Patent ID: 7707102

Claim:
A method of determining a collateral risk index for a collateral loan made on a commodity, executed on a computing means having a central processing unit, the method comprising the steps of: (a) using said computing means to gather from one or more data sources a total number of closed sales, S c , in a particular commodity market in a predetermined period of time; (b) using said computing means to gather from one or more data sources a total number of sales which are pending, S p , in said particular commodity market in said predetermined period of time; (c) using said computing means to gather from one or more data sources a total number of expired listings, L e , in said particular commodity market in said predetermined period of time; (d) using said computing means to gather from one or more data sources a total number of active listings L a , in said particular commodity market in said predetermined period of time; (e) determining, by said computing means, a market index, M i , indicative of the strength of said particular commodity market over a period consisting of a length of days, P d , in accordance with (f) determining a ratio P of a loan balance, B, to a value of the commodity, V, wherein the loan balance, B and the value of the commodity, V are identified from the collateral loan; (g) determining a collateral risk index, CR i by dividing the market index, M i , by the loan balance ratio, P; and (h) determining if action is required on the collateral loan based on the Collateral Risk Index to reduce a risk of loss, and if it is determined that action is required, determining a specific action for the collateral loan wherein a specific action is at least one action in a group of actions comprising monitoring the loan for signs of a default or selling the loan to a third party.