0028] 10. Data Warehouse

[0029] 11. Asset Selection Interface

[0030] 20. Design System

[0031] 30. Web Service System

[0032] 40. Fund Database

[0033] 50. Dashboard

[0034] 60. Fund Accounting System

[0035] K. Originating Organization Detailed Description of the Invention

[0036] In this detailed description, the preferred alternatives of the asset or mortgage-backed securities automation system are explained in a manner that is intended solely for better understanding of the subject and without creating any limiting effect.

[0037] Figure 1 presents a schematic diagram of the asset or mortgage-backed securities automation system subject to the invention. Fundamentally, the asset or mortgage-backed securities automation system consists of several components: the data warehouse (10) that retrieves a list of assets or receivables to be securitized from the originating organization's (K) database based on the type of receivable (credit, invoice, promissory note); the design system (20) that designs the security product according to maturity and risk levels based on the analyzed and modeled cash flows received from the data warehouse (10); the web service system (30) that instantly transmits changes from the originating organization (K), such as credit information, collections, payment plans, and collateral information; the fund database (40) that records the latest status of any changes in the receivables' information transmitted from the web service system (30); the dashboard (50) that instantly reports the status of receivable information recorded in the fund database (40) to fund operation users and investors who purchased the securities; and the fund accounting system (60) that records daily cash flows, payment performance, interest accrual on cash flows, and fund expenses information from the fund database (40).

[0038] The data warehouse (10) serves as a unit that fetches data from the database of the originating organization (K) based on designed data dictionaries according to the type of asset (credit, invoice, promissory note). The originating organization (K) refers to institutions that issue credits or receivables. The asset selection interface (11) in the data warehouse (10) enables users to select assets they want to securitize from the data available in the data warehouse (10) based on desired characteristics.

[0039] The design system (20) analyzes the data transmitted from the data warehouse (10) and models cash flows to design a security product according to maturity and risk levels.

[0040] 5 The reinvestment interest rate used for cash flow reassessment and the yield of the security are determined. The net cost of the transaction to the originating organization (K) is automatically calculated using cash flows, risk level, and reinvestment interest rate as part of calculating the transfer cost of assets. The design system (20) ultimately determines which receivables will be transferred to the fund database (40).

[0041] 10

[0042] 15 The web service system (30) ensures instant transmission of changes such as credit information, collections, payment plans, and collateral information from the originating organization (K) to the fund database (40). It is essential for the securitization process that the information on receivables transferred to the fund database (40) is regularly transmitted from the originating organization (K) and made reportable. This requirement is met through the data flow between the originating organization (K) and the fund database (40) facilitated by the web service system (30). Consequently, when a payment installment for a credit / receivable transferred from the originating organization (K) to the fund database (40) is made, this information is instantly transmitted to the fund database (40) via the web service system (30).

[0043] 20

[0044] 25 The fund database (40) records details of the receivables such as type of receivable, maturity, interest rate, opening date, closing date, payment plan, collateral information, and the latest status of any changes in the payment plan or other related information.

[0045] The dashboard (50) instantly reports the status of information transferred to the fund database (40). It displays real-time updates on collections, delays, changes in maturity, and cumulative returns resulting from accruals on the relevant receivables.

[0046] 30 The dashboard (50) enables investors who have purchased the securities to monitor the performance of the receivables constituting the underlying assets of the security and the returns of the current variable payment securities until maturity. It also provides inputs to fund operation users managing the fund, facilitating their decision-making and effective fund management. The fund accounting system (60) is responsible for recording daily cash flows, payment performance, interest accrual on cash flows, and fund expenses information in the fund database (40), and for creating accounting records for the entries in the fund database (40). The fund accounting system (60) establishes an auditable revenue-expense system.

[0047] The procedural steps of the asset or mortgage-backed securities automation method subject to the invention are as follows: a) Initiating the process by selecting assets or receivables to be securitized from the originating organization's (K) database to the data warehouse (10) based on data dictionaries designed according to the type of receivable (credit, invoice, promissory note), and the user initiating the process by making an asset selection through the asset selection interface (11) in the data warehouse (10) based on specified criteria, b) Designing the security product in the design system (20) by analyzing and modeling cash flows, which are transmitted from the data warehouse (10) to the design system (20), based on maturity and risk levels, c) Instantly transmitting changes from the originating organization (K) such as credit information, collections, payment plans, collateral information, and any changes in the credit or payment plans to the fund database (40) through the web service system (30), d) Recording the latest status of the receivables' information or any changes in the information transmitted from the web service system (30) in the fund database (40), e) Instantly reporting the status of the receivables' information recorded in the fund database (40) on the dashboard (50), making it visible to fund operation users and investors who purchased the securities, f) Creating accounting records for daily cash flows, payment performances, interest accrual on cash flows, and fund expense information of the receivables in the fund database (40) in the fund accounting system (60).

Claims

Claims1. An asset or mortgage-backed securities automation system used by financial sector players such as banks, investment banks, broadly authorized brokerage firms, financial institutions, and investment funds, insurance companies, and other service providers, which facilitates the securitization of receivables such as loans, invoice receivables, promissory notes, or mortgage-bound receivables and future receivables, characterized by:- A data warehouse (10) that collects a list of assets or receivables to be securitized from the originating organization's (K) database, based on data dictionaries designed according to the type of receivable (credit, invoice receivable, promissory note),- A design system (20) that receives data from the data warehouse (10) and performs analysis and cash flow modeling to design the security product according to maturity and risk levels,- A web service system (30) that instantly transmits changes in credit information, collections, payment plans, and collateral information from the originating organization (K) to the fund database (40),- A fund database (40) that records the latest status of the receivables' information or any changes transmitted from the web service system (30),- A dashboard (50) that instantly reports the status of the receivables' information recorded in the fund database (40) to fund operation users and investors who purchased the securities,- A fund accounting system (60) that creates accounting records for daily cash flows, payment performance, interest accrual on cash flows, and fund expenses information from the fund database (40).

2. The asset or mortgage-backed securities automation system according to claim 1, characterized by an asset selection interface (11) in the data warehouse (10) that allows users to select assets they want to securitize based on specified characteristics from the data available in the data warehouse (10).

3. An asset or mortgage-backed securities automation method used by financial sector players such as banks, investment banks, broadly authorized brokerage firms, financial institutions, and investment funds, insurance companies, and other service providers, which facilitates the securitization of receivables such as loans, invoice receivables, promissory notes, or mortgage-bound receivables and future receivables, characterized by the following steps: a) Transferring a list of assets or receivables to be securitized from the originating organization's (K) database to the data warehouse (10) based on data dictionaries designed according to the type of receivable (credit, invoice receivable, promissory note), and initiating the process by making an asset selection through the asset selection interface (11) based on specified criteria, b) Designing the security product based on analyzed and modeled cash flows transmitted from the data warehouse (10) to the design system (20), according to maturity and risk levels, c) Instantly transmitting changes in credit information, collections, payment plans, and collateral information from the originating organization (K) to the fund database (40) via the web service system (30), d) Recording the latest status of the receivables' information or any changes transmitted from the web service system (30) in the fund database (40), e) Instantly reporting the status of the receivables' information recorded in the fund database (40) on the dashboard (50) to fund operation users and investors who purchased the securities, f) Creating accounting records for daily cash flows, payment performances, interest accrual on cash flows, and fund expenses information in the fund database (40) in the fund accounting system (60).