American mortgage origination firm
Better Home & Finance Holding Company doing business as Better or Better.com, headquartered in New York City, provides mortgage origination and related services such as title insurance and home insurance online in the United States and United Kingdom.[4]
Its largest source of business is an integrated relationship with Ally Financial, by which Better sells, processes, underwrites and closes Ally's mortgages, while Ally retains control of marketing, advertising and loan pricing.[5] Better sells mortgages to approximately 30 secondary mortgage market investors, including Fannie Mae and Wells Fargo. The company secures lead generation from personal finance companies such as American Express, Credit Karma and NerdWallet.[6][5]
History
In February 2014, Vishal Garg founded the company after he and his wife had a negative experience obtaining a mortgage to buy their first home.[7]
In 2016, the company launched Better Mortgage and was approved to be a Fannie Mae seller/servicer.[8]
In April 2019, the company partnered with Ally Financial to operate its mortgage platform.[9] The number of people from traditionally underrepresented groups buying homes through Better's mortgage lending platform increased significantly in 2019, a development that The New York Times suggested was linked to the company's digital processes and minimal reliance on human brokers.[6][10]
In July 2021, Better acquired Trussle, a UK digital mortgage broker, for $9 million.[11] In September 2021, Better acquired Property Partner, a London-based crowdfunding platform.[12]
In May 2022, Harit Talwar was hired as chairperson.[13]
In February 2023, the company announced a deal with Amazon whereby Amazon employees are able to pledge their stock as collateral for a loan to cover the down payment on a house purchase, albeit at a slightly higher interest rate.[14] In August 2023, the company became a public company via a merger with a special-purpose acquisition company that included an investment from SoftBank Vision Fund; shares plummeted immediately after the SPAC merger.[15][16][17] The company was valued at $7.7 billion.[18]
Layoffs and controversy
In December 2021, Garg laid off 900 employees by videoconference and locked their electronic devices from accessing company material.[19][20][21][22][18] Garg also made comments to employees that were deemed "unruly", telling employees that he "hired the wrong people" and referring to employees as "slow," "dumb," and "embarrassing".[23] After much criticism, Garg took approximately a month off, returning in January 2022.[24][25][26]
On March 8, 2022, the company announced that an additional 3,000 people, or approximately one-third of employees, were laid off.[8][27][28] Some employees learned of their layoff when they received severance pay, before Better.com told them they were to be laid off.[29]
The company instituted another round of layoffs in April 2023; in this round, affected employees received individual calls, a severance package that included a minimum of 60 days compensation, up to three months of health coverage through COBRA, and assistance in their job searches.[30]
In June 2022, Sarah Pierce, a former senior executive at Better, filed a lawsuit alleging that the company misled investors in its financial filings. The company said that the suit was without merit but it prompted an investigation by the US SEC.[31] The case is in discovery until March 2024.[32][33][34]
Also in June 2022, the company also closed its real estate brokerage unit, laying off all staff.[35][36] The company had 150 agents as of 2021 and received 20% of agents' commissions in exchange for lead generation.[37]
That month, three senior executives left the company.[38]
In August 2022, a list of 250 or more US-based employees who were about to be terminated in another round of layoffs was leaked internally, leading to the termination of the employees who leaked the information.[39]
In 2023, Garg laid off more employees and had more job cuts resulting in shutting down the real estate team and the unit. As per midea reports, the company laid off a total of 4000 employees since December 2021.[40]
$51 million (1H 2023)
-$135 million (1H 2023)