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Amazon Employees Use Stock to Buy Homes

A mortgage lender program, “Equity Unlocker,” allows Amazon workers to pledge stock as collateral for their down payment rather than selling it to raise cash.

NEW YORK – Amazon employees can use their company shares as collateral when buying homes under an arrangement with online mortgage lender Using the lender’s new product, Equity Unlocker, Amazon workers can pledge stock rather than having to sell it to raise cash.

The Amazon and partnership allows Amazon employees to hold stock longer if they want to wait for the price to recover, while still being able to buy a home. charges employees who use the down payment pledge option a higher interest rate than those who use cash – between 0.25 and 2.5 percentage points above the market rate, depending on how the down payment is structured – in order to protect itself from a slide in Amazon’s stock price.

Unlike stock-based loans that carry the risk of margin calls that require borrowers to put up more collateral or sell assets to reduce debts, however, Amazon employees’ loan arrangements would be protected if Amazon’s stock price slides.

The plan was designed to give flexibility to a workforce paid largely in company stock. It’s similar to a service that banks offer high-net-worth clients, issuing loans backed by their portfolios of stocks and bonds.

The program launched on Feb. 28 in states including Florida, Washington, and New York.

Source: Wall Street Journal (02/28/23) Mattioli, Dana

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