Patent ID: 8489485

Claim:
A method for equalizing debt balance to value in a reverse mortgage security instrument on a computer comprising the steps of: appraising of a reverse mortgage asset resulting in a reverse mortgage asset value, wherein the reverse mortgage asset is owned by a borrower; electronically using an electronic principal limit factor module on the computer for determining the principal limit factor of the reverse mortgage security instrument, the principal limit factor based on at least one principal limit factor criterion including: a borrower's age; the borrower's health status; the reverse mortgage asset value; and the borrower's probability of moving; creating the reverse mortgage security instrument between the borrower and a lender with an associated interest rate, the reverse mortgage security instrument having a debt component and an equity component in which title transfers from the borrower to the lender; creating one or more debt-to-asset-value equalization provisions in the reverse mortgage security instrument comprising: language granting the borrower the right to request one or more borrower-initiated appraisals during the reverse mortgage security instrument; and language granting the lender the right to request one or more lender-initiated appraisals during the reverse mortgage security instrument, the one or more borrower-initiated appraisals and the one or more lender-initiated appraisals resulting in one or more reappraised reverse mortgage asset values, and the one or more debt-to-asset-value equalization provisions defining a debt-to-asset-value reduction value and a debt-to-asset-value increase value; creating a credit line, a lump sum, or a plurality of tenure payments to the borrower at the associated interest rate; creating an electronic accrual module for accruing a total reverse mortgage debt which is the total debt advanced to the borrower at the associated interest rate; electronically creating an electronic debt-to-asset-value equalization module on the computer to determine a ratio equal to the one or more reappraised reverse mortgage asset values over the total reverse mortgage debt based upon the reappraised reverse mortgage asset values; reducing the associated interest rate in the debt component of the reverse mortgage security instrument if the ratio is less than or equal to the debt-to-asset-value reduction value; and increasing the associated interest rate in the debt component of the reverse mortgage security instrument if the ratio is equal to or greater than the debt-to-asset-value increase value.