Thought you might find this of interest - this guy asked me some
questions about using a margin account (he saw that I wrote the
Investment FAQ entry on it), and here was his final reply:
Mr. Aiken,
Thank you very much... I'm sure I'll be able to piece together some historical data and put it into chart form. The reason I'm looking for this, if you are interested, is to produce a comparative graph (for a brochure and website) of rate fluctuations on interest only mortgage loans, i.e., one year T-Bill, COFI, COSI, LIBOR, etc. and show that the broker call rate is a stable "safe" index for an interest only adjustable mortgage loan.
You see, I am the Vice President of a rather innovative mortgage bank with a large presence here in the Silicon Forest, and we have developed an interesting loan product that utilizes securities portfolios as collateral for a mortgage loan. Simply, our investors for our clients' home and commercial property mortgage loans are securities firms' margin desks... They provide funds on margin for our clients (Obviously only our clients that have sizable securities positions) and file a trust deed on the real estate for which the loan proceeds are being borrowed (To purchase or to refinance)... Hence, technically it becomes a tax deductible mortgage loan... at a better rate than standard Fannie Mae loans and with much easier qualifying terms and underwriting procedures.
It's quite an innovative product, and we are having real success here with all the Microsoft and Intel young millionaires... These borrowers are much better off with this product than they would be were they to liquidate a securities position for a real purchase... Avoid capital gains taxes, continue to participate in their stock(s)' upside, etc. etc.
Again, thank you for your help. Feel free to keep in touch.
Paul R. Peterson
ho ho ho... We'll see about the stability of the broker call rate... |
