Better.com allows Amazon employees to use vested equity to mortgages
Better.com will allow Amazon employees who work in Florida, New York, and Washington to use their Amazon shares to pay down a mortgage. The company also announced that Equity Unlocker will be available to them to help secure a home loan without having to sell their Amazon stock. The product is neither mark-to-market or non-recourse. Mortgages are locked with the share’s value at the time of the home appraisal. “Equity is a valuable asset but it is not considered eligible by most banks and financial institution when calculating the down payment on a house,” Vishal Garg, founder, CEO, said in a Tuesday press release. However, Better has funded more than $1 billion in mortgage volume with Amazon workers, and it expressed concern about equity compensation. Better is also an Amazon Web Services customer since its inception in 2015. The software powers Tinman’s loan origination system, Tinman. Better stated that pledged equity will be valued 50% and can be combined cash to make a 20% downpayment. Amazon closed Monday at $93.76 per share. This is a drop from its peak of $168 in March. Amazon is also in the process of laying off approximately 18,000 employees to rightsize its workforce of 1.5 million people. This is after a hiring boom that occurred during the pandemic. Equity Unlocker can be used to obtain a mortgage for up to $3,000,000 for a first or secondary home or up to $2,000,000 for an investment property. The product doesn’t allow borrowers to sell their Amazon shares until they have paid the entire principal or refinanced. According to terms and conditions, employees with pledged equity may also sell their Amazon proceeds if it would reduce a portion of the principal. “Better is able innovate continuously, improve the user experience, and continue to provide best-in-class service to their customers by providing best-in class service to them,” Chandan Sharma, managing Director of worldwide business development at AWS, stated in a press release. Equity Unlocker will be available to employees in both public and private companies. After announcing a One Day mortgage last month, the lender is now launching a loan product. It claims it delivered a commitment letter to potential borrowers in 12 hours. These moves come as Better is still waiting for a merger with a special-purpose acquisition company to go public. This proposal has been almost two years in making. According to Securities and Exchange Commission disclosures, Aurora Acquisition Corp., the SPAC that will merge with Better, has a March 8, 2008 deadline to complete its merger. Last week, shareholders voted to extend the deadline to September. A spokesperson for Aurora Monday stated that the company would post an update next week.