Better
Home
&
Finance
Holding
Co.,
the
parent
of
digital
lender


Better,
reported
a
net
loss
of
$54.1
million
in
the
third
quarter
of
2024
during
an
earnings
call
on
Tuesday.
By
comparison,
the
company
lost
$41.4
million
in
Q2
2024
and
$353.9
million
in
Q3
2023.

Better
reported
third-quarter
revenue
of
$29
million,
down
from
$32.3
million
in
the
prior
quarter
but
up
from
$4.9
million
in
the
same
period
a
year
ago.
The
company’s
earnings
release
noted
a
nonrecurring
gain
of
$5.5
million
in
Q2
2024
related
to
mark-to-market
impacts
on
its
lock
pipeline. 

The
New
York-based
digital
homeownership
platform
saw
its
revenue

take
a
dip
as
it
continues
to
invest
in

artificial
intelligence
(AI)
and
build
out
its
retail
channel.
Founder
and
CEO

Vishal
Garg
made
a
eye-popping
statement
when
he
opined
that
“in
the
next
10
years,
99%
of
the
(mortgage)
tasks
will
be
completed
by
bots
and
1%
by
humans.” 

“The
bulk
of
the
tasks
that
are
required
to
process
a
mortgage
are
going
to
be
performed
by
AI
bots
over
the
next
10
years,”
Garg
said
in
an
interview
with

HousingWire.
“And
I
think
the
reason
why
is
if
you
look
at
all
the
discrete
tasks
that
go
alongside
making
a
mortgage
—
whether
it’s
collecting
information,
processing
documents,
staring
and
comparing
between
a
paystub
and
a
W2,
and
what
the
consumer
inputted
on
the
screen
—
those
are
all
things
that
a
computer
can
do
far,
far
better
than
a
human.”

The
company
posted
an
adjusted
EBITDA
loss
of
$38.7
million
in
Q3,
compared
to
$23.3
million
in
the
prior
quarter
and
$53.9
million
in
the
same
period
last
year.

The
company
also
reported
a
funded
loan
volume
of
$1.035
billion
for
Q3
2024,
up
42%
year
over
year
and
up
8%
quarter
over
quarter,
with
71%
of
this
volume
attributed
to
purchase
loans.
Its
funded
volume
was
also
driven
by
growth
in
refinance
and
home
equity
originations,
including
home
equity
lines
of
credit
(HELOCs)
and

closed-end
second-lien
mortgages.

“In
Q3
we
continued
leaning
into
growth,
driving
a
quarter-over-quarter
increase
in
funded
loan
volume
in
line
with
the
guidance
we
provided
last
quarter,
alongside
increases
in
our
growth
expenses
including
loan
team
compensation
and
marketing,”
chief
financial
officer

Kevin
Ryan
said
during
the
earnings
call.

Better
reported
that
it
ended
Q3
2024
with
$480.1
million
in
cash,
restricted
cash,
short-term
investments
and
self-funded
loans.

“We
are
pleased
with
the
year-over-year
growth
we
achieved
in
Q3
and
the
opportunity
to
help
thousands
of
Americans
achieve
their
homeownership
goals
this
quarter,“
Garg
said
in
a
statement.
“Our
team
delivered
these
results
despite
limited
interest
rate
relief
and
continued
macro
headwinds.”

Other
highlights
from
Better
included
positive
early
results
from
its
AI
investments,
namely
with

“Betsy,”
a
tool
that
assists
customers
with
the
mortgage
process
from
preapproval
through
closing.
Betsy
uses
Better’s
loan
engine,
Tinman,
and
is
a
product
the
company
hopes
to
white
label
and
bring
public
in
the
near
future,
Garg
confirmed
on
the
earnings
call.
He
added
that
since
Betsy
is
so
new,
there
was
no
concrete
data
available
to
report
for
Q3. 

Better’s
earnings
report
also
included
the
announced
hiring
of
the
executive
team
from

NEO
Home
Loans
to
build
out
a
distributed
retail
channel.
The
goal
is
to
combine
Better’s
AI
technology
with
NEO’s
local
loan
expertise
to
increase
market
reach,
especially
in
the
purchase
mortgage
segment. NEO
was

previously
expected
to
close
in
early
2025.

“We
expect
to
bring
on
their
retail
branches,
which
are
about
50
retail
branches,
onto
our
better
platform,”
Garg
said
on
the
call.
“What
that
means
specifically
is
that
NEO
Home
Loans
will
be
operating
on
Tinman,
leveraging
Better’s
platform
to
service
the
customers
that
they
currently
have.”

Garg
included
that
the
investment
in
NEO
comes
directly
from
Better’s
balance
sheet
and
will
operate
under
a
typical
profit-and-loss
model.
In
terms
of
compensation,
Garg
said
that
he
envisions
a
different
model
than
Better’s
call-center
loan
officers.

“Our
first
competitive
advantage
is
our
manufacturing
cost
per
loan
is
significantly
lower
and
our
productivity
per
loan
officer
is
significantly
higher,
even
for
purchase
transactions,“
Garg
explained.

“And
two,
we’re
going
to
be
able
to
offer
customers
things
like
one-day
mortgage
and

one-day
HELOC,
which
are
things
that
you
know
traditionally
are
not
available
in
the
retail
channel.
And
then
three,
the
NEO
loan
officers
are
going
to
get
the
benefit
of
being
able
to
serve
Better’s
customer
base
in
the
local
markets
you
know
that
they
operate
in.”

Garg
said
that
the
company’s
persistent
investments
in
AI
aren’t
going
to
halt
hiring
activities
anytime
soon.

“We’re
going
to
continue
to
add
people
thoughtfully.
One
of
the
things
that
we
have
been
doing
when
we’re
adding
people
is
measuring
their
adaptability
to

technology
and
to
technology
doing
the
task
for
them,”
he
said.
“We’re
pretty
proud
to
say
of
the
folks
that
we’ve
onboarded
this
year,
a
very
significant
majority
of
them
have
done
well
on
the
Tinman
platform,
and
have
gone
from
doing
two
loans
a
month
to
doing
10
loans
a
month.” 

Related