Abstract: The present invention discloses an engineering solution to the automation of funding assessing and managing collateral dependent loans and indexed linked products. Equity Finance Mortgages (EFM's) are issued by financial institutions and have a return, either profit or loss, which is determined by the way residential real estate market rise or fall respectively. Financial index products sold by some financial entities are akin to bonds or term deposits and pay a return to investors which is linked to the performance of a house or home price index. Consequently, an EFM issuing institution can hedge its exposures to the residential real estate market by selling such financial index products so that profits or losses on the EFM's are offset by the losses or profits respectively of the index products. Methods of calculating an appropriate matching of the dollar value of the EFM's and index products are disclosed.

Abstract: A data processing system and method are disclosed which finds particular application to equity finance mortgages. An Overall System 600 is formed from a Target Investment System 100, an Asset Origination System 200, an Asset Securitization System 400, an Asset Servicing System 300 and an Asset Management System 500. Financial feedback is applied to ensure targets are achieved. Mortgages are pooled and on-sold to investors and selected for acceptance on the basis of preferences expressed by the investors. Preferably the mortgage or like financial arrangement includes provisions relating to mitigating collateral valuation risk and consumer gaming.