Abstract:
A method of appraising the value of a property based on obtaining a credit score of an owner of a property and assigning an ownership responsibility indicator to the property. The ownership responsibility indicator provides insight into the condition of the property without performing a complete inspection. A more accurate value of the property can then be determined.

Description:
BACKGROUND OF THE INVENTION 
       [0001]    The present invention relates generally to computer systems and more particularly a computer system for determining a value of a property. 
         [0002]    Valuation products such as automated valuation models (AVM), drive by appraisals, desk reviews, and others that do not include an inspection have a significant short fall. They have no way of determining a condition of the property. This is less of a problem with new structures, however, as a structure ages, its condition is often the most important factor when comparing it to other similar structures. Unless a complete inspection is performed, lenders, insurance companies, or others concerned with the value of the property are unable to determine its condition. 
       SUMMARY OF THE INVENTION 
       [0003]    The present invention provides a method and computer system for obtaining information regarding a condition of a property and assigning a value to the property without performing a complete inspection. 
         [0004]    Preferably, the computer system of the present invention includes a database for accessing information to determine a value range or a specific value within a range for the property and to obtain a credit score for an owner of the property. From the owner&#39;s credit score, an ownership responsibility indicator is determined for the property. The ownership responsibility indicator provides insight into the condition of the property. The condition determined by the ownership responsibility indicator generates a more accurate value or range of values to be assigned to the property. 
         [0005]    Another example method includes a computer system obtaining a credit score for an owner of a property and at least one previous owner of the property from a database. From the credit scores of the current owner and the at least one previous owner, an ownership responsibility indicator is determined for the property. The condition determined by the ownership responsibility indicator based on the credit scores of the current owner and previous owner generates a more accurate value or range of values to be assigned to the property by the computer. 
         [0006]    Another example method includes a computer system obtaining a credit score of an owner of a property from a database and defining an ownership responsibility indicator for the property. The computer system also obtains a credit score for each owner of a plurality of comparable property sold and defines an ownership responsibility indicator for the comparable property based on the credit score of its owner. A value is assigned to the property based on matching the ownership responsibility indicator of the plurality of comparable properties sold with the ownership responsibility indicator of the property and assigning the value of the comparable property sold to the property whose value is being determined. 
     
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
         [0007]    The above, as well as other advantages of the present invention, will become readily apparent to those skilled in the art from the following detailed description of a preferred embodiment when considered in light of the accompanying drawings in which: 
           [0008]      FIG. 1  is a schematic of a computer system of the present invention; 
           [0009]      FIG. 2  shows the flow of an example method for appraising a value of a property; 
           [0010]      FIG. 3  shows the flow of another example method for appraising a value of a property; 
           [0011]      FIG. 4  shows the flow of another example method for appraising a value of a property; 
           [0012]      FIG. 5  shows an example of the method of  FIG. 4 . 
       
    
    
     DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT 
       [0013]    The present invention provides a computer system  20 , as shown in  FIG. 1 , for determining a value of a property according to a method of the present invention. The computer system  20  includes a CPU  22  for creating an ownership responsibility indicator for the property and assigning a condition and/or value to the property in a manner which will be discussed below. The CPU  22  includes a display  24  and input devices, such as a mouse  26  and/or a keyboard  28 . The CPU  22  is also connected to a printer  30 . 
         [0014]    The CPU  22  includes a microprocessor  50  accessing computer memory  52 , such as a hard drive, RAM, CD ROM, ROM, etc. The computer memory  52  stores a database  54 . The database  54  may include the following information: current and previous property owners&#39; credit score, a valuation method, and property data, such as geographic region, lot size, style of structure, age of structure, date of sale, and living space. If the information is not stored on the database  54 , it may be manually entered by a user. 
         [0015]    The microprocessor  50  of the CPU  22  is preprogrammed with suitable software to perform the functions described herein. 
         [0016]    An example method  100  for determining a value of a property is shown in  FIG. 2 . The method  100  includes requesting an appraisal for the property (step  102 ). The request may originate from a mortgage lender, an insurance company, a borrower, or another concerned with the value and or condition of the property. 
         [0017]    An initial value for the property is determined (step  104 ) by the CPU  22  accessing the valuation method from the database  54 . The valuation method may include an automated valuation model (AVM), a drive by appraisal, a desk review, or another similar method that does not include a complete inspection to determine the initial value of the property. The initial value may include a range of values, a single value, or a single value within a range of values. 
         [0018]    The CPU  22  accesses the database  54  to determine a credit score of the owner of the property (step  106 ). The credit score is preferably a FICO score, a Vantage score,or another score commonly known in the industry. 
         [0019]    An ownership responsibility indicator (ORI) for the property is created by the CPU  22  based on the credit score of the owner of the property (step  108 ). The ORI is divided into at least two ranges based on the credit score of the owner of the property. For example, when using a FICO credit score, a score of 600-850 corresponds to a high ORI, and a score of 300-599 corresponds to a low ORI. Although a preferred range is given, one of ordinary skill in the art would recognize that further divisions in the scale could be made to increase its accuracy. Also, adjustments to the score ranges may be necessary to account for varying geographic regions. 
         [0020]    Furthermore, a significant drop in the owner&#39;s credit score will signify a low ORI for the property. Similarly, a consistently high credit score will signify a high ORI for the property. 
         [0021]    The CPU  22  correlates the ORI for the property as described above with a condition of the property (step  110 ). A high ORI for the property indicates the property is being maintained an average to a good condition. A low ORI for the property indicates the property is being maintained at an average to a poor condition. 
         [0022]    An appraisal value is assigned to the property by the CPU  22  based on the ORI (step  112 ) and/or the condition determined by the ORI. The appraisal value is presented on the display  24  or printed on paper by the printer  30 . The high ORI corresponds to the appraisal value being at a high end of the initial value range or being at a narrower range of values at the high end of the initial value range. The low ORI corresponds to the appraisal value being at the low end of the initial value range or being at a narrower range of values at the low end of the initial value range. 
         [0023]    As shown in  FIG. 3 , an example method  200  for determining a value of a property is generally the same as the method  100  described above except as otherwise described below or shown in  FIGS. 2 . The CPU  22  obtains a credit score of at least one previous owner of the property (step  207 ) from the database  54 . The CPU  22  determines an ownership responsibility indicator for the property based on the credit score of the owner of the property and the credit score of the at least one previous owner of the property (step  208 ). 
         [0024]    As shown in  FIG. 4 , an example method  300  for determining a value of a property is generally the same as the method  100  described above except as otherwise described below or shown in  FIGS. 5 . The CPU  22  obtains property data for a plurality of comparable properties sold (step  314 ) from the database  54 . The property data includes at least two of the following: geographic region, lot size, style of structure, age of structure, date of sale, and living space. The CPU  22  obtains a credit score for each owner of the plurality of comparable properties sold (step  316 ) from the database  54 . 
         [0025]    The CPU  22  assigns an ORI to the plurality of comparable properties sold based on the credit score of each owner of the comparable property (step  318 ). The CPU  22  then assigns an appraisal value to the property based on matching the ORI of the property with the ORI of the comparable property sold and assigning the value of the comparable property sold with a matching ORI as the appraisal value of the property. 
         [0026]      FIG. 5  is an example of the method  300  described above. The CPU  22  creates a chart  330 . A plurality of property data categories  332  are displayed on the chart  330  on a vertical axis  334 . A subject appraisal property  338  and a plurality of comparable properties sold  340  are shown on a horizontal axis  336  of the chart  330 . By matching an ORI of the subject property with an ORI of the comparable properties sold  340  from the chart  330 , the CPU  22  determines the value of the subject property  338 . As shown on the chart  330 , the subject property value  342  would be $110,000 for this example. 
         [0027]    Investment banks package a mortgage backed security (MBS) to sell to investors. A rating is assigned to the MBS by agencies such as the Standard and Poors or Fitch. One of the most important factors in assigning the rating to the MBS is an analysis of the collateral. Currently, the analysis is performed with an AVM. Current AVMs consider a plurality of comparable properties sold and discard comparable properties sold with values substantially higher or lower than a median or mode value of the plurality of comparable properties sold. However, by considering the ORI of the plurality of comparable properties sold in connection with the AVM, the determined value of the property will be more indicative of the value of the property, even though the determined value may be substantially higher or lower than the median or mode value of the plurality of comparable properties sold. 
         [0028]    Considering the ORI of the property owner is helpful in analyzing collateral in a transitional neighborhood where the property is being renovated or updated. With many properties foreclosed, abandoned, or dilapidated, the median or mode value of the plurality of comparable properties sold may be low. However, current AVMs may consider the plurality of comparable properties sold that were either renovated or updated as an anomaly and an irrelevant comparable property. By comparing the ORI of the plurality of comparable properties sold with the ORI of the subject property, a more accurate value may be assigned to the subject property that may be either substantially higher or lower than the median or mode of the plurality of comparable properties sold. 
         [0029]    Considering the ORI of the property owner is also useful in analyzing collateral in previously stable urban areas with historically few foreclosures. For example, a loan on a property where the ORI indicates likely foreclosure will not be assigned a value similar to a typical arms length transaction with standard marketing times and conditions. In this case, the property will be assigned a value closer to other foreclosed properties in the area. 
         [0030]    As the property used for collateral for the MBS changes ownership, the ORI of the new owner may be used to determine the value of the property as well as determine any change in the value of the collateral. Moreover, this could reduce the effect of redlining because the appraisal of the home will be compared to homes with owners with similar credit scores, which might mean a comparison with homes that are farther away, and less comparison with some nearby homes with different credit scores. 
         [0031]    Although a preferred embodiment has been disclosed, a worker of ordinary skill in this art would recognize that certain modifications would come within the scope of this invention. For that reason, the following claims should be studied to determine the true scope and content of this invention.