Bank of America Corporation

Colin D McCormick

Lisa D Curry

Cherie A Arruda

David H Rupp

Michael Teichman

A predictive model for use in providing an equity release (reverse mortgage) financial product is disclosed. In at least some embodiments, a plurality of representative loans are created, wherein each loan can be characterized by a borrower type and a mortality table. A plurality of joint interest rate and house price scenarios are also created. Each of the representative loans can be run through each of the joint interest rate and house price scenarios to measure profitability metrics. The model can also be used to determine loan-to-value (LTV) ratios based on considerations including borrower age, loan volume sensitivity, a determined profit-maximizing LTV ratio, and geographic market considerations.

Predictive model for use in providing an equity release financial product

A convertible, home-equity based financial product is disclosed. Example embodiments of the invention provide a home loan that can be converted into a reverse mortgage, also known as an 'equity release' product. In example embodiments, the product can be set up so that there is a low or no-documentation requirement upon conversion. Conversion can be triggered upon a request from the borrower, or upon some other event. The proceeds from the conversion can be provided in many different ways, for example, as a lump sum, an investment, a line of credit, or a scheduled pay-out. The proceeds from the equity release can also be distributed so as to be used in purchasing a residence, for example, a second or vacation home.

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Charlotte, NC, United States of America

Colin D McCormick