Of the $844 million in production volume in the first quarter of 2023, Refice accounted for $70 million and purchase credit accounted for $774 million. Better.com’s funded loan volume in the first quarter of 2023 is down from $7 billion during the same period in 2022.
“We also reduced our funded debt volume by approximately 80% year-over-year from $58 billion in the year ended December 31, 2021 to $11.4 billion in the year ended December 31, 2022,” according to the filing.
The disclosure states that Better’s financial performance began to deteriorate in the second half of 2021 and continued through the first quarter of 2023 as a result of a number of factors including high mortgage rates, damage to its reputation from negative media coverage and continued investment in its business . ,
“The changes will be made in the third quarter of 2021 following a restructuring of its sales and operations teams and later in 2022 to accommodate Better’s reduced workforce and lower demand for home loans in a higher interest rate environment,” the filing said. As a result there has been a drop in productivity.”
As of June 8, Better.com had approximately 950 team members, down 91% from its peak of approximately 10,400 employees in the fourth quarter of 2021.
In June, the digital mortgage lender decided to change its real estate strategy, moving to a partner agent model, where Better.com would partner with outside agents as referral partners.
As part of a shift to its operating model of in-house licensed professionals, Better.com eliminated agents in its real estate brokerage subsidiary. Better Real Estate LLC,
As of June 8, approximately 90 employees worked in the Better Plus business line, primarily as real estate and insurance agents. This is a decline of 1,800 team members in the BetterPlus business line during the fourth quarter of 2021.
The filing shows Better.com has three separate warehouse credit lines with a combined amount of $1 billion. Two warehouse credit lines – $250 million each – expire on June 6 and another $500 million line has a maturity date of July 10.
The profit on sales margin for the three months ended March 31, 2023 stood at 1.89%, while the profit on sales margin for the first quarter in 2022 and 2021 stood at 1.11% and 2.88%, respectively.
Better.com expects profit on sales margin “to remain compressed due to significantly lower funded loan volumes compared to 2020 and Q1 2021 levels,” the filing said.
The mortgage lender’s total market share was 0.3% in Q1 2023, down from 0.9% in Q1 2022 to nearly 67%. Better.com ranks it as the 59th largest mortgage lender in the country. inside mortgage finance,
The company announced going public via a special purpose acquisition company (SPAC) in May 2021, and blank-check firm Aurora has since extended the deadline to complete its merger three times.
A handful of non-bank mortgage lenders went public via SPACs during the years of the pandemic, but a combination of rising redemption rates — which indicate how many investors are exchanging their shares to get their money back – And sharp interest rate hikes have made this an unfavorable environment for SPACs.
If Aurora is unable to complete the merger by the September 30, 2023 deadline, and is unable to complete another business combination by that date, Aurora will be dissolved and the public shares redeemed.
