WO2015136503A1 - Secured disintermediated system for seeking and acquiring funding - Google Patents

Abstract

A disintermediated on-line system for matching a plurality of lenders to a borrower is described. The system comprises: a lender engine for enabling a plurality of remotely-located lenders to each set up a lender profile; the lender profile including an offer value parameter representing an amount of funds that the lender is making available to the system, and a range parameter representing the risk that the lender is prepared to accept; a borrower engine for enabling a remotely-located borrower to set up a borrower specification, the borrower specification specifying: an asset against which funds are to be secured; personal information regarding the borrower; and a loan value parameter representing an amount of funds that the borrower requires; and a risk calculation engine comprising a processor for calculating a total risk score from the borrower specification.

Description

Secured Disintermediated System for Seeking and Acquiring Funding

Related Applications The present application claims priority to U.S. Patent Application No. 61 /952,418 filed on March 13, 2014. The contents of the aforementioned application are incorporated by reference in their entirety.

Field of the invention

The present invention concerns a secured disintermediated system for seeking and acquiring funding, and more particularly, though not exclusively, is directed to a system and method of matching investors to borrowers and managing investment opportunities and investments in the field of secured loans, for example, mortgages.

Background to the invention

In the field of investments, investors need to efficiently find investments of calculated risk and complete their investments in a timely manner.

Existing schemas for investment completion typically involve the mediation of a bank or broker between the investor and the borrower. The mediation of an intermediary party between an investor and a borrower inevitably slows down the procedure of investment completion, increases costs and is liable to human error.

In addition to this, because of the costs associated with the mediation of an intermediary party, in the current state of affairs it is difficult for investors who only wish to invest small amounts of capital to enter the market. This is because typically, intermediary parties work on a profit margin and because of the time overheads associated with the procedure of matching and completing an investment, only offer their services to investors willing to invest large sums.

Furthermore, existing schemas for risk calculation and completion of investments typically involve intermediaries, such as banks, actuaries and credit rating agencies performing the task of predicting the risk associated with an investment. However, investors, whether they are individuals or companies, often have their own views on lending criteria, what they consider to be a high risk investment and what not. This mismatch between what an investor and what an intermediary considers a risk factor, results in inefficient and slow matching of investors to investments, as often investments will be rejected by the intermediary that would be acceptable to the investor, and investment opportunities are brought to the investor's attention that the investor considers irrelevant.

Furthermore, from a borrower's perspective, the current systems of acquiring funding are also slow and exclude borrowers looking to borrow smaller amounts. In addition to this, many of the current systems do not offer the borrower an interactive interest rate. Variable interest rates are known to exist but these are typically tied to an industry benchmark or very limited parameters of the borrower's circumstance.

Summary of the invention The purpose of the present invention seeks to overcome at least some of the above described problems. According to one aspect of the present invention there is provided a disintermediated on-line system for matching a plurality of lenders to a borrower, the system comprising a lender engine for enabling a plurality of remotely-located lenders to each set up a lender profile; the lender profile including an offer value parameter representing an amount of funds that the lender is making available to the system, and a range parameter representing the risk that the lender is prepared to accept; a borrower engine for enabling a remotely-located borrower to set up a borrower specification, the borrower specification specifying: an asset against which funds are to be secured; personal information regarding the borrower; and a loan value parameter representing an amount of funds that the borrower requires; a risk calculation engine comprising a processor for calculating a total risk score from the borrower specification; a management module for creating a loan opportunity specification comprising a borrower specification and an overall risk score; a matching engine for matching the loan opportunity to a plurality of the lender profiles, and a data store for storing a bucket data structure comprising a plurality of risk buckets sequentially arranged in order of range of risk, each lender profile having been associated with a corresponding risk bucket according to the range parameter value of each lender profile and each risk bucket having a corresponding price parameter and a total value comprised of a sum of the offer value parameters of different lender profiles associated with that risk bucket; wherein the matching engine is arranged to match the total risk score of the loan opportunity to a range parameter value to determine a current risk bucket for the loan opportunity and if the total value of the risk bucket is less than the loan value parameter, to seek to obtain a difference between the loan value parameter and the total value of the current risk bucket from an adjacent risk bucket having the next higher range value parameter.

Brief description of the drawings Figure 1 is a schematic block diagram illustrating an overview of a disintermediated system for seeking and acquiring funding in accordance with an embodiment of the present invention;

Figure 2 is a schematic block diagram illustrating the elements of the system of Figure 1 ; Figure 2a is a schematic block diagram illustrating the elements of a borrower specification;

Figure 2b is a schematic block diagram illustrating the elements of a lender profile;

Figure 3 is a flowchart illustrating an overview of a method of setting up a borrower specification in accordance with an embodiment of the present invention;

Figure 4 is a flowchart illustrating a method of setting up a lender profile in accordance with an embodiment of the present invention; Figure 5 if a flowchart illustrating a method of calculation of an interest rate of an investment in accordance with an embodiment of the present invention;

Figure 6 is a tabular illustration of an example of assignment of risk coefficients to parameters and calculation of a blended interest rate in accordance with the method of Figure 5;

Figure 7 is a flowchart illustrating a risk calculation update in accordance with an embodiment of the present invention;

Figure 8 is an tabular illustration of an example of the risk calculation update in accordance with the method of Figure 7; and

Figure 9 is a flowchart illustrating a process of fund withdrawal of an investor. Detailed description of the presently preferred embodiments of the invention

A system and method for providing functionality that enables a disintermediated online system for matching a plurality of lenders to a borrower is described.

In the following description, for purposes of explanation, numerous specific details are set forth in order to provide a thorough understanding of the invention. It will be apparent, however, to one skilled in the art that the invention can be practiced without these specific details. In other instances, structures and devices are shown in block diagram form in order to avoid obscuring the invention. For example, the invention is described in one embodiment below with reference to user interfaces and particular hardware. However, the invention applies to any type of computing device that can receive a data and commands, and any peripheral devices providing services. Reference in the specification to "one embodiment" or "an embodiment" means that a particular feature, structure, or characteristic described in connection with the embodiment is included in at least one embodiment of the invention. The appearances of the phrase "in one embodiment" in various places in the specification are not necessarily all referring to the same embodiment. It should be borne in mind, however, that all of these and similar terms are to be associated with the appropriate physical quantities and are merely convenient labels applied to these quantities. Unless specifically stated otherwise as apparent from the following discussion, it is appreciated that throughout the description, discussions utilizing terms such as "processing" or "computing" or "calculating" or "determining" or "displaying" or the like, refer to the action and processes of a computer system, or similar electronic computing device, that manipulates and transforms data represented as physical (electronic) quantities within the computer system's registers and memories into other data similarly represented as physical quantities within the computer system memories or registers or other such information storage, transmission or display devices. An overview of the operation of a system embodying the present invention is now provided followed by a detailed description of exemplary embodiments of the present invention.

The present embodiment concerns a secured disintermediated system allowing borrowers to seek and acquire funding from the most appropriate lenders from a pool of lenders with an interactive interest rate. It should be noted that the terms lender and investor are synonymous items for the purposes of this description and are used interchangeably. Similarly, the terms profile and specification are also synonymous items for the purpose of this description and are also used interchangeable. A schematic representation of a system embodying the present invention can be seen in Figure 1 .

The system 1 allows borrowers 3 to outline their profile (borrower specification) and the amount they require. It then cross-references the information provided by the borrowers and calculates a risk score based on the confirmed information. This information together with the risk score is then made available to the subscribed lenders.

Each lender 5 sets up a profile outlining the amount they are willing to lend (offer value parameter), the risk range (risk parameter) they are willing to accept and any special requirements they may have. The system 1 then matches each loan opportunity (potential loan) with appropriate lenders in a way such that the lowest possible interest rate is achieved. The borrower 3 has the opportunity to amend his profile in order to reflect any changes in their circumstances, thus amending their risk score and interest rate. As illustrated in the diagram of Figure 2, the system comprises a borrower engine 10 and a lender engine 12, a communications module 14, a risk calculating engine 16, a loan manager module 18, a property manager module 20 and a matching engine 22.

The communications module 14 acts as the interface between a plurality of lenders 5 and the lender engine 12 and between the borrowers 3 and the borrower engine 10, allowing borrowers 3 and lenders 5 to submit all required information, and feeding information from the system 1 back to them.

The lender engine 12 acts as an interface between a plurality of lenders 5 and the system 1 . The lender engine 12 contains a datastore 12a and a datastore manager (not shown). All the information regarding the lenders' risk profiles 13 can be continually updated and amended by the lenders 5. Once submitted through the communications module 14 the information is stored in the lenders datastore 12a. This information comprised in a lender risk profile 13 includes specification details about the loans the lenders are willing to invest in, such as acceptable risk ranges and, if the lender has opted for a customised risk profile, weighting associated to each risk factor. The lenders' risk profiles 13 may be updated through the communications module 14 at any point. Such updates are necessary to reflect each lender's particular risk preferences and characteristics. More information with regards to the lenders' risk profiles 13 will be given below, with reference to Figures 4 and 6. The lender engine 12 is connected to the matching engine 22, directing with the help of the datastore manager all the information regarding the lenders' loan requirements relevant to the matching process. In addition, the lender engine 12 is connected to the property manager module 20 so that off-line processes such as the exchange of contracts can be monitored.

Furthermore, the lender engine 12 is connected to the risk calculating engine 16 providing the risk calculating engine 16, with the help of the datastore manager, with all the necessary information to calculate a risk score of each loan opportunity according to each customised risk profile. Finally, the lender engine 12 is connected to the loan manager module 18, allowing the lenders to view all available loan opportunities. Each loan opportunity is realised as a data file in the loan manager module 18 comprises at least part of the data of a borrower's profile but also a risk score calculated by the risk calculating engine 16.

An exemplary block diagram illustrating a lender profile 13 (lender specification) can be seen in Figure 2b. As illustrated in Figure 2b, the lender specification 13 comprises two sets of data:

investment value and risk range information 26 and risk profile information 28. The investment value and risk range information 26 includes data regarding the amount of capital the lender is looking to invest and the risk ranges which are acceptable to the investor. By way of example, a lender may wish to invest £50,000 (offer value parameter), of which they would be willing to invest £30,000 in an investment with a risk score between 2-3 (range parameter) and the remaining £20,000 in an investment with a risk score between 4-5. The risk profile information section 28 includes information regarding the parameters that the investor considers to be risk factors as well as weightings assigned to those parameters based on how important the lender believes they are. An example of a risk profile section 28 will be described below with reference to the first five columns of Table 1 of Figure 6.

The loan manager module 18 manages all active loans and loan opportunities. Loan opportunities 19 (loan opportunity specifications) are saved in the data store 18a as seen in Figure 2. In order to compile each loan opportunity the loan manager module 18 obtains all the information relevant to the loan opportunities from the borrower specifications 1 1 and associated risk from the risk calculating engine 16. Loan opportunities are made visible to the lenders and are also forwarded to the matching engine 22.

The matching engine 22, in turn, is connected with the loan manager module 18 and lender engine 12, in order to match lender risk profiles 13 provided by the lender engine 12 to appropriate loan opportunities from the loan manager module 18.

The borrower engine 10 acts as an interface between a plurality of borrowers 3 and the system 1. The borrower engine 10 contains a datastore 10a which comprises borrower profiles 1 1 , where all the borrowers' information as submitted via the communications module 14 is stored. The borrower engine 10 further comprises a datastore manager (not shown) which passes the relevant subsets of information to the risk calculating engine 16 and the property manager module 20. In addition to this, the borrower engine 10 is also connected with several external databases (not shown) in order to deploy various security tests for carrying out due diligence relating to the borrowers.

An exemplary block diagram illustrating a borrower profile 1 1 (borrower specification) can be seen in Figure 2a. As illustrated in Figure 2a, the borrower specification 1 1 comprises three sets of data: personal information 23, asset information 24 and a loan value parameter 25. The personal information section 23 includes data regarding the borrower including, but not limited to, the borrower's employment status (income), age or marital status. The asset information section 24 includes data regarding the borrower's asset of interest. By way of example, if the borrower wishes to obtain funds for a mortgage, the asset information section 23 would include information such as the type of property and the property value. The loan value parameters section 25 includes information regarding the loan the borrower wishes to obtain, The value may also be represented by a property to Ian value percentage and an estimated valuation of the property

The property manager module 20 manages and stores all the information relevant to the properties for which the loans are requested. The property manager module 20 is also connected with numerous external databases (not shown) in order to deploy various security tests for carrying out due diligence relating to the properties, as will be described in more detail below. In addition to this, the property manager module 20 also handles the contracts to be exchanged between lenders and borrowers, as well as the survey requests to be sent to surveyors and the survey reports received. All of that information is stored in the property manager's datastore and then fed to the risk calculating engine 16.

The risk calculating engine 16 is connected to the borrower engine 10 and lender engine 12, the property manager module 20 and the loan manager module 18. The risk calculating engine 16 uses the data provided by the borrower engine 10 and property manager module 20 in order to calculate the risk (total risk score) associated with the corresponding loan opportunity according to the default risk profile. This information is then provided to the loan manager module 18. In addition to this, the risk calculating engine 16 uses the same data combined with the customised risk profiles provided by the lender engine 12 in order to provide the customised risk scores of each loan opportunity according to each customised risk profile to the loan manager module 18.

The functionality and processes described above may be implemented via a system architecture such as that shown in Figure 2. At its most general level the system according to the present embodiment comprises a processor, e.g. a server, which is in communication with one or more databases. The server may in some embodiments be a web server which serves web pages to the users, which can for example be Graphical User Interface pages to enable data entry for specification creation and also provide graphical representations of the results of any aspects of the system for example available loan opportunities. Users can interface with the communications module via a web-enabled browser or application running on a portable multifunctional device (e.g., smart phone, personal digital assistant (PDA), iPad™, notebook, subnotebook, tablet PC, electronic reader, etc.) or a non-portable device (e.g., desktop computer, such as PC or Mac, internet capable electronic displays/Tvs, etc.).

For example, if the portable multifunctional device is a cellular telephone, then the portable device circuitry includes a communication link that may support protocols such as Global System for Mobile communication (GSM), General Packet Radio Service (GPRS), Enhanced Data Rates for Global Evolution (EDGE), Universal Mobile Telecommunications Service (UMTS), etc. The communication interface of the device may also/alternately support Wireless Wide Area Network (WWAN), Wireless Local Area Network (WLAN), and/or Wreless Personal Area Network (WPAN), etc.

The system may further comprise one or more processor modules. In Figure 2 seven processor modules are shown, a communications module 14, a borrower engine 10, a risk calculating engine 16, a loan manager module 18, a matching engine 22, a lender engine 12 and a property manager module 20. It is to be appreciated however that other arrangements of server, processing modules and databases may be envisaged within the scope of the present invention. The borrower starts the process of requesting a loan by setting up a user profile (borrower profile 1 1) via the communications module 14.

The process of setting up a borrower profile is illustrated in the flow diagram of Figure 3. Firstly, the borrower connects to the communications module 14 and provides their personal information, information about their current circumstance as well as details about the loan they are requesting. This information is passed on by the communications module 14 to the borrower engine 10 where a detailed borrower profile is set up, at Step 30, with multiple parameters which can be assessed by lenders and is stored in the borrower engine's datastore.

Once the profile has been set up, at Step 30, the borrower engine 10 passes the borrower profile on to the property manager module. The borrower engine 10 ensures that a due diligence report is carried out on the borrower and connects to various external databases to perform several security checks. These may include ID3 Global, Google and social media searches on the borrower on media such as Facebook, Twitter, Linkedin and others, in order to establish their authenticity and correlate information provided with their online activity. Other examples of security checks involve cross-checking the given name against the financial sanctions and asset freeze lists, crosschecking the name against the ASTL information register, performing SIRA fraud checks and obtaining a Credit Safe report. Credit check reports, employer and income verification checks, banking transaction analysis checks may also take place at this stage. In addition to this, known associates checks, associated company and directors checks, address history are performed for the borrower.

At this stage the property manager module 20 ensures, at Step 34, that similar due diligence is carried out on the property of interest. The title due diligence carried out against the property using external datastores is then saved in the property manager module 20 against the property and used as a searchable resource for future applications for loans in the locality. This may involve checks on the locality around the proposed property finance, retrieval of the sales history of the property, price appreciation growth, average time on the market, significant developments in the locality (for example factory expansion, mining, landfill site expansion etc). Once these checks have been completed, the property manager module 20 automatically sends, at Step 36, instructions to an independent surveyor regarding the property the loan is being requested for. The valuation request is tailored to the property, drawing the surveyor's attention to factors highlighted in the locality checks. The surveyor's report is then received, at Step 38 by the property manager module 20 and stored in the property manager's datastore. Subsequently, all the property and borrower information stored in the property manager module datastore and borrower engine datastore is passed on, at Step 40, to the risk calculating engine 16. The risk scores associated with each loan opportunity, as specified by the default risk profile and the customised risk profiles are then calculated, at Step 42, at the risk calculating engine 16 and passed on to the loan manager module 18, where the loan opportunity is listed, at Step 42, as an opportunity. From there, loan details such as the various risk scores are sent to the matching engine 22 which performs the process of matching it to the appropriate lenders.

Subsequently, one or more matching results are received at Step 44.

Subject to the borrower's agreement, instructions are then sent by the property manager module 20 for the contract(s) to be drawn up offline at Step 46. Once the contracts have been received by each party via the lender and borrower engines, they are countersigned and exchanged, at Step 48, via the property manager module 20.

Finally, the loan is assigned, at Step 50, an active loan status (effected investment status) in the loan manager module 18.

The process of setting up a lender risk profile (lender profile 13) is illustrated in Figure 4. Each lender starts by setting up a profile, at Step 60 on the system through the communications module 14, which is connected to the lender engine 12, where the profile information is stored in the lender engine datastore and managed by the lender engine database manager (not shown).

In setting up their risk profile, each lender sets out their lending preferences including an offer value parameter and risk score range they are willing to lend to.

A lender's risk profile consists of the various factors which can be used as risk indicators. These may be 'traditional' risk factors, such as a 'loan-to-property value' (LTV) ratio or income relative to mortgage interest ratio but may also include less commonly used risk factors such as borrower age, type of employer and years at current employer, gender, years at current address, use of social media, qualification, family circumstance, employer, spending patterns, car they drive, demographic, social and economic profiling and many more factors. Lenders can also cap their exposure to individual borrowers' loans if required. A risk profile contains a variety of risk factors weighted according to their importance. The purpose of the risk profile is for the corresponding elements of a loan opportunity to be matched against those factors and a risk score to be generated. This will be described in more detail below with reference to a worked example.

The lender engine 12 offers, at Step 62, a default risk profile, with a pre-set combination of risk factors and associated weightings. However, it also gives the opportunity to lenders to create their own, customised risk profile, prioritising factors that are more important to them by assigning to them, at Step 64, appropriate weightings.

Once the lender has chosen a default risk profile or has set out the options of a customised risk profile, the risk profile is completed by setting out, at Step 66, the risk range to which they are willing to lend. Different risk ranges are associated with different interest rates. Subsequently, the risk profiles, default or customised, are passed, at Step 68, to the risk calculating engine 16 and the matching engine 22.

The system determines, at Step 70, whether a default risk profile was used. If not, the risk calculating engine 16 calculates, at Step 72, the risk score of every loan opportunity in the loan manager module 18 against every customised risk profile. Alternatively, if the default risk profile was not used, the risk calculating engine 16 calculates, at Step 74, the risk score of every loan opportunity against the default risk profile. Optionally, in certain embodiments of the invention this may occur automatically.

The matching engine 22 then matches, at Step 76, every loan opportunity to appropriate lenders. This matching is based on each lender's risk profile and acceptable risk score range and each loan opportunity's risk score. The matching engine 22 then passes, the appropriate opportunities to the lenders that were deemed appropriate by the matching engine. The lenders select, at Step 78, automatically or manually whether they wish to invest in the presented loan opportunity. The selection is often automatic as if all the criteria have been met there is no reason for the lender not to invest.

However, the lender can decide to keep this decision manually as a final check.

Once it is decided to go ahead, the contracts between the lender(s) and the borrower are completed and exchanged, at Step 80, via the property manager module 20, and the loan is logged, at Step 82, as an effected investment in the loan manager module 18. Optionally, in certain embodiments of the invention, a lender may also set one or more blocking (rejection) parameters. A blocking parameter relates to an investment characteristic which is undesirable to the lender. If a loan opportunity contains a characteristic which fulfils a blocking parameter of a risk profile of a lender, then that loan opportunity is not considered by the risk calculating engine 16 or the matching engine 22 for that particular lender. By way of example, a lender may set out a blocking parameter setting out a condition that they do not wish to invest in a drinking establishment. For any loan opportunity that is entered to the system directed to a drinking establishment the risk of that loan opportunity will not be calculated with respect of that lender and it will not be matched to that lender. Similarly, the blocking parameter can be a value of a parameter being above a certain threshold. Foe example, if the loan opportunity is for a lender under 25, the lender may simply reject the loan opportunity

The risk calculation and lender or 'bucket' matching is illustrated in the flow diagram of Figure 5.

Initially, the risk score of the loan opportunity with respect to the default risk profile and each customised risk profile is calculated in the risk calculating engine 16. First, the risk score of each risk factor is multiplied, at Step 90, with the risk weighting assigned to the risk factor in the particular profile. Subsequently, the weighted scores of all the parameters are added to calculate the overall risk score R. All the relevant information is then passed on to the matching engine 22. The available capital is divided into investment buckets. Each bucket corresponds to the capital of all the lenders who are willing to lend to a particular risk range. Each investment bucket also corresponds to a different interest rate. Collectively the investment buckets make up a data structure which is used by the matching engine 22

The matching engine initially selects an investment bucket such that the overall risk score R falls within that investment bucket's risk range. The higher the risk range, the higher the interest rate. Accordingly, as the goal is to achieve the lowest possible interest rate for the borrower, for a lower risk bound L and a higher risk bound H, the bucket first allocated to the loan of risk score R is such that that L<R<H. The maximum possible amount of capital is engaged, at Step 98, from the selected bucket. The maximum possible amount is smaller than or equal to the outstanding loan value.

It is then determined, at Step 100, whether the selected bucket contains sufficient funds to cover the entire loan value. If the bucket selected contains enough capital to cover the value of the entire loan opportunity, then the whole value of the loan opportunity is obtained from that bucket, at Step 102, achieving the minimum possible interest rate.

If the selected bucket does not contain enough capital to cover the entire value of the loan opportunity, then all the available capital of the bucket is engaged and the matching engine 22 selects, at Step 106, the adjacent bucket with an immediately higher risk range to cover the remainder of the loan value. This procedure is repeated until the value of the entire loan opportunity is covered. The overall interest rate achieved is the weighted average of the interest rates of the buckets from which funds are withdrawn.

For the purposes of this procedure, the outstanding amount required to cover the overall loan value is defined, at Step, 96, as y, and the counter /^' is set to 1 , with y^ reflecting the overall value of the loan. Once the most suitable initial investment bucket has been selected, at Step 94, an amount of capital x, is engaged, at Step 98. The amount x, is of smaller than or equal to the outstanding loan value y,, which, when looking at the first investment bucket is equal to y ₇ the overall value of the loan.

It is then examined, at Step 100, whether the engaged amount x, is equal to y^ . If this is the case, and all the necessary capital is available to be engaged from the first investment bucket, then the interest rate, which is calculated as the weighted average of the interest rates of the buckets from which funds are withdrawn, is determined, at Step 102, to be equal to the interest rate of the first bucket.

However, if it is determined, at Step 100, that the engaged amount x, is smaller than the overall value of the loan y ₇ the matching engine 22 increments, at Step 104, i and moves, at Step 106, to the immediately higher risk investment bucket. At this point, the matching engine 22 also updates, at Step 108, y,, the outstanding loan value. The outstanding loan value is equal to the previously outstanding loan value y_M less the amount engaged from the previous investment bucket x_M . Accordingly, when, for example, looking at the second investment bucket, /^' is incremented to 2, and y₂ is equal to the overall loan value y^ less the amount engaged from the first investment bucket, X! .

The above updating of y, is necessary in order to engage the correct amount of capital funds from the next bucket. Once the capital x, is engaged from the bucket, at Step 98, it is examined, at Step 100, whether the sum of engaged amounts∑}₌₁ x₁ is equal to the overall loan value y^ . If the sum of engaged amounts is still not sufficient to cover the overall loan amount y ₇ /^' is incremented again, at Step 104 and the process is repeated with the following bucket.

The procedure is repeated until the overall loan amount y^ is covered by the sum of engaged

Once that condition is met, the overall interest rate is calculated by calculating the sum of the weighted interest rates of all the used buckets, IR = — IR. . The process described with reference to Figure 5 can be best explained by way of a non-limiting example. An exemplary risk score calculation for a particular risk profile and the subsequent bucket matching will now be described with reference to Figure 6.

Figure 6 comprises three tables. The risk profile factors and score are set out in Table 1 . The funds available for each investment bucket having a corresponding score range are shown in Table 2. Table 3 shows the actual bucket matching for a given total risk score.

In the risk profile, the risk factors ('parameters') of interest can be seen in the first column, and include the property loan to value (LTV) 1 10, income relative to mortgage interest 1 12, borrower age 1 14, employer 1 16 and years at employer 1 18. Many other varied characteristics can also be profiled and risk weighted by lenders.

The risk weighting associated to each of those parameters can be seen in the fourth column 120 of Table 1 . The second column 122 contains the different values of each of the parameters- for instance for the 'employer' parameter 1 16 only two options are available- private sector 124 and public sector 126; whereas the borrower age 1 14 has six different age ranges 128-138. The values of the second column are set and are used to give risk score to a corresponding value in a borrower's profile (borrower's specification). As the borrower inputs these values, they are subject to change over time as a borrower's profile changes.

In the third column 140 a risk score is associated with each parameter value. In the 'employer' parameter example, the private sector option 124 is associated with a risk score of 10 (142) whereas the public sector 126 with a risk score of 5 (144), as it is considered safer.

The fifth column 146 contains the risk weighted score of each parameter value, which is simply the risk score associated with the corresponding parameter value adjusted with the risk weighting.

The sixth column 148 contains the score the particular loan opportunity of the example has got for each parameter. In this example, the property loan to value 1 10 was in the 60-70% range 150. This has a risk score of 5 (152) associated with it, which, adjusted with the 50% risk weighting indicated by the fourth column (154) gives the loan opportunity 2.50 points on its weighted risk score 156. Similarly, the income relative to mortgage interest is 250% (158), yielding a 1 (160), the borrower age 1 14 is in the 25-30 range (130), yielding a 0.8 (162) and the borrower has worked at their current employer for a time period in the 2-5 year range (164), yielding a 0.30 risk score

(166). The borrower works at the public sector (126) which would give them a 5*10%=0.5 score (168).

The loan opportunity's overall risk score is the sum of the risk score of each parameter, which comes up to 5.1 (170) as can be seen in the first row of the second column of Table 3.

Table 2 shows the funds available by lenders in each score range: For example, for loans in the risk score range of 0-1 (172), the mortgage pricing is at 2.75% (174) and the available capital is £50,000 (176).

Table 3 illustrates the bucket matching for the particular loan opportunity. As can be seen in the third row from the bottom (180), the requested amount is £400,000. With a risk score of 5.1 (170) the funds could be all obtained from investor bucket 6 (184), with a range of 5 to 6, in the 7th row of Table 2. However, as can be seen from the available capital column of that row, only £300,000 is available for that risk range. Accordingly, the remaining £100,000 must be obtained from the bucket corresponding to the immediately higher risk score (184). As a result, it can be seen in the second and third columns of Table 3 that £300,000 will be obtained from investor bucket 6 (186) , at the interest rate of 4% indicated in the third column of Table 2, and the remaining £100,000 will have to be obtained at a 4.25% interest rate from bucket 7 (188). Accordingly, the final interest rate of the loan will be 4.06% (190) a result of blending (a weighted average) the two interest rates (4%x(300,000/400,000)) + (4.25%x(100,000/400,000)).

A very important feature of the present embodiment is that it allows the mortgage interest rate to be adjusted. This happens by giving the borrower 3 the opportunity to update their borrower profile every time there has been a change in their circumstances, especially if those are likely to influence their risk rating, and consequently, their interest rate. In addition to this, for security purposes, the borrowers are also encouraged to update their profile and have a surveyor's report and due diligence carried out on their property every two years.

The process is now described with reference to the flow diagram of Figure 7. It is first examined, at Step 200, if it has been over two years since the borrower profile was created or last updated.

If it is determined, at Step 200, that it has been over 2 years, then the borrower has no choice but to update, at Step 202, their profile with their most up-to-date details. For example even if nothing has changed regarding their employment and financial status, the mere fact that the borrower 3 has aged might be significant if the risk profile of the loan attributes significance to their age group, as in the example risk profile of Figure 5 (featurel 14).

If it is determined, at Step 200, that it has not yet been two years but the borrower still wishes to update their profile because, for example, the borrower 3 is earning a much higher salary now and that would reflect positively on their risk score, the borrower is able to do so, as long as there has been at least a six-month interval since the latest update.

The borrower 3 may update, at Step 202 all the appropriate sections of their existing borrower profile which has previously been stored in the borrowers' engine datastore. The borrower 3 carries out the update, at Step 202, through the communications module 14 which is connected to the borrower engine 10, in a similar manner to when the profile was originally set up.

Following this, the property manager module 20 is alerted by the borrower engine 10 and a new round of due diligence is carried out, at Step 206, to confirm the most recently submitted information.

It is then determined, at Step 208, whether the updated profile contains any changes in the property. Such changes could include, but are not limited to, an increase in the notional value of the property, the property manager module further ensures that instructions are sent to surveyors.

If it is determined, at Step 208, that the updated profile does contain changes relating to a property, then instruction for a surveyor's report are sent, at Step 210. Once the surveyor's report has been received and stored, at Step 212, in the property manager module datastore, or if there were no changes relating to the property, the new profile information is passed on to the risk calculating engine 16 for the new risk score(s) of the effected investment to be calculated as described earlier. The risk scores associated with each loan, as specified by the default risk profile and the customised risk profiles, are then calculated, at Step 216, at the risk calculating engine 16. The lenders already lending to the particular loan (existing lenders) are then consulted at Step 216.

If an existing lender is happy to continue funding the loan despite the risk score change, then new contracts are drawn up, at Step 220, reflecting the change in interest rate, which are completed and exchanged, at Step 222, through the property manager module 20, by the parties of interest. The loan is then logged, at Step 230, as an effected investment.

If it is determined, at Step 218, that a lender does not wish to continue lending in view of a different risk score, then the effected investment becomes a loan opportunity and is sent to the loan manager module at Step 224. From the loan manager module 18 it is forwarded, to the matching engine 22 and the previously described matching process takes place. Once the matching results have been received, at Step 226, and agreed on by all parties of interest, new contracts are drawn up, at Step 228, by the property manager module 20, which are then completed and exchanged by the parties of interest at Step 222. The loan is then logged, at Step 230, as an effected investment.

An example of risk profile updating and how that influences bucket matching can be seen in Figure 8, which illustrates how the borrower of the example of Figure 6 changed his risk profile and how that affected his overall interest rate. It is to be understood that like reference numerals are used to denote like features.

The risk profile factors and score are set out in Table 1 of Figure 8 and remain unchanged, as set out in the particular risk profile set out by the lender.

The sixth column of Table 1 (148') contains the score the particular loan opportunity of the example has got in 2014, when the profile was first set up.

By 2016 (as seen in column 7, (240), the borrower has undertaken an extension to his property increasing its value, which reduces the loan-to-value between 2014 and 2016. Accordingly, the score received for the property loan to value drops from 2.5 (156') to 1 (242).

The borrower also moved jobs between 2014 and 2016 and had a large pay rise. The salary increase dropped his income to mortgage interest risk factor from 1 (160') to 0.4 (244), but increased his employer-related risk factor from 0.5 (168') to 1 (246). In addition to this the borrower moved from the 25-30 to the 30-35 age group, improving his risk factor related with age from 0.8 (162') to 0.6 (248).

As a result of all these changes, the overall loan risk score dropped from 5.1 (178') in 2014 to 3.3 (250) in 2016 (shown in the first row of Table 3).

This made the borrower eligible for investment bucket 4 (252) which corresponds to the lower risk range of 3 to 4 (254) and a lower interest rate of 3.5 (256). However, the overall capital in investment bucket 4 is £300,000 (258), while the overall loan value is £400,000. Accordingly, the available capital in investment bucket 4 is insufficient to cover the whole loan (258), so the outstanding funds are withdrawn from the immediately higher risk range bucket, investment bucket 5 (182'). The blended interest rate is therefore: (3.5%x(300, 000/400,000))+

(3.75%x(100,000/400,000)) = 3.56% (260). Between 2016 and 2018 the housing market falls, with a consequential drop in the value of the borrower's property, increasing the borrower's loan to value again. This is reflected by the increase of his property loan to value score which rises from 1 (242) to 1 .5 (262).

In addition to this, the borrower is made redundant in 2017. This causes a steep increase in his income relative to mortgage interest risk factor which moves from 0.4 (244) to 4 (264). In addition to this, this also changes his 'years at employer' risk factor which increases from 0.3 (266) to 0.5 (268) and his employment status defaults to the higher private sector value of 1 .0 even though he is no longer employed.

The borrower's overall risk score in 2018 is increased to 7.6 (270). The cheapest bucket available to the borrower is now investment bucket 8 (272), with an interest rate of 4.50% (274). This bucket only has £200,000 available (276), so the other half of the loan is obtained from bucket 9 (278) with a higher interest rate still. As a result, the blended interest rate of the 2018 update is 4.63% (280).

As detailed above, borrowers have a large number of variables which determine their interest rate and they can quickly see which factors affect the rate they are paying and work to improve their credit quality and reduce their interest cost. Similarly, a large amount of flexibility is also afforded to lenders. This flexibility capability will now be described below with reference to Figure 9.

As mentioned in Figure 7, if a lender is particularly happy with a borrower, then they have the opportunity to stay with them even if their risk score changes beyond the risk range the lender had originally declared to be of interest to them.

In particular, if it is determined, at Step 300, that the risk score of the affected investment changes beyond the limits of the risk score range it was previously in, the lender is faced with the choice, at Step 302, to either keep or recall the loan. This holds true even if the lender had not originally expressed an interest in the risk range the new risk score falls into.

If it is determined, at Step 302, that the lender wishes to stay with the particular effected investment regardless of the risk score change, new contracts are drawn up, at Step 304, to reflect the different interest rate. These are completed and exchanged through the property manager module 20 and the loan is logged, at Step 306, as an effected investment.

If it is determined, at Step 302, that the lender does not wish to continue lending given the changed risk range, then the invested funds are returned, at Step 308, to the lender and they are removed from the loan agreement.

In addition to this, lenders also have the opportunity to withdraw their funds even if there has been no change in the effected investment specification. The effected investment specification is a loan opportunity specification of a loan opportunity which has an active loan status. The effected investment specification contains data regarding the borrower, property and the lenders who have invested in the loan.

If it is determined, at Step 300 that the risk score of the loan has not changed beyond the acceptable spectrum, it is then examined, at Step 310, whether the wishes to withdraw from the investment.

If it is determined, at Step 312, that the lender wishes to withdraw from the investment, they may access, at Step 312, a secondary market through the lender engine 12. The secondary market is simply an interface of the communications module 14 with the lender engine 12 for lenders to view and contact other lenders who may wish to swap their investments.

Once a replacement investor has been found, at Step 314, the invested funds are received, at Step 308, by the lender.

In the above example embodiments, the creation, display and interaction results from the execution of applications may be local to the device or distributed between the device and one or more servers connected to a network. In some embodiments, an application executing on the portable device uses the resources of an operating system such as Android, iOS, etc. for mobile phones and an application executing on a PC or Apple computer could utilize Windows, Unix, MacOS, etc. Additionally, if the devices are connected over the Internet then the capabilities of standard browser applications such as Firefox, Internet Explorer, Safari or Chrome would also be utilized by the applications.

Computer programs based on the written description and flow charts of this invention are within the skill of an experienced developer. The various software components, functions, programs and/or program modules described in this application may be created using any of the techniques known to one skilled in the art or can be designed in connection with existing software, and implemented as software code to be executed by a processor using any suitable computer language, such as, for example, Java®, C++, Perl, HTML or XML. The software code may be stored as a series of instructions or commands on a computer readable medium, such as a random access memory (RAM), a read only memory (ROM), a magnetic medium such as a hard- drive or a floppy disk, or an optical medium such as a CD-ROM. Any such computer readable medium may reside on or within a single computational apparatus, and may be present on or within different computational apparatuses within a system or network.

Having described a plurality of exemplary embodiments it is to be appreciated that the present invention is not restricted or limited by these embodiments as these embodiments are exemplary, the present invention being defined by the spirit and scope of the invention as described herein.

Claims

Claims:

1 . A disintermediated on-line system for matching a plurality of lenders to a borrower, the system comprising:

A lender engine for enabling a plurality of remotely-located lenders to each set up a lender profile; the lender profile including an offer value parameter representing an amount of funds that the lender is making available to the system, and a range parameter representing the risk that the lender is prepared to accept;

A borrower engine for enabling a remotely-located borrower to set up a borrower specification, the borrower specification specifying: an asset against which funds are to be secured; personal information regarding the borrower; and a loan value parameter representing an amount of funds that the borrower requires;

A risk calculation engine comprising a processor for calculating a total risk score from the borrower specification;

A management module for creating a loan opportunity specification comprising a borrower specification and an overall risk score;

A matching engine for matching the loan opportunity to a plurality of the lender profiles, and

A data store for storing a bucket data structure comprising a plurality of risk buckets sequentially arranged in order of range of risk, each lender profile having been associated with a corresponding risk bucket according to the range parameter value of each lender profile and each risk bucket having a corresponding price parameter and a total value comprised of a sum of the offer value parameters of different lender profiles associated with that risk bucket;

wherein the matching engine is arranged to match the total risk score of the loan opportunity to a range parameter value to determine a current risk bucket for the loan opportunity and if the total value of the risk bucket is less than the loan value parameter, to seek to obtain a difference between the loan value parameter and the total value of the current risk bucket from an adjacent risk bucket having the next higher range value parameter.

2. The system of Claim 1 , wherein the adjacent bucket becomes the current bucket and the difference becomes a current unplaced portion of the loan value parameter, and the matching engine is arranged to repeatedly seek to obtain the current unplaced portion from an adjacent bucket having a next higher range value parameter, until all of the loan value parameter has been matched across adjacent risk buckets.

3. The system of Claim 1 , wherein the management module is able to determine a blended price for the loan opportunity based on the distribution of the loan value parameter across the risk buckets and the respective price parameters of those risk buckets.

4. The system of Claim 3, wherein the management module is arranged to calculate the blended price parameter by calculating the sum of the weighted price parameters of all the used buckets according to the formula IR = — IR, where IR = blended price parameter, x, = a particular sequential risk bucket, = loan value parameter, IR, = price parameter of risk bucket i.

5. The system of Claim 4, wherein the price parameter comprises an interest rate.

6. The system of Claim 1 , wherein the management module is arranged to associate each lender profile with a corresponding risk bucket according to the range parameter value of each lender profile.

7. The system of Claim 1 , further comprising an asset management module which is arranged to manage a process of valuation of the asset described in the borrower specification, the asset management module being able to send queries to and receive responses from external databases and to generate prompts for actions to be carried out.

8. The system of Claim 7, wherein the asset management module is arranged to provide information regarding the status of the process of valuation of the asset to the borrower and the matched lenders.

9. The system of Claim 7, wherein the asset management module is arranged to output asset information to the risk calculating engine and the risk calculating engine is arranged to use the asset valuation in determining the total risk score of the borrower specification.

10. The system of Claim 7, wherein the lender engine is arranged to communicate with the asset management module to provide information enabling the asset management module to issue instructions.

1 1 . The system of Claim 1 , wherein the risk calculation engine is arranged to determine an individual risk score for each one of a plurality of parameters of the borrower specification and the total risk score from a sum of the individual risk scores.

12. The system of Claim 1 1 , wherein the risk calculation engine is arranged to apply a weighting to each different one of the plurality of parameters of the borrower specification to determine a weighted individual score.

13. The system of Claim 12, wherein the weightings are fixed and the risk calculation engine generates a default weighted overall risk score.

14. The system of Claim 12, wherein the weightings are adjustable by the remotely-located lenders, and the risk calculation engine generates a customised weighted overall risk score.

15. The system of Claim 14, wherein the risk engine is arranged to determine a total risk score for each lender using customised weightings.

16. The system of Claim 13, wherein the risk engine is arranged to determine a total risk score for a lender using the default weightings.

17. The system of Claim 1 1 , wherein the risk engine is provided with one or more rejection parameters from a specific lender profile and the risk engine is arranged to classify the risk of the borrower as being unacceptable for that lender if that rejection parameter is present in the borrower profile.

18. The system of Claim 1 1 , wherein the risk engine is provided with a rejection value of a parameters from a specific lender profile and the risk engine is arranged to classify the risk of the borrower as being unacceptable for that lender if the value of the parameter in the borrower profile is equal to or higher than the rejection value.

19. The system of Claim 1 , wherein the borrower engine is arranged to enable the remotely- located borrower to update the borrower specification and the risk calculating engine is arranged to recalculate the total risk score automatically for each lender profile once the borrower specification has been updated.

20. The system of Claim 19, wherein the lender engine is arranged to present the outcome of the recalculated total risk score to each of the matched lenders and the lender is given the opportunity to withdraw from the loan opportunity.

21 . The system of Claim 20, further comprising a communications interface which enables the matched lender who wishes to withdraw from a loan opportunity to communicate with others of the plurality of remotely-located lenders for investment swapping.

22. The system of Claim 1 , wherein the borrower engine is arranged to send out a notification to the remote borrower requiring the borrower to update their borrower specification after the lapse of a predetermined time period during which there has been no update of the borrower's specification.

23. An on-line method of matching a plurality of lenders to a borrower, the method comprising: enabling a plurality of remotely-located lenders to each set up a lender profile; the lender profile including an offer value parameter representing an amount of funds that the lender is making available to the system, and a range parameter representing the risk that the lender is prepared to accept;

facilitating a remotely-located borrower to set up a borrower specification, the borrower specification specifying: an asset against which funds are to be secured; personal information regarding the borrower; and a loan value parameter representing an amount of funds that the borrower requires;

calculating a total risk score from the borrower specification using a processor;

creating a loan opportunity specification comprising a borrower specification and an overall risk score;

matching the loan opportunity to a plurality of the lender profiles, and

storing a bucket data structure comprising a plurality of risk buckets sequentially arranged in order of range of risk, each lender profile having been associated with a corresponding risk bucket according to the range parameter value of each lender profile and each risk bucket having a corresponding price parameter and a total value comprised of a sum of the offer value parameters of different lender profiles associated with that risk bucket;

wherein the matching step matches the total risk score of the loan opportunity to a range parameter value to determine a current risk bucket for the loan opportunity and if the total value of the risk bucket is less than the loan value parameter, seeking to obtain a difference between the loan value parameter and the total value of the current risk bucket from an adjacent risk bucket having the next higher range value parameter.

24. The method of Claim 23, wherein the matching step comprises making the adjacent bucket become the current bucket and the difference become a current unplaced portion of the loan value parameter, and repeatedly seeking to obtain the current unplaced portion from an adjacent bucket having a next higher range value parameter, until all of the loan value parameter has been matched across adjacent risk buckets.

25. The method of Claim 23, further comprising determining a blended price for the loan opportunity based on the distribution of the loan value parameter across the risk buckets and the respective price parameters of those risk buckets.

26. The method of Claim 23, further comprising calculating the blended price parameter by calculating the sum of the weighted price parameters of all the used buckets according to the formula

where IR = blended price parameter, x, = a particular sequential risk bucket, = loan value parameter, IR, = price parameter of risk bucket i.

27. The method of Claim 23, further comprising associating each lender profile with a corresponding risk bucket according to the range parameter value of each lender profile.

28. The method of Claim 23, further comprising managing a process of valuation of the asset described in the borrower specification, the managing process including sending queries to and receiving responses from external databases and generating prompts for actions to be carried out.

29. The method of Claim 28, further comprising providing information regarding the status of the process of valuation of the asset to the borrower and the matched lenders.

30. The method of Claim 28, further comprising using the asset valuation in determining the total risk score of the borrower specification.

31 . The method of Claim 23, wherein the risk calculation step comprises determining an individual risk score for each one of a plurality of parameters of the borrower specification and the total risk score from a sum of the individual risk scores.

32. The method of Claim 31 , wherein the risk calculation step includes applying a weighting to each different one of the plurality of parameters of the borrower specification to determine a weighted individual score.

33. The method of Claim 32, wherein the weightings are fixed and the risk calculation step generates a default weighted overall risk score.

34. The method of Claim 32, wherein the weightings are adjustable by the remotely-located lenders, and the risk calculation step includes generating a customised weighted overall risk score.

35. The method of Claim 34, wherein the risk calculation step determines a total risk score for each lender using customised weightings.

36. The method of Claim 33, wherein the risk calculating step determines a total risk score for a lender using the default weightings.

37. The method of Claim 23, wherein the risk calculating step comprises recalculating the total risk score automatically for each lender profile following the updating of the borrower specification.

38. The method of Claim 37, further comprising presenting the outcome of the recalculated total risk score to each of the matched lenders and providing the lender an option to withdraw from the loan opportunity.

39. The method of Claim 23, further comprising sending out a notification to the remote borrower requiring the borrower to update their borrower specification after the lapse of a predetermined time period during which there has been no update of the borrower's specification.

40. A method for optimally assigning investment funds to an investment opportunity, wherein each investment fund has an offer value parameter and a risk parameter and the investment opportunity has a loan value and descriptive data; the method comprising:

Allocating a plurality of investment funds into several sequential buckets; each bucket having a lower risk limit and an upper risk limit and each containing investment funds to be allocated to an investment opportunity,

Calculating a risk value associated with an investment opportunity on the basis of the descriptive data,

Selecting a current bucket where the risk value of the investment opportunity falls between the upper and lower risk limits of the bucket,

Using as much of the offer value parameters of the investment funds of the bucket as are required to match the loan value of the investment opportunity;

if the amount of offer value parameters is insufficient to match the loan value amount, determining a difference between the loan amount and the sum of the offer value parameters;

Selecting an adjacent bucket as a new current bucket, the adjacent bucket having with a lower risk limit matching the higher risk limit of the current bucket; and

Repeating the using, determining and selecting steps until the offer value parameters match the total amount of the loan value; and

Calculating a blended price parameter based on the amounts and distribution of the investment funds across the buckets which have been matched to the investment opportunity.