Christian J Wypasek from West Orange, NJ, age 56

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Methods And Apparatus For Utilizing A Proportional Hazards Model To Evaluate Loan Risk
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US Patent:

7392216, Jun 24, 2008
Filed:

Sep 27, 2000
Appl. No.:

09/671005
Inventors:

Matt Andrew Palmgren - Raleigh NC, US
Christian John Wypasek - Mint Hill NC, US
Assignee:

GE Capital Mortgage Corporation - Raleigh NC
International Classification:

G06Q 40/00
US Classification:

705 37
Abstract:

Systems and processes for more accurate mortgage scoring are described. A proportional hazards model is employed in which not only the occurrence of an event, but also the time to an event such as default of a loan, is considered. In this approach, a hazard rate can be viewed as the chance that an observation will experience an event in the next instant. There are two components to the response, and a binary variable is utilized to indicate whether the event was observed or not, and a time variable. As a result, the number of loans used for modeling is greatly increased, and the time it takes to observe the event, a valuable piece of information in itself, is included in the process. In addition, nonlinear effects are advantageously modeled in a continuous fashion using hat functions to map a series of independent variables. This approach typically yields smaller prediction errors near boundary points.