Key facts
- Better removed management layers representing more than $3.5 million in annualized savings, Garg told analysts.
- Garg said the home lending associate role and several vice president and director layers were eliminated.
- Better originated $1.4 billion in loans in the third quarter, or 4,748 units, up 15% year over year.
- Better ended the third quarter with $77.5 million in cash and cash equivalents.
- Better said it has completed $30.4 million in annualized savings toward a $64.2 million target.
- CFO Loveen Advani said the Birmingham Bank sale is expected to close in the first quarter of 2027.
Better Home & Finance Holding Co. reported a net loss of $36.5 million in the third quarter, compared with a $30.6 million loss in the second quarter and a $39.1 million loss in the third quarter of 2025. The digital mortgage lender originated $1.4 billion in loans, or 4,748 units, up 15% year over year. Purchase loans were 55.6% of production, refinances 25.5% and home equity lines of credit 18.9%. Platform loan volume was $792 million and direct-to-consumer production $603 million.
Founder Vishal Garg, who returned to a leadership role in early October after a proxy fight, told analysts on Monday that Better had removed managers across the company representing more than $3.5 million in annualized savings. He said the home lending associate position and several layers of vice president and director titles were eliminated, with tasks now handled by the company's AI system, Betsy. "Those management responsibilities are now performed by AI agents and dashboards and delivered directly to the most senior people in each part of our organization," Garg said.
The quarter was marked by a leadership struggle. Activist investor Daniel Lewis replaced Garg in control of the company on August 3, and Garg returned about two months later, backed by shareholders representing 52% of voting power, he said. Better spent $12.8 million in cash on the proxy contest and a related shareholder rights plan. Garg said loan officer talk time fell 29%, emails and responses sent by salespeople declined 20%, and production hours logged in the company's Tinman system fell more than 25% during his absence.
Better ended the third quarter with $77.5 million in cash and cash equivalents. In the fourth quarter to date, it launched an AI-powered HELOC product with a large existing partner and expanded its wholesale platform to 39 signed brokerages, representing an estimated $400 million in annual home equity volume. It said it has completed $30.4 million in annualized savings toward a $64.2 million cost-reduction target and expects adjusted EBITDA-basis operating expenses of $45 million to $47 million in the fourth quarter.
Better is finalizing the sale of U.K.-based Birmingham Bank. The buyer has placed 10 million pounds in escrow, converted into Tier 2 capital at the bank. CFO Loveen Advani said the transaction is expected to close in the first quarter of 2027, subject to regulatory approval, and to generate approximately $65 million of additional cash.