Mortgage Equity Protection Pool System
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Solution Overview
Problem
Existing mortgage systems lack protection for homeowners facing unforeseen circumstances such as job loss, health expenses, or relocation, leading to high foreclosure rates and economic instability, with prior solutions focusing primarily on financial institution protection rather than homeowner security.
Innovation Solution
A computer-based mortgage management system that pools homeowners together, providing a collective mechanism to mitigate individual mortgage payment failures by allowing members to relocate within a unified system, avoiding foreclosure through a 'no foreclosure rule' and offering flexible property exchange and job placement services.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional mortgage insurance is provided to protect homeowners, then homeowner protection is improved, but cost and availability worsen
Solution Approach 1:
The patent combines multiple homeowners into a shared pool where risks are distributed collectively. Instead of individual mortgage insurance, the system merges resources and risks across the pool, allowing members to share obligations when foreclosure risks arise. This collective approach reduces individual costs while maintaining protection.
Solution Approach 2:
The patent introduces a management company as an intermediary that operates the foreclosure pool and matches members with new properties. This intermediary coordinates the complex processes of risk pooling, obligation transfer, and property relocation, making the system manageable and accessible to individual homeowners without requiring them to navigate complex arrangements themselves.
2Reliability
If individual homeowners face foreclosure risk, then foreclosure protection is worsened, but economic stability improves when pooled
Solution Approach 1:
The patent merges individual foreclosure risks into a collective pool, transforming individual vulnerabilities into shared manageable risks. When one member faces foreclosure risk, the pool collectively absorbs the impact through obligation sharing, preventing individual foreclosures from cascading into broader economic problems.
Solution Approach 2:
The patent establishes a foreclosure pool in advance that serves as a cushion against future foreclosure risks. Members contribute to the pool beforehand, creating a reserve that can be deployed when foreclosure risks materialize, cushioning the blow before it affects the individual or broader economy.
3Adaptability or versatility
If homeowners need to relocate due to job loss or other circumstances, then flexibility is improved, but financial harm worsens without the pool system
Solution Approach 1:
The patent creates a universal system that serves multiple functions: it provides foreclosure protection, facilitates relocation, enables property matching, and manages obligation transfers. This multi-functional platform supports homeowners through various life circumstances including job loss, divorce, and relocation, making the system adaptable to diverse needs.
Solution Approach 2:
The management company acts as an intermediary that facilitates smooth transitions when homeowners need to relocate. It matches members with suitable properties in the pool, coordinates obligation transfers, and manages the relocation process, enabling flexible movement while maintaining financial security through the pooled support system.
Data Source
AI summary
A computer system for managing mortgages of mortgage holders with a no foreclosure rule interconnected to funding institutions maintained as a club. The system has input devices capable of receiving data from the mortgage funding institution or mortgage originator. The home owner club agrees to assume responsibility for providing financing agreements with a no foreclosure clause. A processor calculates values and maintains up to date information as a function of the probability of property values change and the payments on mortgage obligations. A memory has a database storing data relating to mortgages and club members, pools of properties of club members and financial data. An output device produces commitment for club members (assumes obligation for providing security and solutions, and in case of difficulties for members, (maintains mortgage payments) and funding institution assumes obligations. Members may be reimbursed equity positions upon relinquishment of a mortgage obligation.