System and method for implementing and administering a mortgage plan4876648Abstract A computerized mortgage implementing system includes a central service computer, which helps establish and maintain mortgage plans based upon mortgages at least partially collateralized by investment vehicles. Both a plurality of groups of investment vehicle information and mortgage information are stored in the service computer. Borrower information is entered in the service computer when a mortgage plan is to be established. An individual one of the groups of investment information is selected. A desired amount of the investment funding is determined for helping repay a mortgage plan. Mortgage implementing information is generated for a given mortgage plan, and is sent to a mortgage lender computer to facilitate the establishment of the mortgage plan. Claims What is claimed is: Description TECHNICAL FIELD
TABLE 1
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CONVENTIONAL MORTGAGE
30 YEAR TERM/10.5% PER ANNUM FIXED
ANNUAL ANNUAL
REDUCTION
AFTER
MONTHLY OUTSTANDING
OF TAX
YEAR
PAYMENT PRINCIPAL PRINCIPAL
COST
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1 914.74 99,499.49 500.51 7,764.41
2 914.74 98,943.02 556.47 7,810.19
3 914.74 98,326.92 616.10 7,858.54
4 914.74 97,642.02 684.90 7,915.43
5 914.74 96,881.68 760.34 7,977.20
6 914.74 96,037.52 844.16 8,045.87
7 914.74 95,100.35 937.17 8,122.04
8 914.74 94,059.90 1,040.45 8,206.63
9 914.74 92,904.76 1,155.14 8,300.56
10 914.74 91,622.33 1,282.46 8,404.86
11 914.74 90,198.61 1,423.69 8,520.48
12 914.74 88,617.94 1,580.67 8,649.07
13 914.74 86,863.07 1,754.87 8,791.76
14 914.74 84,914.82 1,948.25 8,950.12
15 914.74 82,751.86 2,162.96 9,125.47
16 914.74 80,350.55 2,401.31 9,321.18
17 914.74 77,684.60 2,665.95 9,537.91
18 914.74 74,724.85 2,959.75 9,778.54
19 914.74 71,438.94 3,285.91 10,045.64
20 914.74 67,790.90 3,648.04 10,342.2
21 914.74 63,740.83 4,050.07 10,671.51
22 914.74 59,244.42 4,496.41 11,037.06
23 914.74 54,252.49 4,991.93 11,442.90
24 914.74 48,710.45 5,542.04 11,893.43
25 914.74 42,557.65 6,152.80 12,393.64
26 914.74 35,726.79 6,830.86 12,948.99
27 914.74 28,143.17 7,583.62 13,565.98
28 914.74 19,723.78 8,419.39 14,249.98
29 914.74 10,376.55 9,347.23 15,009.88
30 914.74 0.00 10,376.55
15,450.68
302,132.20
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It can be seen from Table 1 that the month)y payments remain constant, and include both principal and interest portions. As a result, the principal amount of the loan is reduced as indicated in the table. The annual after tax cost of the conventional mortgage loan is shown in Table 1, based upon an assumption that the primary borrower is in the current 33% federal income tax bracket, and thus, the borrower's actual cost after taxes is illustrated. In this regard, it is assumed that the borrower is currently able to receive a tax advance for the interest payments made on his or her residential mortgage. It should be noted that the total after tax cost for the thirty years is $302,132.20. For comparison purposes, the following is a table which illustrates a mortgage plan implemented by the system 10 for the same $100,000.00 loan at a higher interest rate of 11.5% per annum, as follows:
TABLE 2
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SYSTEM MORTGAGE
30 YEAR TERM/11.5% PER ANNUM FIXED
ACCUM.
ACCUM. CASH
ANNUAL
COST SURREND.
AFTER CONTAIN.
VALUE
MONTHLY
OUTSTAND.
TAX OPTION FOR
YR.
PAYMENT
PRINCIPAL
COST VALUE EXCHANGE
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1 958.34 100,000 7,705 0 0
2 958.34 100,000 7,705 0 0
3 958.34 100,000 7,705 0 0
4 958.34 100,000 7,705 0 0
5 958.34 100,000 7,705 5,000 3,212
6 958.34 100,000 7,705 0 0
7 958.34 100,000 7,705 0 0
8 958.34 100,000 7,705 0 0
9 958.34 100,000 7,705 0 0
10 958.34 100,000 7,705 10,000 10,477
11 958.34 100,000 7,705 0 0
12 958.34 100,000 7,705 0 0
13 958.34 100,000 7,705 0 0
14 958.34 100,000 7,705 0 0
15 958.34 100,000 7,705 15,000 22,022
16 958.34 100,000 7,705 0 0
17 958.34 100,000 7,705 0 0
18 958.34 100,000 7,705 0 0
19 958.34 100,000 7,705 0 0
20 958.34 100,000 7,705 20,000 40,648
21 958.34 100,000 7,705 0 0
22 958.34 100,000 7,705 0 0
23 958.34 100,000 7,705 0 0
24 958.34 100,000 7,705 0 0
25 958.34 100,000 7,705 25,000 70,782
26 958.34 100,000 7,705 0 0
27 958.34 100,000 7,705 0 0
28 958.34 100,000 7,705 0 0
29 958.34 100,000 7,705 0 0
30 958.34 100,000 7,705 30,000 120,000
231,150
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The Table 2 illustrates that the borrower makes no payments toward principal, and the entire fixed monthly payment of $958.34 is used toward the interest on the mortgage loan. It is also further assumed that the borrower is able to receive a tax advance for the interest payments. It should be noted that the total annual after tax cost to the borrower is $231,150 for the entire thirty year term of the mortgage. This represents a savings, over a conventional fixed term mortgage, of $70,982.20. It should also be noted that the annual after tax cost for each year of the mortgage plan implemented by the system 10, is less than the corresponding annual after tax cost of the conventional mortgage for each year. In this regard, the annual after tax cost year is $7,705, which is less than the annual cost of the conventional mortgage for each year thereof. Thus, the borrower realizes a very substantial after tax savings for the mortgage plan of the present invention, for each year of the mortgage. From the borrower's perspective, there is an additional advantage as evident from Table 2. In this regard, every five years, starting with the fifth year, the borrower may exercise the cost containment option of the mortgage plan of the present invention. A bonus in the amount of $5,000 for the first five years, and an additional $5,000 for each five years thereafter, is paid by the lender to the borrower, should the borrower decide to pay off the mortgage. This bonus is an incentive for the borrower to make timely payments on the mortgage plan. Such timely payments, of course, also benefits the lending company. Considering now the economic advantages to the lending company with reference to Table 2, as mentioned previously the lender realizes substantial economical advantages. Even if the mortgage plan is terminated at an early date, the lender realizes a higher level of income, as compared to a conventional fixed interest rate mortgage. For example, should the cost containment option be exercised by the borrower at the first five year interval, the lending company must pay the borrower $5,000. The accumulated cash surrender value of the life insurance company is then paid to the lending company, in the amount of $3,212.00. Under such early termination of the mortgage, the lending company realizes a net profit of $1,564 over the conventional mortgage illustrated in Table 1. A calculation of that net profit as compared to a conventional mortgage, is shown in the following Table 3:
TABLE 3
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LENDER PROFIT OVER CONVENTIONAL
(5 YEAR TERMINATION)
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$57,506 System mortgage interest
earned for 5 yr.
-51,584 Conventional interest
earned 5 yr.
-5,000 Cost containment paid borrower
+3,212 Ins. co. paid lender/cost
$ 4,128 containment from cash value
-2,564 Insurance premiums paid by lender
$ 1,564 Net profit over conventional mortgage
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As shown in the above Table 3, due to the higher interest rate of an additional 1%, the inventive mortgage plan realizes a net profit of $1,564 over a conventional mortgage, even though the cost containment and the insurance premiums are paid by the lender under the inventive hybrid mortgage plan. Thus, even in the present example of an early termination, the lending company realizes a profit over a conventional fixed term mortgage. Such a profit may even be greater in subsequent years, as the cash value accumulates. The most significant advantage of the inventive mortgage plan to the lender, is the protection against rising interest rates. Should interest rates rise over the term of the inventive mortgage, the investment vehicle in the form of the interest sensitive life insurance policy, provides a growing fund of money for the lender. The fund grows with increasing interest rates, and the lender receives the additional interest in excess of an interest income predetermined by the service computer 12. Additionally, the lender has the right to borrow continuously against the accumulated cash value. Also, the accumulated cash value is considered to be an asset of the lending institution. The object of the mortgage plan is to provide a loan secured by a mortgage to a borrower at either fixed or adjustable interest rates, without the requirement of making principal payments at anytime. With a one time exception, as hereinafter mentioned in greater detail, all payments made by the borrower may be tax deductible on the borrower's federal income tax return, as interest on a mortgage loan. The plan is designed to be so flexible that the mortgage, originated through a primary lender, can be sold to an indefinite number of lenders in a secondary mortgage market through the sale of any number of mortgages from one lender to another. The plan is equally flexible in following the borrower from one property to another property in other geographical locations. The advantage to the borrower in moving from one property to another is that his or her credit and payment record has been previously established. There are no extra costs in providing a new mortgage. The only cost is in the title search and legal costs related to the sale of one property and the purchase of another. The mortgage plan of the present invention includes all of the documents required to effect and to administer the new mortgage. Full documentation is provided for both fixed and adjustable rate mortgages; for fixed or adjustable equity based mortgages; or mortgages sold into the annuity market. The three plans are suitable for marketing respectively as a residential mortgage plan; a tuition loan plan; and retirement mortgage loan plan. Unless otherwise specified hereinafter, only the residential mortgage plan is disclosed herein; although, it being understood that the other two plans are conceptually similar to the residential mortgage plan. Provided with the plans are fully flexible, and the system 10 provides monthly and annual reports on all aspects of the mortgage loan to all interested parties for borrowers up to the age of 100. The mortgage plan provides for an "interest only payment mortgage" for a certain period, such as 15 years, 30 years, 45 years, or an integral in which the face amount of the mortgage loan is matched to the face amount of an interest sensitive insurance policy investment vehicle, and a target cash value equal to the loan at a predetermined period certain. The target cash value is then increased by a 15% load. The borrower agrees to be life insured in favor of the lender, and the life insurance is a pre-requisite to effecting the loan. The additional interest charged by the lender is determined by the period certain that the lender expects the cash value of the policy to equal the loan principal. For example, a thirty year mortgage schedule requires an additional 1% interest payment (above the interest rate charged for a conventional fixed rate mortgage), over the period, whereas a fifteen year schedule requires an additional 3% interest above the conventional mortgage interest rate. At periods certain, the lender agrees contractually according to the plan to pay the additional interest back to the borrower. This is the cost containment clause option. To earn the privilege, the borrower must have maintained a prompt and timely payment schedule, and otherwise adhered to all of the conditions of the mortgage plan. The borrower must apply for these payments within thirty days of the last month before the fifth, tenth, fifteenth, twentieth, twenty-fifth, or thirtieth anniversary of a thirty year loan. The payment is made to the borrower in cash. In agreeing to make the payment, the borrower must retire the mortgage in the full amount at the elected option dates. The lender agrees, at the request of the borrower to transfer all rights of the insurance policy held by the bank on the life of the borrower to the borrower upon payment of the amount paid by the bank for the policy. It should be noted that the funds paid by the lender to the borrower at this time, may incur a tax-deductible expense for the lender and a taxable event for the borrower. It should also be noted that the cash values in the policy usually exceed the cost of the policy at the time of the purchase. As the borrower now owns the policy, he or she may withdraw, without further tax implications, an amount sufficient to pay the tax on the amount awarded by the lender at the option date. The borrower may not, however, withdraw an amount in excess of the amount he or she paid for the policy, without tax implications. The new plan is designed to maintain a target cash value in years certain, to enable the borrower to borrow from the cash value of the policy, enough to pay the lender the total amount of the mortgage and thereby cause it to be retired. There remains in the policy an amount sufficient to maintain the policy, by paying the annual required premium and loan interest from the non-impaired capital and interest in the policy. On the death of the insured, the outstanding loan is repaid from the non- taxable death benefit. In addition, the mortgage plan may provide for making the mortgage payments for the borrower, in the event that the borrower becomes unemployed. According to the plan, after 30 days of unemployment, the mortgage plan provides for the mortgage payments on behalf of the borrower, until the borrower obtains new employment or for twelve months, whichever comes first. Considering now the advantages to the lender for adopting the mortgage plan implemented by the system 10, in greater detail. Firstly, the lender is protected against rising interest rates, due to a rapid increase in the lender's surplus, (the total mortgage plus the annual increase in cash value of the interest sensitive life insurance policy). Also, the lender receives larger mortgage interest earnings, without additional investment expense as compared to a conventional mortgage. Therefore, the lender has protection from interest fluctuations over the term of the new mortgage plan. If interest rates increase, the interest earned by the insurance policy increases and the lender may withdraw the excess earnings at any time to balance the current income. Furthermore, there is a pool of reserves from which the lender may borrow at guaranteed interest rates. There is no re-investment of capital from small principal repayments. Also, there is added security for the mortgage loan due to the investment vehicle. The lender may, under certain conditions, deduct the premiums paid for the insurance on its income taxes as a necessary business expense. The lender may charge, as a normal business expense, the costs of payments to the borrower of the cost containment options. If the borrower should die during the period of the loan, the lender is assured of the mortgage obligation being paid, and the property is maintained as an asset unless, the lender has assigned the death benefit of the policy to a third party. In this regard, the death benefit replaces the accumulated cash value. If the borrower becomes unemployed, all mortgage payments continue to be paid up to one year thereafter. Considering now in greater detail the advantages to the borrower resulting from the inventive mortgage plan. Firstly, the cash flow and after tax costs on an "interest only" mortgage plan are considerably less than a flexibility in his or her mortgage arrangements, in that, the same mortgage commitment and payment plan can be transferred to any credit worthy property that he or she purchases subsequently. The borrower pays off the mortgage in the same period that he or she would have done so with a conventional mortgage without any principal repayment. The borrower can arrange mortgage life insurance as with any conventional mortgage, if he or she so chooses. The borrower may enjoy a fixed rate mortgage for long periods. The principal may be paid off at any time. The cost containment option creates a real interest charge, no greater than the conventional mortgage. Also, if the borrower becomes unemployed, the borrower can maintain the ownership of his or her residence, and thus the borrower's peace of mind is eased during the transitional period between employers. The system 10 effects a close supervision and maintenance of substantially all of the integral parts of the plan. The system 10 provides an ability to incorporate specific data for a large number of insurance companies, and it is capable of seeking the most competitive rates of such insurance companies, subject to certain industry accepted standards. The system 10 provides service support for a large number of mortgage lenders, both as direct writers of the mortgage plan, and as secondary and tertiary markets for a single borrower utilizing the mortgage plan. The system 10 enables the borrower to move from one residence to another, while retaining the same mortgage plan for the current residence. Thus, without incurring another loan origination fee, the borrower can relocate repeatedly in a convenient manner, any number of times during the life of the mortgage plan. Since the borrower is permitted under the terms of the mortgage plan to obtain a greater amount of financing, each relocation can cause a possible change in insurance amounts, mortgage payments, monthly payments, years to complete the program, new secondary markets, etc. The ripple effect from any of the changes must be recorded throughout the mortgage plan by the computer program of the system 10. The computer program is also designed to cause monthly statements to be generated for each lender on the status of the insurance program supporting the mortgage plan to be generated. The reports show the amount that was assumed to be credited to the account and the actual amount credited (such as the change in the proposed and actual interest rates). The reports also show the lender the accumulation in both accounts and any action taken by the lender, as far as invading the accumulated amounts. The borrower receives a status report annually on his or her mortgage, reflecting the total interest paid to the lender and the amount that may be taken from various tax levels, such as federal, state, county, and city, taxes. The system 10 shows the annual accumulation and the amount credited to the cost containment option as hereinafter described in greater detail. In the appropriate years, the system 10 prepares an authorization to activate the cost containment option and the ongoing options and features. The program also provides a continuous reporting to the borrower after he or she has opted to purchase the insurance policy from the bank. This part of the mortgage plan continues until the death of the policy owner, and it provides annual reports about the borrower's policy loan, interest charged on the loan, interest credited to the impaired cash value, the unimpaired cash value, and the interest credited to the unimpaired cash value. The system 10 provides an annual report on the status of the policy, after such report is received from the insurer. Furthermore, on a specified month of each year, such as in February, the system 10 develops a report for Federal, State and City tax authorities indicating the amount of interest paid during the year; the principal repayment, if any; refinancing expenses; insurance expenses and cost containment payments. The computer program of the service computer 12 is designed as a continuous cycle, to cover one or more changes on the part of the lender, borrower, insurer, administrator, tax law, or third party beneficiary, which affects a number of related mortgage plan activities. (D) SYSTEM COMPUTER SOFTWARE Referring now to the flow charts illustrated in FIGS. 2-9, each insurance company of the system 10 has one or more dedicated databases stored in its computer for its investment vehicles to help collateralize the mortgage of the inventive mortgage plan. For instance, each insurance company can have three different types of investment vehicles in the form of insurance policies, which are known generically as "Universal Life", "Whole Life", and "Annual Premium Interest Sensitive Ordinary Life". Such policy structures require certain data to be entered into the corresponding databases stored in the insurance company computers, and copies thereof, sent therefrom to the common service computer 12 for storage therein. Thus, the insurance data bases stored in the service computer can be updated periodically, so that the insurance information can be maintained current. The input data includes such information as the product parameters, data by age, amount discounts, mortality costs, administrative charges, current interest rates, calculations on accumulations, loan charges and other such similar information. The input data can be modified as necessary to reflect the current information. Such information is stored and can be retrieved by a general search for the most competitive rates by age and amount, or to elect a single insurance company, if that is preferred by the lender. Considering now a specific example, with reference to FIG. 2 of the drawings, the program starts at "A" as indicated, and then proceeds through the Insurance data bank. The information comes from the Borrower's (and Lender's) file. His or her data includes the borrower's age, sex and rating (smoker or non-smoker). The program then at 190 performs a random search of the insurance companies to search for the current "cost of insurance" current interest rate credited, current surrender charges, and current expense factors. The company offering the best program is then determined. After determining the company, the program enters its data bank at 191, and from the borrower's file, starts to match age, sex, and rating. It first asks Smoker or Non-smoker status to determine the path to follow. If non-smoker status is elected, it then asks whether Male status. A positive response then selects the appropriate number of years and finds from the data, the present value of $1,000 in the future. Thereafter, that data is combined with the cost of insurance, the surrender charges and expense charges (if any), and then proceeds to prepare the formula. The completed data is then held in memory (not shown) of the service computer 12, until the mortgage data is prepared. If the response is negative, the program seeks the information from the female Non-smoking rates and holds the completed numbers in memory in the service computer as the program then goes on to the data bank. If at the prompt, the response is "Smoker", the next prompt asks if "Male", the "Yes" prompt then seeks the age and prepares the formula as described. It holds the information in memory to be collated with the other information. If the answer is "No", then the female smoker rates and interest computations are held in the memory of the service computer, to prepare the full proposal. This example will now be considered in greater detail. In order to establish the yearly insurance premiums to effectuate the inventive mortgage plan, the face amount of the insurance policy is determined by the system 10 so as to establish a sufficient investment fund in the cash value of the insurance policy. In this regard, the software of the computer system 12 calculates the insurance premium, which is a total of three components. In this regard, there is the investment fund portion, the insurance risk portion, and an administrative portion for the insurance company. This formula may vary from one insurance company to the next, but the service computer 12 stores the current data information for each insurance company, together with the actuarial formula for each company. The service computer 12 bases the investment fund portion on the amount of the mortgage plus 20 percent. The additional 20 percent allows for the additional features of the mortgage plan, such features as the lender protection as previously described, the cost containment option, and the self-servicing policy provided for at the end of the mortgage term. Whereas, the insurance risk portion is based on the exact amount of the mortgage. The administrative portion is always a fixed constant for each insurance company. A subroutine is run to determine the annual insurance premium cost of the inventive mortgage plan. A Borrower Data File 13 is used to determine the Borrower's (a) age, (b) class (smoker or non smoker), and (c) sex (male or female). The file 13 is a part of the mortgage information received from a given insurance company, and is stored in the computer 12. The file 13 also includes the amount of the mortgage, and the period in which the cash value must equal the amount of the mortgage plus 20 percent. The file also contains the projected interest rate assumed for the Universal Life Insurance Policy. In order to calculate the investment portion of the insurance premium cost, the program causes the file stored in the computer 12, to be searched for the annual payments made in advance, that will amount to $1,000 in a number of years certain, at the determined interest rate. Such information is a part of the computer information received from the insurance company, and stored in the computer 12. That number is then multiplied by the mortgage amount plus 20 percent; e.g., a $100,000 mortgage at 9.5% in which the amount is due in 30 years, would require $120,000 at $6.10 per 1,000, or ($6.10.times.120)=$732 annually. The program then causes the computer 12 to search for the file containing the annual insurance risk costs for the insured category (male, non smoker, age 30). All of the risk values are added together for the specific number of years (e.g., 30 year mortgage) is age 30+31+32+33 34+35+36+37+38+39+40+41+42+43+44+45+46+47+48+49+50+51+52+53+54+55+56 57+58+59. The result of this number, which is the cost per $100,000 of protection, is then multiplied by the mortgage amount from a stored file, and divided by $1,000. For example, $1000,000 mortgage for 30 years for a male, non smoker, age 30, the total risk cost for 30 years is $64.83 per 1,000 from the file. The program multiplies this number by the amount of the mortgage, and thus the total risk cost is 64.83 multiplied by $100,000 divided by $1,000=$6,483 for 30 years. Then by dividing that amount by 12, there is obtained an annual risk cost of $216.10 per year. The investment amount is added to the annual risk portion. Thus, $216.10+$732.00=$848.10 annually. However, this total amount must be tested by iteration to target the correct amount, because the slight fluctuation in the risk amount may overreach the target. The program then causes the following calculation to proceed: iterate: E=[A+F-(B.times.C)].times.(1+D), until: E=M+XM, where: A=annual insurance premium B=annual risk portion per $1,000 C=amount of the mortgage divided by $1,000=M.RTM.1000 D=elected cash value interest rate E=accumulated cash value plus interest F=accumulated cash value plus interest (E) from previous year M=amount of the mortgage X=fixed percentage By the above formula, the accumulated cash value plus interest (E) is iterated, until it is equal to a target amount, which is the amount of the mortgage (M), plus a fixed percentage (X) times the amount of the mortgage (M). In the present example, X=20% and M=$100,000. Therefore, the annual insurance premium (A) is varied, until: E=$100,000+(20%) ($100,000)=$120,000. According to the formula, in order to calculate E, an assumed annual insurance premium (A) is added to the accumulated cash value plus interest from the previous year (F), less a risk component (B.times.C). The resulting amount is multiplied by one plus the interest rate, to give the current cash value plus interest. The risk component is calculated by determining the annual insurance risk portion (B) for a given year per $1,000 of coverage from a file, and multiplying it by the amount of the mortgage divided by $1,000 (C). Thus, the risk component is determined by a given insurance company and must be applied to the given mortgage amount for each year. The value for E is calculated for an assumed value of A for the first year of the plan. Utilizing the value of E for the first year, then the value for E for the second year is calculated. This process is repeated for each year of the mortgage, until the final year (year 30) is calculated. If the resulting amount is less than the target amount ($120,000), then a different value for the annual premium (A) is selected. If the result is less than the target amount for E, then the difference is taken between the calculated value for E and the target value for E. The resulting difference is then added to the previously-used assumed value of A, to provide another value of A for the calculations. The formula for E is then repeated for the term of the mortgage to determine the value of E for the final year of the mortgage (year 30). If that calculation differs from the target value for E, another value for A is selected, and the calculations are then repeated. If, at any time, the resulting calculation of E for the final year of the mortgage is higher than the target value for E, then $1.00 is subtracted from the previously used value for A, to determine a new value for A to be used in another calculation run for the value of E at the end of the mortgage. Once the calculated value for E equals the target value for E, then that value of A is used for the annual insurance premium. As an example of the iteration calculation, assume that A=$848.10, and that D is equal to 91/2%. It can be assumed that the interest rate for the cash value accumulations is to the mortgage plan interest rate. The value of C is the amount of the mortgage ($100,000), divided by $1,000, which equals 100. For the first Year, the value of B=1.30. The calculations proceed as follows: Year 1: 848.10+0-(1.30.times.100).times.1.095=786.31 Year 2: 848.10+786.31-(1.26.times.100).times.1.095=1,651.70 Year 3: 848.10+1,651.70-(1.24.times.100).times.1.095=4,632.81 Year 4: 848.10+4,652.81-(1.24.times.100).times.1.095=5,865.81 Year 5: 848.10+5,865.81-(1.24.times.100).times.1.095=6,491.85 Year 6: 848.10+6,491.85-(1.24.times.100).times.1.095=7,901.46 Year 7: 848.10+7,901.46-(1.25.times.100).times.1.095=9,443.90 Year 8: 848.10+9,443.90-(1.28.times.100).times.1.095=11,129.92 Year 9: 848.10+11,129.10-(1.33.times.100).times.1.095=12,969.92 Year 10: 848.10+12,969.92-(1.38.times.100).times.1.095=79.62 Year 11: 848.10+14,979.62-(1.44.times.100).times.1.095=16,439.57 Year 12: 848.10+16,439.57-(1.50.times.100).times.1.095=18,765.57 Year 13: 848.10+18,765.57-(1.57.times.100).times.1.095=21,305.24 Year 14: 848.10+21,305.24-(1.65.times.100).times.1.095=24,077.24 Year 15: 848.10+24,077.24-(1.75.times.100).times.1.095=27,101.62 Year 16: 848.10+27,101.62-(1.85.times.100).times.1.095=30,402.37 Year 17: 848.10+30,402.37-(1.97.times.100).times.1.095=34,001.36 Year 18: 848.10+34,001.36-(2.09.times.100).times.1.095=37,931.30 Year 19: 848.10+37,931.30-(2.23.times.100).times.1.095=42,219.26 Year 20: 848.10+42,219.26-(2.37.times.100).times.1.095=46,899.24 Year 21: 848.10+46,899.24-(2.53.times.100).times.1.095=52,006.30 Year 22: 848.10+52,004.30-(2.67.times.100).times.1.095=57,583.21 Year 23: 848.10+57,583.21-(2.82.times.100).times.1.095=63,673.49 Year 24: 848.10+63,673.49-(1.97.times.100).times.1.095=70,325.93 Year 25: 848.10+70,325.93-(3.14.times.100).times.1.095=77,591.73 Year 26: 848.10+77,591.73-(3.31.times.100).times.1.095=8,529.17 Year 27: 848.10+77,591.73-(3.57.times.100).times.1.095=94,192.19 Year 28: 848.10+94,192.19-(3.87.times.100).times.1.095=103,645.35 Year 29: 848.10+103,645.35-(4.19.times.100).times.1.095=113,961.52 Year 30: 848.10+113,961.52-(4.58.times.100).times.1.095=125,215.02 The target amount was determined to be $120,000, and the resulting calculation is larger than the target value. The program through iteration lowers the annual deposit by the accumulated value of $1.00 with interest at the end of a number of a year certain (e.g., 30) reducing the annual amount by that factor. Again, through iteration, the target amount of $120,000 is eventually reached. On determining annual growth of the policy, the annual expense factor is then selected through the same process. The file contains the annual "surrender charge" or expense factor for each year (see data file). This charge is then multiplied by the face amount and extended to the current cash value. As each year passes a new surrender charge is selected. The formula is A-(B.times.C) (1+0.095)=D A--current cash value from previous series B--the surrender charge corresponding to attained age, sex, and class (smoker/non smoker) C--the face amount D--the annual cash value Thus, in the previous example - male, non smoker, age 25= Year 1: 786.31-(9.98.times.100)=0 Year 2: 1,651.70-(10.04.times.100)=647.70 Year 3: 4,632.81-(10.23.times.100)=3,609.81 Year 4: 5,865.81-(10.26.times.100)=4,839.81 Year 5: 6,491.85-(10.44.times.100)=5,447.85 Year 6: 7,901.90-(10.61.times.100)=6,840.46 Year 7: 9,443.90-(10.91.times.100)=8,352.90 Year 8: 11,129.58-(11.01.times.100)=10,028.58 Year 9: 12,969.92-(11.28 X 100)=11,841.92 Year 10: 14,479.62-(11.73.times.100)=13,306.62 Year 11: 16,439.57-(11.94.times.100)=15,245.57 Year 12: 18,765.74-(12.51.times.100)=17,514.74 Year 13: 21,305.24-(13.02.times.100)=20,003.24 Year 14: 24,077.24-(13.73.times.100)=22,704.24 Year 15: 27,101.62-(14.39.times.100)=25,662.62 Year 16: 30,402.37-(15.24.times.100)=28,878.37 Year 17: 34,001.36-(16.04.times.100)=32,397.36 Year 18: 37,931.30-(16.85.times.100)=36,246.30 Year 19: 42,219.26-(17.60.times.100)=40,459.26 Year 20: 46,899.24-(18.74.times.100)=45,025.24 Year 21: 52,006.30-(19.62.times.100)=50,044.30 Year 22: 57,583.21-(20.53.times.100)=55,530.21 Year 23: 63,673.49-(21.65.times.100)=61,508.49 Year 24: 70,325.93-(22.46.times.100)=68,079.93 Year 25: 77,591.73-(23.78.times.100)=75,213.73 Year 26: 85,529.17-(24.91.times.100)=83,038.17 Year 27: 94,192.19-(26.25.times.100)=91,567.19 Year 28: 103,645.35-(27.83.times.100)=100,862.35 Year 29: 113,961.52-(29.29.times.100)=111,032.52 Year 30: 125,215.02-(31.29.times.100)=122,086.02 The program is the basis for annual reports and other updates and is then used as the basis for the annual reports. Current interest rates are placed on file and are made concurrent. As shown in FIG. 2 of the drawings, a mortgage databank as indicated at 6D is stored in the service computer 12 of the system 10, and data concerning the principal, interest and monthly payments on conventional mortgages for a relatively long period of time and for a relatively wide range of interest rates, are compiled. For instance, the data can be compiled over a range of 1 to 50 years and for interest assumptions ranging from 0 to 35 percent. The mortgage amounts can be limited to $2,000,000. The mortgage data bank also stores the monthly payments on an interest only loan for a given amount. Current rates of taxation are compiled in a rates of taxation databank 7D for illustrating the effect of the principal and interest accumulation after tax for a given borrower. Should the borrower show interest in pursuing the program offered by the system 10, an administrator receives a copy of the borrower's medical information and mortgage application. Such information is then entered into the borrower's permanent file, along with the upgraded insurance/mortgage file, and is treated as a permanent file replacing any proposal information. At this point, the program of the system 10 causes the support documents to be prepared the Narrative Disclosure and Truth in Lending documents which include the borrower's name, address, and appropriate mortgage, insurance and Cost Containment Option data. One of the four mortgage documents is either a fixed or adjustable rate mortgage, as either a first or second mortgage. If desired, other mortgage documents can be added to the base selection. The pertinent information is added to the proper document and the package is forwarded to the lender via the modem connection between the lender and service computers. The lender in turn completes the insurance application and forwards the documentation to the service computer 12 (FIG. 1). While the information or documentation can be sent from the lender's computer, such as the computer 14A, to the service computer 12 over the modems 20A and 22, and the telephone link 13, for processing, the information can alternatively be stored on conventional storage devices, such as a floppy disk, and mailed to the service computer 12 for processing. The service computer 12 in turn records the submission of the information and documentation from the lender, and forwards the application to the insurance company for entry on its computer, such as the computer 16A. Upon issuance, the insurance policy is forwarded to the lender. An assignment is then entered in both the lender's and borrower's databases. A monthly status report is then sent to the lender showing the number of mortgages issued (and remaining) with the lender, the total amount of the assumed interest accumulation, the total amount of the accumulated actual interest, the loans made against the cash value accumulation, the amount of interest due on those loans, and the date of the upcoming options and the amount that may be due. Such information further includes the monthly premium billing and the monthly charges due to the service company providing the service computer support. A semi-monthly review is made on all accounts to upgrade the information. The upgrade includes any transfer of mortgages from one lender to another lender, as well as any change of interest or other data from an insurer, any change in assignment of the insurance assignments, any change in tax information, and any change in the borrower's credit status. Corresponding changes in automated document forms are also made. The annual reports to the borrower reflect substantially all the information that he or the is required to have for the preparation of an income tax return. The annual reports provide the cost of mortgage insurance, the total amount of interest paid and, if the borrower has elected to take an option, as it will be explained later in greater detail, he or she would receive the total amount of the option credit and the amount of the tax due assuming three illustrated tax brackets. The reports also indicate whether the amount of the option credit should be included in the borrower's income for that particular year. The reports further indicate the amount withdrawn from the borrower's cash value, the amount remaining therein, and the amount due to clear the mortgage. In the event the option date has passed, and the option has not been exercised by the borrower then the borrower will be notified of that fact on a semi-monthly basis until the next time the option can be exercised. If the option has been exercised by the borrower or a final option date has been reached, the service computer 12 notifies the lender computer 14A via modem connection, that the option is taking effect, of the amount due to the borrower, the amount due to the lender, and the amount of the cash value that will be available under the policy. The service computer 12 then prepares an assignment of the cash values, the death benefit and the beneficiary designation from the lender to the borrower under the contract. The service computer 12 prepares the final mortgage statement and the tax credit documents for the lender including a temporary power of attorney to a trustee to withdraw a cash value equal to the outstanding mortgage amount from the insurance policy and to draw a check for that amount in favor of the lender. The service computer 12 provides mortgage release forms and assignment forms, to be completed by the trustees for both parties to effect the transfer. The package of documents prepared includes the cost containment check from the lender to the borrower, and all the necessary documentation to record the transaction and to clear the mortgage obligation from the lender's and borrower's status file, while a hard copy and a microfiche of all such documents are retained by the trustee. All checks from the insurer, from the lender and from the borrower are certified, and are held by the trustee. Such checks are distributed simultaneously to all the parties. The outstanding loan is thus transferred from the lender to the insurance policy, and the guarantee for the loan is transferred from real property to the cash value of the insurance policy. There are no further payments made by the borrower to either the lender or to the insurer. The program maintains the insurance policy in force on a loan basis. Each year the insurance policy is maintained and the policy holder receives an annual statement showing the loan guaranteed by the cash value of the policy, the annual and accrued interest charges, the interest credited to the impaired cash value and the annual and accrued interest to the unimpaired cash value. The cycle is completed upon the death of the insured, and the loan principal is paid off completely to the lender from a tax free death benefit. The excess death benefit over the loan is paid directly to the named beneficiary without tax implication. D1 INSURANCE DATA COMPILATION In order to calculating the insurance costs, the computer program stored in the service computer 12, is designed to accommodate the information that is required to calculate the annual costs of the plan offered by the system S. The program is designed to calculate the death benefit required, and the projected target cash values at current interest rates, on an accumulated basis, as well as on an annual incremental basis. The program also projects the guaranteed cash value, both on an accumulated and incremental basis. The program is designed to cause the display of, and to record, the amount of cash value impaired by loans and the interest charged to the impaired loan at fixed contractual rates. Such rates vary from one insurance company to another. The program also causes the display of the interest credited by each company to the cash value impaired by the loan. Whenever the cash value is not impaired fully by the loan, the program caused the recording of all of the current interest rates applicable to the non-impaired portion of the cash value The three preferred types of insurance policies which can be involved in the present plan, are generally known as "Universal Life", "Single Premium Interest Sensitive Ordinary Life", and "Annual Premium Interest Sensitive Ordinary Life". The "Universal Life" policy is the most flexible policy of the three policies. The face amount of the policy can be adjusted either as an increase, or as a decrease. The cash value can be enhanced by premium increases, or it can be reduced by lowering the premium or skipping the premiums. The Universal Life policy is generally sensitive to the fluctuations in the cost of money, and reflect changes in the interest rate credited from time to time by the various companies. These interest assumptions are entered in the service computer 12 under the control of the computer program, on the date that such assumptions are effective. They would then create the income for the ongoing status of the non-impaired cash values, until further announcement is made. Each insurance company also guarantees a minimum interest rate, and although these vary from company to company, the guaranteed interest rate is fixed for the life of the insurance contract. These are recorded as minimum guarantees and are provided to the lender, until the policy is assigned and then the information is provided to the borrower. Although Universal Life is generic, and each company employs similar formulas, the emphasis that they place on particular portions of the formula provides a particular competitive edge. Interest sensitive life insurance policies are not as complicated in design and are less complicated to enter and set up files under the control of the computer program. The interest generation is relative to the flexible interest rate on the developed cash value. Universal Life insurance is comprised of a series of elements. Some of the these elements concern the present mortgage plan, while others do not. The elements that do not concern the present plan, however, are available in non-integrated data banks. For Universal Life insurance, as indicated in FIG. 6, each insurance company sets a "minimum premium" for each $1,000 of protection. These premiums are scaled for males and females, and each one of these classes is sub-divided with smokers and non-smokers. The difference is in the basic rate by class and habit, and are reflected in the mortality charges. Maximum premiums per $1,000 of the death benefit are set by federal statute under the Internal Revenue code. Between these two extremes, any amount may be paid into the program. From this premium, there are monthly charges made for: (A) mortality, (B) surrender charges, (C) administrative fees, (D) interest on policy loans, (E) withdrawals, and (F) loadings. Such components are the profit margins that the insurer is charging against the sale of the insurance policy for its profit. There are credits recorded for: (A) premiums paid; (B) quantity discounts; (C) interest on unimpaired funds; and (D) interest on impaired funds. The unimpaired funds are credited with current rates, and the impaired funds are credited at a contractually fixed rate, which is relevant to the interest charged by the insurance company on policy loans, usually a differential of about 1%. The current interest rate may fluctuate monthly with some insurers and intermittently with others. Thus, the interest factor is recorded promptly to reflect all future interest credits. The Universal Life policy also permits additional insureds, which are reflected in the mortality costs only, and further permits increases and decreases in the death benefit at any time, subject to certain underwriting conditions. These changes must be reflected immediately in the computer program. D2 SINGLE AND ANNUAL PREMIUM INTEREST SENSITIVE WHOLE LIFE Single and annual premium interest sensitive whole life insurance policies are not as complicated insurance policies as the Universal Life policy. They are however, sensitive to current rates of interest on the accumulated cash values, guaranteed rates of interest on one cash values and the rates of interests credited and debited to the part of the cash value that is impaired by loans. D3 THE MORTGAGE DATA BANK As indicated at 6D FIG. 2 of the drawing, considering now in greater detail, the Mortgage Data Bank is a sub routine of the computer program stored in the service computer 12, and is entered with amortization tables, which are manipulated to calculate the monthly, quarterly, semi-annual, or annual payments; the monthly reduction of principal; the monthly interest earned; the cumulative interest earned; the number of payments; variable interest rates; balloon payments; and when due. It causes the generation of interest only amounts and the balloon payment required at the end of the period at 6D. Both calculations are required to develop a composite quotation. They are also required to prepare the mortgage documentation, and key information is extracted from these files for the "Truth in Lending" and "Narrative Disclosure" documents for the mortgage plan. D4 THE TAX BASE DATA BANK As shown at 7D in FIG. 2 of the drawings considering now in greater detail, the tax base data bank is a third sub routine which provides the tax tables and the multipliers which calculate the annual and cumulative costs of after-tax principal payments, and the annual and cumulative cost of interest pre-tax payments.; These calculations are incorporated in the computer program as part of the calculations for purposes of developing the ledger proposals at 7D. The information required to prepare the ledger proposal is obtained from the borrower file at 13, and transferred from within the system to various areas in the program, as either transient information or permanent information. The information entered into the program for Universal Life insurance must follow a pattern. The Insurance Company supplies the rates and data required for its product. The information is entered in the appropriate order, and is described in greater detail in the following section describing the Individual Routine for Single Company Data Bank at 42 through 58 of FIG. 6. D5 INDIVIDUAL ROUTINE FOR SINGLE COMPANY DATA BANK As indicated at 42 through 58 of FIG. 6, if the drawings, certain formats are followed, and two outputs are produced. The client information is entered into the program of the service computer 12 via a terminal at one of the lender computers or at the service computer 12, and the information includes the age, sex, and the smoker or non-smoker status. It also requests a "target cash value" in years certain. The computer program then develops, on a monthly basis, the annual cost of insurance by adding the "mortality costs", the "loading", the "expense charges", "partial surrenders", "loans", "interest charged to loans", and reduced the amount by "interest credited to loans." The target cash is then entered as an amount required in a number of years certain. This required annual (or, if desired, the semi-annual, quarterly or monthly rate, as previously explained, is then broken down through iteration to achieve the amount at current cash values. The entire proposal is saved in the Borrower's File at 13 (FIG. 3). The face amount and the columns showing the year by year increase of the accumulated cash value, and the annual cash value increase, are all illustrated. The same data is then entered into the amortization program, which then develops an amortization table of monthly interest and principal required to provide a conventional mortgage. The amounts are annualized, and the annual principal and annual interest, are multiplied by the appropriate tax factors (the pre-tax and after tax cost of money.) The annual cost of interest only is multiplied by the pre-taxcost of money. A summary comparing the cost of a conventional mortgage with the system mortgage is summarized. This information is then printed, and is sent to the lender in hard copy, ASCII print code or facsimile reproduction of the hard copy. For a more complete description, reference may be made to the description under the Section entitled Individual Routine for Single Company Data Bank. The summary sheet is not maintained in the computer file, since it can be reproduced at any time from the Borrower's files. A hard copy is maintained for 12 months. The amortization tables accept the principal amount of the note from the client's file and the number of years for amortization, the interest to be assumed, and calculates the principal and interest payments. The files or appropriate columns are then multiplied by an assumed tax factor, which then calculates the annual and accumulated cost of after tax payments. Lender data which establishes a number for each lender, establishes the file to include the total information required for each lender. The information can be retrieved by any access: name of lender; Corporate Officer; any part of the address; number of mortgages; amount of mortgages; inception date of contract, as hereinafter described in greater detail. Borrower data includes a number for each followed by the borrower's lender number. The data contained includes the current address of the borrower; the address of the proposed property to be mortgaged; the purchase price of the property; the amount of the mortgage; the proposed rate; the age and sex of the borrower; the time certain of the proposed mortgage at 9. From this input at 8 at FIG. 3, a lender is billed a service charge by the service company, and invoiced on a regular monthly basis for all current mortgage activity at 10-11. After establishing a lender contract, the lender then orders quotations and/or installs programs for the borrower. The lender first orders a proposal for a prospective borrower, and receives it from the service computer with all of the pertinent information and documents. To provide a quotation, the borrower information, on file, is used to develop an illustration, which is a report providing sample information on the mortgage plan of the present invention. The illustration report is calculated and compiled by the service computer 12, and an illustration message is sent via modem link to the printer of the requesting lender, where a hard copy is printed. This copy of the illustration includes or excludes, if desired the Lender's data (or part of it). If it is required, the computer program causes the Lender's data to be tied in with the Borrower's data. The program then routes through the Borrower's data and goes back to (or skips the Lender's routine if requested), and searches for a company. Either the most desirable company is determined, or a selected company and plan is selected by company code. The computer program then proceeds to point A, and a company is selected by code. Reference may be made to the drawings illustrating Subroutine Insurance Data Compilation and the Individual Routine for Single Company Data Bank. The information on the Borrower's File at 13, transfers the amount of the mortgage; the years certain for the mortgage; the "Conventional Current Interest Rate"; the inventive system Rate; the full name of the prospective borrower; the current address of the borrower's address of the proposed property to be mortgaged; the age of the borrower and the name and the age of other borrowers, if there are any. The file also transfers the file code of the lender and the file code of the borrower. As indicated at FIG. 3, the information is transferred in the following order to the selected company at 317 or 318. The code number of the Borrower is sought. From this information there is determined the age of the primary borrower, the class, and smoker or non-smoker. Thereafter, the mathematics of obtaining the target amount required by iteration is performed. The monthly and subsequent annual net amount of the cash value subject to interest earnings is determined, and through iteration, at the target year, there is determined the annual and monthly premiums required to reach that goal. As shown in FIG. 6 of the drawings, the program selects from age at 42, and selects base rate from 43-46 depending on the sex and smoker or non-smoker rate. The base rate is then multiplied by the number of 1,000's required as shown at 47. The cost of insurance at 48 is multiplied by the number of 1,000's and deducted from the base rate. The loading at 49 is multiplied by the number of 1,000's and then deducted from the base rate. The expense charges at 50 multiplied by the number of 1,000's and then deducted from the base rate. The partial surrenders at 51 are totaled, and then deducted from the gross rate. The loan amount at 52 is deducted, and multiplied by the net amount of interest charged (interest charged on loans minus the interest credited on loans at 53). Loan and net interest charges are then added, and then deducted from the base rate. The final number is the net rate per thousand. The balance is then projected at current interestrates at 54, compounded to year certain. By iteration, present value of required annual premium is then iterated. Then, the year by year value is caused to be printed at current interest rates, and then year by year value is caused to be printed at guaranteed interest rates. The program then moves to the mortgage amortization table, and then the mortgage payments are determined by number of years at 55, and the interest rate at 56, and then the monthly payments required, the annual interest paid, and the annual cumulative interest paid by year are recorded on file. There is also shown the monthly property taxes held in escrow by the lender. At 57, an interest factor is added to the Conventional Mortgage, and projects the outstanding principal at 58, the accumulation costs of the Cost Containment Option at 59, and the Accumulated Cash Surrender Value at 60. These factors are then multiplied by the appropriate tax factors. The interest factors are then multiplied by the appropriate tax factors, in the 15% tax bracket the interest columns are multiplied by 0.85 and the principal is multiplied by 1.1725, in the 28% tax bracket the interest columns are multiplied by 0.72 and the principal is multiplied by 1.3584. In the 33% tax bracket, the interest is multiplied by 0.67 and the principal is multiplied by 1.489. Having developed the statistics required to create a quotation or illustration, as indicated in FIG. 3, the program then advances to Routine Program Set 1. As indicated at 319, a decision is required "Do you want to print an illustration?" When a positive reply response, the program then picks up the information from the previous entries and structures it into an "illustration". The illustration is reviewed for accuracy, at 320, and if the illustration is correct, tee operator then "prints" the illustration at 321. After the illustration is printed with an explanation at 322, the question is asked on delivery. Three methods of delivering the illustration to the lender may be accessed; hard copy at 323; auto dialed modem (from Lender File) at 324; or sent by facsimile reproduction at 325. The file remains open until a response is received from the lender, or for 120 days, whichever is earlier. If no response is received in 120 days, the borrower file is purged. If a response is received from a lender, the response includes: a copy of the mortgage application; an insurance application from the Lender on the life of the borrower(s), a completed Medical Questionnaire on the part of the borrower(s); a release for financial information; and a release for medical information. The file is searched for information on "Mortgage Life Insurance," "Unemployed Borrower's Insurance," and "Disability Insurance". The application for the mortgage is then checked against the original information on the quotation (9-1213), and then proceeds through "No" at 314 to "Do you want to upgrade lender's file." Assume the answeris "No", and the program advances to the decision point identified as, "Do you want to upgrade borrower's file" at 327. At a "Yes" prompt, the operator then enters new data from the file recording: the new mortgage principal; interest; term of the inventive mortgage loan (or other type of inventive loan), fixed or flexible; terms of loan (anniversary or flexible reviews); Borrower Mortgage Insurance at 328 (amount, premium carrier number); Disability Insurance at 329 (amount of premium, waiting period, term of coverage, amount of coverage, carrier number); and Mortgage Life Insurer at 30 (amount, length of coverage, premium, beneficiary). This information is entered into the Borrower Data File, and proceeds then through "No" at 314, and from there to the decision point identified as, "Do you want to update lender file?" at 326. A "Yes" prompt then asks, "Do you want an annual report?" at 327B. A "No" prompt then asks, "Do you want lender information?" at 315. Assuming a "No" prompt, the program then proceeds through "No" at 317, to box 318 where the company is elected as chosen in the quotation. The new FIGS. are entered, and all the information is held as developed in the Subroutine, and then proceeds in due coarse. The question, "Do you want to print an illustration?" at 319 is a "No prompt"and then there is prompted "Has mortgaged property changed locations?" at 327. A "No" prompt then causes the question, "Send mortgage documents" to be asked. A "Yes" prompt then causes pre- set documents by State approvals to be purchased at 329. The documents are assembled by the appropriate state, and the information held in the updated borrower file is brought through at 329, and the appropriate information is entered into the documents. After the proper documents are collated with the appropriate details from the processed borrower's file, the question is asked, "Is truth in lending sent?". A "Yes" prompt causes the "Narrative Disclosure Document" to be prepared at 32. The decision point at 31 asks, "Prepare a hard copy?", at which point the printer is caused to prepare a completed Narrative Disclosure. A "No" prompt at 31 then asks, "Send by modem?" at 33. At a "Yes" prompt, the modem autodials the lender and send the message at 34. A "No" prompt automatically causes the autodial of the facsimile machine at 35, and the material is sent by telecopy transmission. After the appropriate printout, the routine then returns to point identified as "Send Documents Mortgage." At the "Yes" prompt, the program advances through 29 again to point 30. At the decision prompt, "Is truth in lending sent" at 30, a "No" prompt then prepares and causes the "Truth in Lending Document" to be printed. The prompt then asks, "Do you want a hard copy?". If "Yes", a message is sent to the printer at 38. If a "No" prompt is shown, the question asks, "Do you want to send by modem?" at 39, and the system 10 activates the autodialer to the modem. If the prompt is "No", then the program automatically sends to the facsimile machine for auto transfer at 41. Whichever routine is selected, the question point "Send documents" is returned to at 28. When the prompt is "No", the routine advances to the point identified as "Send System documents." at 43. A "No" prompt terminates the program. A "Yes" prompt then causes the program to advance to the point, "Are assignments correct?" A "No" prompt then causes the new documentation be entered on the assignments. The subroutine is shown on "F"--Assignments. The first question the prompt asks, "Check borrower Mortgage Life Insurance" is shown at 46. At a "Yes" prompt, the amount of coverage is checked against the outstanding mortgage; the beneficiary is checked; the company is checked; and the premium is rechecked. The file also indicates the payor, and identifies the agent. The information is stored in the borrower's file at 13. A letter of confirmation to indicate that the policy is in force, is sent off-line. After completing the cycle, the prompt asks, "Has mortgage been sold." at 53. A "No" prompt causes a return to point 46, and a "No" prompt then causes the program to advance to "Check the Borrower Disability Insurance" at 48. A "Yes" prompt then causes the checking of the waiting period; the length of coverage; the insurer; the beneficiary; the premium required; the premium payor; the monthly benefit; and the agent. The program checks the essentials such as premium, benefit and length of coverage with the mortgage payment and length of the mortgage. As shown at 13, this information is stored in the borrower's file. After completing the cycle, the prompt then asks, "Has mortgage been sold" at 52. A "No" prompt causes the program to return to the point 46, and a "No" prompt at point 46 causes the program to return to point 48. A "No" prompt at point 48 causes the program to advance tot he point, "Check borrower's Mortgage Unemployment Insurance." A "Yes" prompt causes the amount of monthly payment; the named beneficiary; the premium amount; the payor; and the company, to be checked. There is no agent on the prompt at 51. The information is stored in the borrower's file at 13. The routine then advances to "Has the mortgage been sold." A "Yes" prompt then asks the operator to enter the new lender and the new lender's code number at 53. The program then records the system mortgage plan as a deletion from the original lender's file at 54 and adds the borrower to the new lender file at 55. After the mortgage change is completed, the program then prompts, "Do you want to review the benefits?" at 56. A "Yes" prompt enables changes to be made in the appropriate beneficiary; amount; and other detailed changes that are required. When the amount of the mortgage changes; the interest rates; or period of the mortgage is changed, then a change in the appropriate policies is often, but not always, required. When all changes have been made, a "Yes" prompt is effected at 56. A decision point, "Do you want to review benefits" causes the program to "Review benefits" at 57. A "No" prompt then causes the changes made to be listed, and asks the operator to prepare the letters to the agents, clients, lenders, and the like, and make the recommendations on required actions at 58. As these are not seen as repetitive because of a variety of recommendations, at 59 and 60, the material is subject to management decision, and the letters are stored off-line and are prepared manually. At the question, "Do you want to review benefits" at 56, a "No" prompt returns to "F" and back into the "Borrower's File" where the new information is changed on the Borrower's Data File at 13, and the Lender's File (the computer program sequences through points 314, 326, 327 and 315). When the system notes and the system documents are required, the Question at Gate at 42, "Send Mortgage Documents" is answered "Yes" Refer to E "Preparation of Documents". The prompt then asks "Is this a system" at 60. A "Yes" prompt asks "Is this A Fixed Interest Loan" at 61. A "Yes" prompt then finds and causes the retrieval of the appropriate information from the Borrower File and prepares in continuous order the documents at 62. The first information is a System Fixed Interest Loan document. This shows the borrower assigned number; the name of the mortgagor(s); the address of the property ; legal description; interest rate; term of mortgage; date of mortgage commencement; and the date of mortgage completion. This document is filled in on the System Document. The second document is the system mortgage plan note which: identifies the borrowers(s); interest rate; term of mortgage; beginning date of note; final date of note; property address; legal description; Cost Containment Option dates; and the Cost Containment Option amounts of each date. The program then causes the documents to be prepared, and the proper information is caused to be inserted in the appropriate spaces. At 63, the decision point causes the question to be asked, "Do you want a hard copy". At 64, if the prompt is "Yes", the printer prepares the documents on a continuous form. If the prompt is "No", the question is asked "Send by modem". At 66, if the prompt is "Yes", then the documents are sent by modem through an automatic dial. If the answer at (65) is "No", the material is transferred through the facsimile printer and auto-dial at 67. After the procedure is completed, at 68, the question is asked "Is document recorded on file". This is a check to make sure the borrower file and the lender file are correct. It will usually be redundant, and "Yes" terminates the program. "No" at this prompt takes all of the values through F to the Borrower's File at 13, and changes the values on file to the new values. After a "Yes" prompt at "Is this system mortgage plan" at 60, the next prompt asks, "Is this a fixed loan" at 61. A "No" prompt causes the preparing of a Flexible Interest System Note and System Mortgage. This then causes the retrieval of the appropriate information from the Borrower's File, and causes the preparation in continuous order two documents at 69. The first is a system flexible interest loan document. This document shows the assigned Borrower number; the name of the Mortgagor(s); original interest rate; term of interest rate; term of mortgage; maximum interest rate; date of mortgage commencement; and the date of mortgage completion. The second document is the mortgage note which identifies the borrower(s); the original interest rate; the term of the original interest rate; the maximum interest rate; the term of the mortgage; beginning date of the note; final date of the note; property address; legal description; cost-containment option dates; and the cost-containment option amounts at each date. The program then causes the preparation of the documents inserting the proper information in the appropriate space. It is then asked, "Do you want hard copy" at 71. A "Yes" prompt causes the printing of the documents in continuous form. A "No" prompt at 71 then asks "Send by Modem" at 72. A "Yes" prompt then causes the telephone number to be dialed and sends the information by auto dial. A "No" prompt at 72 then causes the sending of the information by facsimile to the lender through an auto dial system at 73. Regardless of the transmission, the next prompt asks, "Is document recorded on file" at 74. This is a check to make sure that the borrower file and the lender files are correct. It will usually be redundant, and "Yes" terminates the program. A "No" at this prompt takes all of the values through "F" to the Borrower's File at 13 and changes the values on file to the new values. A "No" at the point 60 "Is this Mortgage System" then asks, "Is this a Tuition Mortgage" at 76. Tuition Mortgage is an equity mortgage usually tied to an educational loan. A "Yes" prompt asks, "Is this a fixed interest loan" at 77. A "Yes" prompt then causes the retrieval of the appropriate information from the Borrower File, and prepares in continuous order two documents at 78. The first document is a System Fixed Interest Equity loan document. This document shows the Borrower's assigned Borrower number; the name of the mortgagor(s); the address of the property; the legal description; interest rate; term of mortgage; date of mortgage commencement; and the date of mortgage completion. This is filled in on the Tuition Mortgage document. The second document is the System Note which identifies the Borrower(s); interest rate; term of mortgage; beginning date of note; final date of note; property address; legal description; cost containment option dates; and the cost containment option amounts at each date. The program then causes the preparation of the documents, and inserts the correct information in the appropriate spaces. At 79, there is asked, "Do you want Hard Copy". At 80, if the prompt is "Yes", the printer causes the preparation of the documents on a continuous form. If the prompt at 79 is "No", the question is then asked, "Send by Modem" at 81 and the documents are caused to be sent to the lender's computer through automatic dial at 82. If the question at 81 is "No", then the documents are transferred through a facsimile transponder through automated dialing to the lender 83. Regardless of the transmission, the next prompt asks, "Is document recorded on file" at 84. This is a check to make sure that the Borrower and the lender files are correct. It will usually be redundant and "Yes" terminates the program. "No" at this prompt takes all of the values through "F" to the Borrower's file at 13, and causes changes in the values on the file to the new values. At 77, a "No" at prompt, "Is this a fixed interest," causes the preparation of the Tuition Mortgage equity loan documents. These include in a continuous program a System Mortgage note and a System Mortgage. This then causes the retrieval of the appropriate information from the Borrower's File, and causes the preparation in a continuous order two documents at 86. The first document is the Tuition Mortgage flexible interest loan document. This shows the assigned borrower number; the name of the Mortgagor(s); the address of the property; legal description; original interest rate; term of the interest rate; maximum interest rate; term of the mortgage; date of commencement of the mortgage; and the date of the mortgage completion. The second document is the mortgage note which identifies the borrower(s); the original interest rate; the maximum interest rate; the term of the mortgage; beginning date of the note; final date of the note; property address; legal description; Cost Containment Option dates; and the Cost Containment Option amounts at each date. The program then causes the preparation of the documents, and causes the insertion of the proper information in the appropriate space. Thereafter at 87, there is asked, "Do you want hard copy". A "Yes" prompt causes the printing of the document in continuous form. A "No" prompt at 87 then asks, "send by modem" at 88. A "Yes" prompt causes the lender's computer to be dialed for modem communication for transmission of the information at 89. A "No" prompt at 88 causes the information to be sent by facsimile to the lender through an auto-dial system at 90. Regardless of the transmission, the next prompt asks, "Is document recorded on file" at 74. This is a check to make sure that the borrower file and the lender file are correct. It will usually be redundant and "Yes" terminates the program. "No" at this prompt takes all of these values through "F" to the Borrower's file at 13, and changes the Values on the file to the new values. If at the prompt, "Is this Tuition Mortgage" at gate 76, the response is "No" the program then goes to Retirement Mortgage. Retirement Mortgage is a program that is used whenever an owner of a residential property desires to sell his or her property and hold the mortgage. Bridge financing is provided by a bank or other institution to a mortgage corporation, which finances the mortgage on the vendor's property through a system interest only plan. The funds thus generated are paid to the vendor. The vendor, then invests his or her funds in a bond issued by the lender. The lender uses these funds to repay the bridge financing to the bank. The bond issued pays equal monthly installments to the Bond Holder for a period certain. | ||||||