Pledge Asset Mortgage
offered by Morgan Stanley
Private Bank, National Association
Home purchases typically require a cash down payment. To raise the money, home buyers
often must liquidate a portion of their securities portfolio, potentially incurring adverse tax
consequences or compromising an overall investment strategy.*
The Pledge Asset Feature offered by Morgan Stanley Private
Bank, National Association allows you to finance up to 100%
of the lesser of either the purchase price or appraised value
of a residential property, by pledging the securities in your
account in lieu of a down payment. This feature can be part of
a strategic approach to borrowing that allows you to maintain
your securities while meeting your home financing and longterm investment objectives.
How this Feature Works
With a Pledge Asset Mortgage, you
may be able to pledge eligible securities as collateral for a
Morgan Stanley Home Loan in lieu of making a cash down payment.
UNDERSTANDING THE FEATURE.
ESTABLISHING THE PLEDGE ACCOUNT AND MAINTENANCE REQUIREMENT.
The Pledge Amount will vary and will be determined during the loan
application process. The set up amount for the Pledge Account is
130% of the Pledged amount. The value of the securities held in the
Pledge Account must be maintained at 110% of the Pledge Amount.
If the value of the securities in the Pledge Account falls below
the maintenance level, additional securities or other eligible
collateral will be required for deposit within three (3) business
days to maintain compliance with the terms and conditions of
the home loan. You may continue to trade the securities in the
Pledge Account as long as your account remains at or above the
required maintenance level.
RELEASE OF SECURITIES. You may submit a written request for early
release of the pledged securities provided:
• You have had the loan for at least one year; and
• No late mortgage payments in the last 12 months, and
• A new appraisal indicates that the home value is within the
current Loan to Value guidelines (LTV). If the home is not
within the LTV guidelines, you may pay down the principal
mortgage balance to bring the home within the LTV to either
release the securities or maintain the pledge.
Benefits of Pledge Asset Feature
A FIRST MORTGAGE — WITHOUT CASH DOWN PAYMENT. First mortgage
loans with the Pledged Asset Feature offer up to 100% financing
at competitive rates. The Pledged Asset feature allows you to own
the home you want without compromising your investments, so
your assets keep right on working for you.
You can sponsor an immediate family
member using the Pledged Asset Feature. In a sponsorship, you
pledge your securities for an eligible family member’s mortgage
loan. Eligible securities remain in the sponsor’s name and the home/
mortgage is in the family member’s name so there is no need to
comingle assets or liabilities. The sponsor maintains ownership
of the investment in the Pledge Account.
SPONSOR A FAMILY MEMBER.
ADDITIONAL INFORMATION:
• If you would like to submit a new application, call 1-800-473-5584.
• If you have Pledge Account set-up questions, speak to your
Morgan Stanley Private Banker.
Accounts and Securities That Can
Be Used in a Pledge Account
The table below shows the types of accounts and securities that are eligible to fund your Pledge
Account. Eligible pledged securities must be held at Morgan Stanley. There is no requirement for
private mortgage insurance. Table effective as of September 2012. Subject to change.
eligible securities
ineligible securities
eligible accounts
ineligible accounts
Valued Greater than $10/share
Valued Less than $10/share
AAA Accounts
Smith Barney FMA Accounts
Cash
CDs (any type)
Managed Accounts
IRA/SEPs/401k/Roth IRAs
Money Market
Foreign Equities
Fund Solution Accounts
Annuities
Mutual Funds (except Prime)
Stock Options
Custom Portfolio Accounts
Custodial Accounts
Stocks
Calls (covered or naked)
Revocable Trust Accounts
All Other Trust Accounts
Municipal Bonds
Managed Futures
Bank Deposit Program (BDP)
PLA, Express Credit or Margin Accounts
U.S. Treasury Bonds
Municipal Auction Rate Securities
Business Accounts
Exchange-Traded Funds (EFTs)
Structured Products
Transfer on Death Accounts
Restricted Stock
(including Morgan Stanley)
Concentrated position within an account
MS Equity Funds
Accounts with Check Privileges, ACH or
Debit Cards
Morgan Stanley Stock including
any accounts that are funded
by Morgan Stanley
*Morgan Stanley and its Financial Advisors do not provide tax or legal advice. Clients should consult their personal tax advisor for tax-related matters and their
attorney for legal matters.
Morgan Stanley Home Loans are made by Morgan Stanley Private Bank, National Association, not Morgan Stanley Smith Barney LLC. Morgan Stanley
Smith Barney LLC (“Morgan Stanley) is a registered broker-dealer and member SIPC, not a bank. The loans referenced herein are made by Morgan Stanley
Private Bank, National Association. Morgan Stanley Private Bank, National Association is member FDIC and primarily regulated by the Office of the Comptroller
of the Currency.
These products may not be available in all states and are limited to U.S. citizens and permanent resident aliens only. Residential loans are not available in Guam,
Puerto Rico and the Virgin Islands. Other restrictions may apply. Morgan Stanley Private Bank, National Association. underwriting guidelines will apply. Loans are
subject to credit application and loan approval. Rates, terms and programs are subject to change without notice.
If the value of the pledged securities in your account drops below the agreed upon level stated in your loan documents, you will be required to deposit additional
securities or other collateral (such as cash) to stay in compliance with the terms of the mortgage. If you do not, your pledged securities may be sold to satisfy such
obligation, and you will not be entitled to choose which assets will be sold. Thus, in deciding whether the Pledged-Assets Mortgage feature is right for you, you
should consider the degree to which you are comfortable subjecting your investment in a home to the fluctuations of the securities market.
Pledged Asset Mortgage feature available on non-conforming loans only and is not available in Washington, DC and West Virginia.
Morgan Stanley Smith Barney LLC. 2000 Westchester Avenue, Purchase, NY 10577. Tel: 800-869-3326. Nationwide Mortgage Licensing System Unique Identifier
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Mortgage Licensee No. 23976. Kansas Licensed Mortgage Company No. MC.0025024. Massachusetts Mortgage Broker License No. MB5439. Montana Mortgage
Broker License No. 171760. Licensed by the New Hampshire Banking Department. Licensed by the New Jersey Department of Banking and Insurance.
Registered Mortgage Broker — NYS Banking Department. Ohio Mortgage Broker Act Certificate of Registration No. MB.804039.000 Rhode Island
Licensed Loan Broker. Mortgage brokers may not make loans. Private Bankers are employed by Morgan Stanley Private Bank, National Association.
Funds drawn are not to be used to purchase, trade, or carry marginable securities, repay margin debt or to make payments on any amount owed under the
Note or loan agreement.
©2013 Morgan Stanley Smith Barney LLC. Member SIPC. CRC667863 CLS6620071 CS 7557533 06/13