Dozens of large corporations across the country have begun adding an important new real estate attraction to their list of standard employe benefits: help with mortgage money to finance or refinance primary and vacation homes.
Although the trend to home mortgage perquisites hasn't received much public attention, it is growing rapidly. One lending institution -- Norwest Mortgage Inc. of Minneapolis -- has provided more than $1 billion worth of home loans for employes of firms such as International Business Machines Corp., American Telephone & Telegraph and others during the past year.
Workers and retirees of more than 80 major companies can qualify for favorable financing by phoning Norwest's toll-free number, no matter where they are or where the property they're buying, refinancing or selling happens to be.
Most of the companies also offer cut-rate Norwest mortgage loans for employes moving from one part of the country to another.
Fixed interest charges are never higher than 12 percent for 30-year and 15-year loans. Some firms subsidize rates down to 10 or 11 percent. There are no upper limits on mortgage amounts, and the cut-rate financing usually is available not only to employes, but indirectly to nonemployes as well.
AT&T subsidiaries, for example, provide subsidized, cut-rate loans to purchasers of relocating employes' houses. AT&T and other firms even extend the mortgage benefit program to family members of employes such as brothers, sisters, parents and children who have no connection to the corporation and don't even live in the same community.
The trend among progressive firms is toward providing mortgage assistance across the board, not just for top-echelon executives, "because it makes tremendous sense for current and retiring workers and saves money" for everybody involved, according to Richard R. Solie, senior vice president of Norwest.
Pre-packaged plans such as Norwest's eliminate the need for employes to dicker with local banks or thrift institutions over the details of refinancing a current home or financing a new one. They simply call the number, provide the income, credit and property data required for the loan amount, and select the type of mortgage money they're after.
Besides fixed-rate loans, participants currently can order one-year, rate-capped adjustables at 11 percent, three-year adjustables at 12 3/8 percent and five-year adjustables at 12 3/4 percent.
Once the application is approved, the quoted rate is locked in for the employe, retiree or family member for 45 days. They also can be certain of paying competitive or cut-rate fees for such standard mortgage charges as property appraisals, credit checks and similar closing-related items.
Behind 1984's rapid rise in employer-assisted mortgage benefits has been a major change under way in the nation's capital markets. The mortgages originated through Norwest's pre-packaged plans are funded by Wall Street, not traditional home loan sources.
Norwest bundles the employe-benefit mortgages into saleable securities. Salomon Brothers Inc., a Wall Street investment banking firm, then sells the securities to pension funds and other deep-pocket investors, who become the ultimate recipients of the borrowers' monthly payments of principal and interest.
In the case of mortgage bundles that yield investors far below the going rate -- such as the 10 to 12 percent 30-year relocation loans -- Salomon sells the notes at discounted prices. Norwest then sends a bill to the parent company (such as AT&T) to make up the difference between the true market price and final discounted price.
The only possible impediment to a continuation of the booming growth of employer-assisted mortgages is Congress' uncertain tax policies, according to Norwest's Solie. If Congress doesn't clean up its current legislative mess over imputed-interest-rate taxation, "most companies will have to end or curtail" their programs aiding employes, Solie noted.