Amazon has signed a deal with embattled online mortgage lender Better.com run by controversial Indian-origin CEO Vishal Garg to allow employees to use their shares in the company toward a mortgage down payment.
Better.com launched ‘Equity Unlocker’ which allows Amazon employees to use their vested equity as collateral for a down payment for buying homes.
According to Garg’s company, Amazon employees can finance their homes without actually selling their shares.
Amazon workers in Florida, New York, and Washington can currently use Equity Unlocker’ to secure a home loan without selling their Amazon stock.
“Even though equity is a valuable asset, it is considered ineligible by most banks and financial institutions when calculating the necessary down payment on a home,” said Garg.
To protect itself from a continued slide in Amazon’s stock price, Better.com will charge a higher rate on the mortgages of employees pledging stock “between 0.25 and 2.5 percentage points above the market rate, depending on how the down payment is structured,” according to reports.
An Amazon spokesperson told TechCrunch that the company is “always looking for opportunities” to enhance its benefits offerings “and better support employees’ mental, physical, and financial wellness.”
In December 2021, Garg laid off nearly 900 employees over a Zoom call that created a furor.
In total, he laid off more than 4,000 employees in the US and India.
According to the company, the uncertain mortgage market conditions created an exceedingly challenging operating environment for many companies in the industry.