Online mortgage lender Better.com has reportedly joined forces with Amazon to launch a groundbreaking initiative called Equity Unlocker, according to TechCrunch. This program aims to help employees purchase homes without having to sell their shares by utilizing their vested equity as collateral.
Better.com claims that this program is distinct from others since employees can pledge their vested equity without having to sell their shares. Amazon workers located in Florida, New York, and Washington State are the first to try out this new program. The announcement of Better.com's partnership with Amazon has caught many off guard, particularly those monitoring the struggles the former has endured. Better.com has encountered several obstacles in recent times, such as a decline in business due to a slowdown in the housing market and an increase in mortgage interest rates.
In 2021, Better.com suffered a loss of over $300 million, and its financial situation did not improve in 2022. SEC filings showed that the firm experienced a net loss of $327.7 million in the first quarter of that year.
Better.com has faced further challenges in recent times due to its mishandling of multiple rounds of mass layoffs, which led to the departure of several executives. Furthermore, the firm moved forward with its SPAC filing in July 2021, despite the lack of success for blank-check combination debuts.
Given Better.com's struggles and reputation, it remains unclear why Amazon has chosen to partner with the firm. When questioned about the partnership, an Amazon representative stated generally that the company is committed to providing wellness benefits to its employees but did not provide specific reasons for choosing Better.com.
However, Better.com did mention that it has been an Amazon Web Services customer since 2015, utilizing the tech giant's services to power its loan-origination system. Yet, at least two other online mortgage lenders also use AWS, so the reason for Amazon's selection of Better.com remains unclear.
Amazon and Better.com joined forces over Equity Unlocker program
Despite the potential risks associated with using vested equity as collateral, Amazon has decided to partner with Better.com to launch Equity Unlocker, a program that enables employees to finance their homes without selling their shares. This collaboration has raised concerns since Better.com has been struggling financially and has experienced negative publicity due to mass layoffs and an executive exodus.
The program charges higher interest rates that range from 0.25% to 2.5%, which could result in an interest rate of up to 8% for some employees. Therefore, the appeal and practicality of this option have been questioned. While Amazon and Better.com view this program as a wellness benefit for employees, critics are interested in observing its execution and potential impact.
According to a HousingWire report last week, the deadline for the Aurora Acquisition Corp. to complete its merger with Better.com has been extended for the third time. The new deadline for the merger is September, as disclosed in filings with the U.S. Securities and Exchange Commission (SEC) following Aurora's shareholder meeting on February 24.
Given Better.com's numerous setbacks and negative publicity, it appears highly improbable that the firm could successfully launch an initial public offering (IPO) in the present business environment. Even businesses that are growing and reporting favorable financial metrics are showing reluctance towards going public.
2023/03/BetterThank you for being a Ghacks reader. The post Amazon is in "better" stock options now appeared first on gHacks Technology News.
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