Systems and methods for facilitating financial transactions involving bundles of properties
View Patent ↗A system is disclosed for identifying potential short sale transactions that can be bundled or combined to produce a beneficial result to the financial institutions involved. Embodiments are directed to the identification of properties matching certain criteria that make them likely candidates for a short sale transaction. Other embodiments disclosed herein assess the value of identified properties and associated mortgages to facilitate short sale transactions, so that mortgage holders can have an accurate assessment of potential losses involved in short sale and foreclosure situations where multiple mortgages are involved. One embodiment provides an assessment of estimated potential losses realized by secondary mortgage holders and/or losses avoided by primary mortgage holders in proposed short sale situations. The assessment enables financial institutions involved in certain short sales to offset losses realized and/or avoided with those financial institutions that may have opposite mortgage positions (primary vs. secondary) on other properties.
1. A method for assessing the value of a set of real properties, the method comprising:
receiving data related to a set of properties, wherein each property is associated with two or more mortgages and a short sale offer;
for each property in the set of properties,
determining, by a computer system that comprises one or more computing devices which comprise one or more hardware processors, an expected property value if the property falls into foreclosure;
determining, by the computer system, potential losses avoided by a holder of a primary mortgage associated with the property if the short sale offer is accepted, the determining based at least partly on the determined expected property value and an offer amount of an associated short sale offer; and
determining, by the computer system, potential losses realized by a holder of a junior mortgage associated with the property if the short sale offer is accepted, the determining based at least partly on the determined expected property value and the offer amount of the associated short sale offer;
identifying, by the computer system, a first plurality of properties, within the set of properties, in which a first financial institution is a holder of primary mortgages associated with the first plurality of properties and a second financial institution is a holder of junior mortgages associated with the first plurality of properties;
identifying, by the computer system, a second plurality of properties, within the set of properties, in which the first financial institution is a holder of junior mortgages associated with the second plurality of properties and the second financial institution is a holder of primary mortgages associated with the second plurality of properties; and
determining, based on the determined potential losses avoided and realized for each property in the first and second pluralities of properties, aggregate amounts of losses avoided and losses realized for the mortgage holders for the first and second pluralities of properties, to facilitate an exchange of mutual release of junior mortgages by the first and second financial institutions to facilitate short sales of the first and second pluralities of properties.
2. The method of claim 1 , further comprising:
for one or more property in the set of properties,
determining an availability of a deficiency judgment for the property based at least in part on foreclosure laws of the state in which the property is located; and
in response to determining that a deficiency judgment is not available, determining a recommended amount of a promissory note from a borrower of a junior mortgage associated with the property to the junior mortgage holder.
3. The method of claim 2 , wherein the recommended amount of the promissory note is further determined based on a credit status of the borrower.
4. The method of claim 2 , wherein the recommended amount of the promissory note is further determined based on a delinquency status of the junior mortgage.
5. The method of claim 1 , wherein determining the aggregate amounts of losses avoided and losses realized comprises determining an offset amount to account for differences between the aggregate losses avoided and losses realized for the first financial institution and for the second financial institution.
6. The method of claim 5 , wherein the offset amount is a calculated based on a difference between:
(1) the net difference, for the first financial institution, between losses avoided on the first plurality of properties and losses realized on the second plurality of properties; and
(2) the net difference, for the second financial institution, between losses avoided on the second plurality of properties and losses realized on the first plurality of properties.
7. The method of claim 1 , wherein the potential losses avoided are determined based on a difference between the offer amount of the short sale offer and the expected value.
8. The method of claim 7 , wherein the expected value is adjusted by a present time value discount factor prior to determining the difference between the offer amount of the short sale offer and the expected value.
9. The method of claim 7 , wherein the potential losses avoided are determined based additionally on a carrying cost associated with the property if the short sale offer is rejected.
10. The method of claim 1 , wherein the potential losses realized are determined based additionally on a likelihood the property will fall into foreclosure.
11. The method of claim 1 , wherein determining the expected property value comprises using an automated valuation model (AVM) to derive the expected property value.
12. The method of claim 11 , wherein the AVM is a distressed property AVM.
13. The method of claim 12 , wherein the distressed property AVM is based at least in part on REO property data, comparable sales data, lien data related to the property, and data related to physical damages on the property.
14. The method of claim 1 , wherein determining the expected property value further comprises using a custom valuation model to derive the expected property value, the custom valuation model being customized based on criteria provided by the first or the second financial institution.
15. The method of claim 1 , wherein identifying the first plurality of properties identifies properties based at least partly on one or more of: a geographic preference, a maximum bound on a number of properties, a maximum bound on an aggregate value of properties, a minimum bound on a number of properties, a minimum bound on an aggregate value of properties.
16. The method of claim 15 , wherein one or more of the geographic preference, the maximum bound on a number of properties, the maximum bound on an aggregate value of properties, the minimum bound on a number of properties, the minimum bound on an aggregate value of properties is provided by the first financial institution or the second financial institution.
17. The method of claim 15 , wherein one or more of the geographic preference, the maximum bound on a number of properties, the maximum bound on an aggregate value of properties, the minimum bound on a number of properties, the minimum bound on an aggregate value of properties is mutually agreed upon by the first financial institution and the second financial institution.
18. A system for determining for assessing the value of a set of real properties, the system comprising:
a computerized system comprising one or more computing devices which comprise one or more hardware processors and memory, said computing devices configured to implement at least:
a data storage for receiving data related to a set of properties, wherein each property is associated with two or more mortgages and a short sale offer; and
a bundle assessment system configured to use the data in said data storage to:
for each property in the set of properties,
determine an expected property value if the property falls into foreclosure;
determine potential losses avoided by a holder of a primary mortgage associated with the property if the short sale offer is accepted, the determining based at least partly on the determined expected property value and an offer amount of an associated short sale offer; and
determine potential losses realized by a holder of a junior mortgage associated with the property if the short sale offer is accepted, the determining based at least partly on the determined expected property value and the offer amount of the associated short sale offer;
identify a first plurality of properties, within the set of properties, in which a first financial institution is a holder of primary mortgages associated with the first plurality of properties and a second financial institution is a holder of junior mortgages associated with the first plurality of properties;
identify a second plurality of properties, within the set of properties, in which the first financial institution is a holder of junior mortgages associated with the second plurality of properties and the second financial institution is a holder of primary mortgages associated with the second plurality of properties; and
determine, based on the determined potential losses avoided and realized for each property in the first and second pluralities of properties, aggregate amounts of losses avoided and losses realized for the mortgage holders for the first and second pluralities of properties, to facilitate an exchange of mutual release of junior mortgages by the first and second financial institutions to facilitate short sales of the first and second pluralities of properties.
19. The system of claim 18 , wherein the bundle assessment system is further configured to:
for one or more property in the set of properties,
determine an availability of a deficiency judgment for the property based at least in part on foreclosure laws of the state in which the property is located; and
in response to determining that a deficiency judgment is not available, determine a recommended amount of a promissory note from a borrower of a junior mortgage associated with the property to the junior mortgage holder.
20. The system of claim 19 , wherein the recommended amount of the promissory note is further determined based on a credit status of the borrower.
21. The system of claim 19 , wherein the recommended amount of the promissory note is further determined based on a delinquency status of the junior mortgage.
22. The system of claim 18 , wherein the bundle assessment system is configured to determine an offset amount to account for differences between the aggregate losses avoided and losses realized for the first financial institution and for the second financial institution.
23. The system of claim 22 , wherein the offset amount is a calculated based on a difference between:
(1) the net difference, for the first financial institution, between losses avoided on the first plurality of properties and losses realized on the second plurality of properties; and
(2) the net difference, for the second financial institution, between losses avoided on the second plurality of properties and losses realized on the first plurality of properties.
24. The system of claim 18 , wherein the potential losses avoided are determined based on a difference between the offer amount of the short sale offer and the expected value.
25. The system of claim 24 , wherein the bundle assessment system is further configured to adjust the expected value by a present time value discount factor prior to determining the difference between the offer amount of the short sale offer and the expected value.
26. The system of claim 24 , wherein the potential losses avoided are determined based additionally on a carrying cost associated with the property if the short sale offer is rejected.
27. The system of claim 18 , wherein the potential losses realized are determined based additionally on a likelihood the property will fall into foreclosure.
28. The system of claim 18 , wherein the bundle assessment system is configured to determine the expected property value using an automated valuation model (AVM).
29. The system of claim 28 , wherein the AVM is a distressed property AVM.
30. The system of claim 29 , wherein the distressed property AVM is based at least in part on REO property data, comparable sales data, lien data related to the property, and data related to physical damages on the property.
31. The system of claim 18 , wherein the bundle assessment system is configured to determine the expected property value using a custom valuation model, the custom valuation model being customized based on criteria provided by the first or the second financial institution.
32. The system of claim 18 , wherein the bundle assessment system is configured to identify the first plurality of properties based at least partly on one or more of: a geographic preference, a maximum bound on a number of properties, a maximum bound on an aggregate value of properties, a minimum bound on a number of properties, a minimum bound on an aggregate value of properties.
33. The system of claim 32 , wherein one or more of the geographic preference, the maximum bound on a number of properties, the maximum bound on an aggregate value of properties, the minimum bound on a number of properties, the minimum bound on an aggregate value of properties is provided by the first financial institution or the second financial institution.
34. The system of claim 32 , wherein one or more of the geographic preference, the maximum bound on a number of properties, the maximum bound on an aggregate value of properties, the minimum bound on a number of properties, the minimum bound on an aggregate value of properties is mutually agreed upon by the first financial institution and the second financial institution.