Amazon has reached an agreement with online mortgage lender Better.com to offer a new benefit to employees.
Better.com Launches equity unlocker, a program that allows employees to use their earned equity as collateral for a down payment when they attempt to purchase homes. Amazon employees in Florida, New York and Washington state will be the first to test the tool. Unique to the program, according to Better.com, is that employees will have the ability to finance their homes without selling their shares, just needing to commit the purchased equity.
Even former Amazon employees with vested equity can use the service, according to Better.com, and there are many, following Amazon’s company-wide layoffs. Current and former workers can also use the mortgage tool for secondary vacation homes or investment properties. The closing cost, when the loan is secured, ranges from 2% to 5% of the loan, Better says on its website. However, there is a condition. As previously reported today by the WSJ: “To protect itself from a continued decline in Amazon’s stock price, Better.com will charge a higher rate on mortgages for employees who pledge shares, between 0.25 and 2.5 percentage points per above the market rate, depending on how the down payment is structured.”
Brad Glasser, an Amazon spokesperson, told TechCrunch via email that the company is “always looking for opportunities” to improve its benefit offerings “and better support the mental, physical and financial well-being of employees.”
He added: “As part of that, we offer a wide range of financial benefits, including resource savings, tools to increase financial literacy, and programs that help employees feel financially strong. Eligible employees can access these benefits beginning on the first day of their employment with us, regardless of their role or location.”
While this new service from Better focuses specifically on the homebuying process, the philosophy behind the program, the company says, is to support the “whole employee.”
“Financial well-being, mental well-being and physical well-being are essential aspects of employee health, and they all affect each other,” Glasser said. “For financial wellness, that means providing benefits that help with short-term and long-term financial success, for employee time at Amazon and beyond.”
It’s a creative partnership, but also an amazing one. Better has been an Amazon Web Services customer since 2015 and its loan origination system is fully powered by the software, according to a statement. Still, Better has been through his fair share of struggles that have put his future in doubt. Last May, TechCrunch reported on a filing that revealed that Better.com had made a loss of more than $300 million in 2021 after a rapid decline in business caused largely by a slowdown in the real estate market and an increase in the mortgage interest. rates
The company’s reputation was also hit hard by the way it carried out numerous rounds of mass layoffs, which also resulted in an exodus of executives. Better.com also made headlines last July, when it seemed like it was still moving forward with its SPAC filing despite the lackluster performance of the blank check combination debuts. (On the same day as the updated SPAC filing, the WSJ reported that the SEC is examining whether Better.com violated federal securities laws, according to a company disclosure.)
While Amazon may be your testing guinea pig, Better aims to make Equity Unlocker available nationwide to employees of public and private companies.
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