The Federal Home Loan Mortgage has been granted a patent for a system that automates income validation using electronic transaction data. The system employs machine learning and rule-based analysis to classify income transactions, verify data clusters, and calculate net and gross income distributions for borrowers. GlobalData’s report on Federal Home Loan Mortgage gives a 360-degree view of the company including its patenting strategy. Buy the report here.
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According to GlobalData’s company profile on Federal Home Loan Mortgage, Virtual banking assistant was a key innovation area identified from patents. Federal Home Loan Mortgage's grant share as of July 2024 was 89%. Grant share is based on the ratio of number of grants to total number of patents.
Automated income validation using electronic transaction data
The patent US12039596B1 outlines a sophisticated system and method for automated income validation utilizing electronic transaction data. Central to this innovation is a machine learning model that classifies transaction data linked to a borrower's financial account, identifying income transactions through a continuous or periodic update of classifying rules. The system employs text mining techniques to analyze transaction descriptions, associating income type and source labels with data elements. It further identifies clusters of data elements related to specific income sources, verifies these clusters using pattern matching algorithms, and analyzes their characteristics, including cadence and dollar steadiness. This analysis allows the system to detect gaps in income transactions and calculate various metrics, ultimately leading to the determination of net income and the generation of a gross income distribution tailored to the borrower.
Additionally, the patent details operations for detecting outlier data elements and calculating composite income based on steady income streams. It emphasizes the importance of verifying data elements against borrower-provided information, such as recipient names and employer details. The system also includes provisions for generating profile reports that indicate a borrower's repayment capacity, based on the calculated net income and associated loan terms. By leveraging advanced machine learning and text mining techniques, this patent presents a comprehensive approach to income validation, enhancing the accuracy and efficiency of financial assessments for borrowers.
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