The GREEN ACCOUNT—complete flexibility to manage your wealth with instant liquidity. It’s all about the green!


(Frequently Asked Questions)

What is a Green Account?
The Green Account Is a first mortgage line of credit with a linked associated Clearing Account to make it America’s first fully-transactional mortgage. The Green Account combines the advantages of a mortgage, line of credit, savings account and checking account into a single relationship. Simply put, I tie Green Account is a Line or credit secured by your real estate that is combined with all the functionality of a standard checking account. The Green Account has a I5 year term, during which time you can make deposits (loan principal payments) and withdrawals (loan advances) up to your credit limit as frequently as desired, and as conveniently as using your personal checking account.

Why hasn’t this loan been available in America before now?
Unlike England and Australia, where similar products have been available for years, America has passed numerous laws to protect consumers and regulate in detail virtually all banking services.

The Green Account (which merges mortgage, line of credit, savings and checking account services into one relationship), has required significant effort to develop the account terms, operating procedure, and documents to be in full compliance with all associated laws and regulations.

And, most financial institutions have separate management and staff for lending, savings or checking products, and for wealth management (investment) services, and often have different data processing systems for loan, savings and transaction account management. Coordinating the effort to develop and administer a product. Like the Green Account, that crosses so many departmental lines is a difficult task.

The bank has a simple business strategy that’s focused on real estate lending and personal savings & checking accounts, and an integrated cohesive management team that strives to serve both the banking and lending needs of its customers.

The bank is proud to be the first bank in America to offer such a product to its customers. Development of the Green Account has taken several years, and involved every department in the flank with the support of the Bank’s regulators, lawyers, data processing system providers and other entities that help provide all of the associated banking services that come with the product.

3. Who is the Ideal Green Account borrower?
While almost anyone could benefit from the Green Account’s many advantages, it is ideally suited to close who are financially sophisticated, or who have uneven income or cash flows (such as investors, business owners, and those on commission), and for cash management purposes by investment property owners.

4. How does the Bank make money on this loan?
Traditionally, banks make money accepting deposits and making loans by paying depositors a lower rate of interest than they charge their borrowers.

With the Green Account, for the funds a customer would otherwise put into their savings or checking account, they effectively cam the same rate of Interest as they are charged on their mortgage balance. but, from the bank’s perspective, the Green Account is simply a loan with a balance that fluctuates every day, and earns the Bank a specified rate of interest. The Bank has other customers making deposits into traditional savings and checking accounts as well as other sources of funding.

5. Will my loan be sold? Who will service it?
The bank is a “portfolio lender”. We fund and service all Green Accounts ourselves. While it is the Bank’s intention to hold Green Accounts in its portfolio indefinitely, it is possible that the loan may be sold to an investor. But, in that event, the bank intends to continue servicing your loan.

6. What is my “credit limit”?
Your credit limit is the maximum amount you can borrow under the terms of the Green Account. Your credit limit will be based on the value of your home and your requested amount. It can be higher than your first draw amount, which may be used to pay off an old mortgage (in a refinance) or complete a purchase transaction.

Your credit line will remain the same throughout your Green Accounts 15 year draw period, unless it is modified by our mutual consent. For example, if your home value increases, you may request that your credit limit be increased. Or, if desired, you could request us to lower your credit limit.

You’ll need to keep your Green Account principal balance below this credit limit throughout the term of the loan, On the loan’s maturity date, a balloon payment will be due for the amount of outstanding loan balance plus accrued finance charges.

7. How do I make payments?
Every time you make a deposit to your Green Account, whether by direct deposit of your payroll or funds from other sources or another account, in effect you are making a payment that reduces your outstanding loan balance by that amount.

At the end of each monthly statement period, your finance charge (based on your daily outstanding principal balance and the current applicable interest rate) is reported to you as your minimum monthly payment. On the due date, this charge is simply added to your Clearing Account and is effectively added to your loan’s principal balance.

No separate or additional loan payments need to be made, unless you have reached your credit limit.

8. Can I make extra lump-sum payments In addition to my payroll and other deposits?
Like any checking or savings account, you can make deposits to your Green Account for any amount, as often and anytime you like. This can be very beneficial in paying down your loan balance and building equity in your home faster, as you earn a greater effective rate of return.

Moving funds from lower-interest rate deposit accounts or poorly-performing assets into your Green Account will reduce your principal instantly, and save you more interest, allowing you to pay off even sooner. It’s like earning your mortgage rate on your savings. And, unlike Certificates of Deposit or other term savings 2nd investment accounts, you can access the additional equity this creates, any time it’s needed.

9. Should 1 put all of my savings and other available funds Into the Green Account?
Your home’s value will likely go up over time, but it could go down. If the value of your home increases significantly, you may request an increase to your credit limit.

With any mortgage, regardless of what happens to the value of your home, you still owe the amount that you’ve borrowed. If your home’s value declines substantially, it is possible that your credit limit may be temporarily reduced until your home’s value increases again

17. Do I have to pay oft my loan early?
No. You can pay down your Green Account Ivan balance, and borrow again cup to your credit limit), as often as you wish and as it best meets your financial circumstances over the full 16 years

18. What happens if I miss a payment?
During the entire 16 years term of your Green Account, your minimum monthly payment is interest-only, which is automatically posted to your Clearing Account on the due date and added to your loan’s principal balance monthly. As long as your loan’s principal balance stays below your credit limit, there’s really no “payment” to miss. The minimum interest-only monthly payment will be increased by any loan balance in excess of your credit limit.

The Green Account is ideal for people whose income might vary from time to time.

19. Is there potential for “negative amortization”?
Negative amortization occurs when a borrower’s loan payments are insufficient to pay the accrued interest on the loan.

If the amount of deposits you make into the Green Account for any monthly billing period is less than the amount of withdrawals plus your monthly finance charge, then your Green Account loan balance will increase. Your Green Account monthly finance charge will he added to the account balance effectively resulting in negative amortization (to the extent of your remaining available credit limit). However, this effect is offset by your Green Account deposits accounted for as loan principal payments.

20. How do I access my Green Account for my expenses?
You can access funds from your Green Account, just as you would for any checking account. You can use a check, debit card, ATM. EFT, ACH and hill-pay to access your funds, and you have the bank’s online banking service to view your account balances and transactions.

21. Do I need to change my money spending habits?
No. There should be no need to change anything you do. Your income and other funds are simply deposited into your Green Account is instead of your checking account. Since the deposits will be going towards principal, and reduce your finance charges, you’ll likely come out way ahead and be able to payoff your loan faster. Also, since your minimum monthly payment is interest only, compared with making traditional mortgage payments you’ll have more funds available if needed for other purposes.

22. Is there a maximum amount I can draw from the account?
You carl draw up to your credit limit. At any point in time during your 15-year Draw Period, the amount you have available is the difference between your Green Account loan principal balance and the credit limit.

For security purposes, there are some daily transaction limitations for ATM withdrawals and when using the MasterMoney debit card.

23. What risks do I have with this account?
With the full credit limit of the Green Account at your disposal, you should be prudent on how you decide to use your funds.

As with any of your finances) you need to be disciplined. You probably get several credit card offers each week, and can easily open a home equity line of credit to access your home’s available equity. Any of which offer you the same ability to get into financial trouble.

24. Can I use the Green Account available credit to make investments or for other purposes?
Absolutely. There are no restrictions on the use of your Green Account funds (except as required by law that funds cannot be used for gambling or for use in any illegal activities). Your Green Account provides an opportunity to “borrow” money at attractive rates from your available equity, and put it to productive use or “reinvest” it at a higher rate of return.

25. Is the interest I pay on the Green Account tax deductible?
Since this is a mortgage, the interest you pay may be tax deductible. Please consult your tax advisor for more guidance.

26. Won’t paying less mortgage Interest reduce my tax deduction?
Yes, but you win this tax game! A dollar of additional interest results in only about a thirty-cent tax deduction - that’s a no-win game. So the less you spend In Interest, the better off you will be.

27. Why is the margin on this loan higher than on other adjustable rate loans?
The margin on your Green Account may be higher than that of other adjustable rate mortgages (ARMs) to help pay for the additional costs of all of the added transactional features of the Green Account. However, most borrowers will find that the slightly higher margin will have a minimal effect on the overall payoff timing, particularly when compared to the costs and lengthy payoff times for traditional loans.

28. Is there an annual fee?
ANNUAL FEES Each year the Bank may charge your Account a non-refundable Annual Wee equal to two tenths of one percent (0.2%) times your Credit Limit. The Annual Fee will he charged to your Account upon the anniversary date of your first payment due date (the first day of the month following the end of your first monthly statement cycle), and every twelve months thereafter There is no Annual Fee for the first year, and each year’s Annual Fee shall be waived if the average outstanding loan balance on the account for the prior month is greater than 50% of your Credit Limit

Most mortgages do not have the ability to do transactions, and traditional home Equity lines of credit only let you write a low number of checks (often with a minimum draw). The Green Account gives you full transactional capabilities, which is what the annual fee helps offset. Compared to tho amount of interest you’ll be able to save, it’s a relatively small fee.

29. Do you need “Impound account” payments for my property taxes and insurance premiums?
No. Because of the line of credit, interestingly minimum payment characteristics of the Green Account, it would be impractical to require additional separate impound account payments. This can be a real advantage to the borrower. Instead of being forced to save funds in a low-yielding impound account, you can make your money work harder and earn more for you by keeping it in your Green Account. Then, when it’s time to make your property tax or insurance payment) simply write them a check to access your Green Account funds.

30. Does the Green Account have any other advantages?
Yes. A big bonus of a Green Account is that you can greatly simplify your money management activities. You may currently spend significant time and effort deciding where to place your funds to your best advantage, researching, analyzing and comparing savings or investment alternatives, rates and terms, then need to manage account balances and transfer funds between accounts. You would have great difficulty finding a better savings or investment return with less risk than investing In your Own home by making deposits to your Green Account, and getting a guaranteed rate of return equal to your Green Account mortgage rate

31. Is the Green Account available for investment properties?
Yes. The Green Account is available for your primary residence, second home, investment 1-4 SFRs as well as for Apartments and Commercial Real Estate.

32. Is the Green Account available for 2nd TD’s?
Yes. With The Light Green Account, the Index that will be used is prime rate. And, you also have your choice of rate adjustment terms (monthly, or fixed for 3 years then adjustable monthly).