Loans

Reshape LO portfolio better as losses shrink



digital lender Better Homes and Finances The move comes as the bank ditches its compensation model amid a refinancing boom as it trims quarterly losses.

The company announced Thursday that its second financial report since going public last summer showed a net loss of $59 million in the fourth quarter, an 83% improvement from the same period last year. Net loss $340 million In the third quarter, this was exacerbated by the financial impact of the merger and listing.

Better supervisors are optimistic about future performance after shift change loan officer salary Last year, we moved to a commission-based compensation plan, moving away from commission-free, fixed LO compensation resulting from the low interest rate environment of the past several years.

“We are excited to see the early success of this new operating model and the experienced sales talent we are hiring,” founder and CEO Vishal Garg said on a conference call Thursday morning. Conversion improvements, and better alignment between our yields and costs.”

The company reported $527 million in financing loans in the fourth quarter and 8,569 loans totaling $3 billion for the year. Output in the latest three months was down from $731 million in financing loans in the third quarter.

Better disclosed a net loss of US$534 million this year, a sharp decrease from the same period last year Loss of $879 million in 2022The bank also reported a net loss of $303.8 million in 2021. The bank recorded a significant deficit amid a massive, lengthy layoff that saw its headcount fall from more than 10,000 to just over 1,000 people.

The company also cut spending last year by nearly $1 billion, or 71%, to $366 million in 2023.

Better’s total revenue as of December was $9 million, bringing full-year revenue to $77 million. Better had $554 million in cash, restricted cash and short-term investments as of Dec. 12, after receiving a $565 million capital infusion at the time of the merger. 31.

Among other product launches this season, the Manhattan-based company promoted Better Duo, which allows third-party real estate agents to become licensed loan originators. The program has 48 production agents on staff this season, compared with 12 at the end of last year.and follow Better’s Restructure its agency program last summer.Garg said the measure was aimed at attracting homebuyers who may now have to weigh How to Pay Real Estate Agent Commission.

In recent months, Better has launched a Department of Veterans Affairs digital loan and one-day home equity credit product, which has reportedly seen a nearly 500% surge in transaction volume over the past 12 months. White Label Mortgage Services Beyond Inc. is an e-commerce giant that owns Overstock.com and Bed Bath & Beyond.

Garg also spoke about the company stock priceAs of midday, the price per share was $0.52, suggesting that Better would pursue a reverse stock split or similar measure, which would be authorized at the company’s yet-to-be-announced annual meeting.

Executives have repeatedly touted Better’s new LO compensation model as encouraging. Garg said Better provided less than 10% of the funding during a launch period of 20,000 applications. A more experienced LO can help the company gain access to competitors who are funding applications at rates of 20% to 40%. %.

“[It’s] This is a true business model pivot that we hope will help close the gap and significantly improve unit economics between us and the rest of the industry. “





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