Patent ID: 8380620

Claim:
A method for income curtailment protection, the method comprising: determining if a borrower qualifies for the income curtailment protection, wherein qualification for the income curtailment protection is based at least in part on loan procurement of the borrower, wherein the loan requires periodic payments; offering income curtailment protection to the borrower upon the determination of borrower qualification; determining, after the borrower has enrolled in income curtailment protection, if income curtailment has occurred for the borrower, wherein income curtailment is a reduction in income such that the borrower is in jeopardy of not paying the periodic payments of the loan; determining, performed by a computer, at least a portion of the periodic payments of the loan to cover on behalf of the borrower in response to income curtailment being determined to have occurred, comprising: identifying a reduced income of the borrower resulting in income curtailment; calculating a front-end ratio (FER) by dividing a periodic payment amount by the reduced income; determining if the FER is less than a predetermined threshold; and in response to the FER being less than a predetermined threshold: determining a new front-end ratio (FER2) covered under income curtailment; and calculating the portion of each periodic payment that are to be covered on behalf of the borrower by multiplying the FER2 by the reduced income; and covering the at least a portion of the periodic payments on behalf of the borrower, wherein the covering the at least a portion of the periodic payments on behalf of the borrower occurs by an entity other than the borrower and the borrower is not obligated to repay any portion of the amount covered on behalf of the borrower.