(1) The following are unacceptable assets and may not be used in the computation of adjusted net worth:

(a) any asset or portion of an asset pledged to secure obligations of another mortgage broker, entity, or any person;

(b) an asset due from a control person or ultimate equity owner of the mortgage broker, from a related entity, their family members, or a related entity in which the control person or ultimate equity owner or family member has a financial or managerial interest;

(c) a business venture in an unrelated entity;

(d) the portion of an investment that reflects the ownership interest of the mortgage broker in a joint venture, affiliate, and/or other related entity which is carried at a value greater than equity, as adjusted. "Equity as adjusted" means the book value of the related entity reduced by the amount of unacceptable assets carried by the related entity;

(e) any intangible asset, such as goodwill, covenants not to compete, franchise fees, organizational costs, value placed on insurance renewals, or value placed on property management contract renewals;

(f) the value of any servicing contract not determined in accordance with Statement of Financial Accounting Standards (SFAS) No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities;"

(g) any asset not readily marketable and for which appraised values are very subjective. Examples include, but are not limited to, antiques, artwork, and gemstones;

(h) any amount in excess of the estimated realizable or recovery value of mortgages in foreclosure, constructions loans, or property acquired through foreclosure based on the value of the appraisal at the time of foreclosure reduced by taxes, insurance, expenses of sale, and improvements to the property;

(i) any asset that is principally used for the personal enjoyment or benefit of a control person or ultimate equity owner and not for normal business purposes. This includes automobiles and personal residences. "Principally used" means that any other use of the property must be solely incidental;

(j) that portion of contributed property, not otherwise excluded, in excess of the value as of the date of contribution determined by an independent appraiser;

(k) notes that have been 60 days or more delinquent in payments two or more times in the past two years or accounts receivable that are more than 30 days past due;

(l) foreign securities which are not traded on a United States security exchange;

(m) real property as follows:

(i) real property located outside the continental United States and its outlying areas;

(ii) real property that is a principal residence of a control person or ultimate equity owner;

(iii) real estate held for sale or investment if development will not start within two years from date of acquisition;

(iv) real property owned concurrently regardless of the form of cotenancy (including joint tenancy, tenancy by the entirety, and tenancy in common) except where all cotenants agree to act jointly; and

(v) life estates, leasehold estates, leasehold improvements, or future interests in real property;

(n) personal property;

(o) lines of credit or letters of credit; and

(p) speculative assets such as mineral rights.