Better Home & Finance reported a 15% increase in third-quarter loan volume, fueled by growth in its technology platform business, but the lender continues to operate at a loss despite an aggressive cost-cutting campaign.
The company's next move could be more consequential than its earnings. Better has signed 39 brokerages to its Tinman Go wholesale platform and plans to expand beyond home equity lending into Non-QM and conventional mortgages.
"Brokers want competitive rates, fast answers, and confidence that their borrowers will have a smooth experience all the way through closing," said founder Vishal Garg during the company's Nov. 9 earnings call.
The signed brokerages represent approximately $400 million in potential annual home equity volume, according to Better. Garg said the company sees an opportunity to capture as much as 80% of that business, or roughly $320 million annually.
That is an ambition, not production already secured. But it signals how aggressively Better intends to pursue wholesale business as it looks for ways to grow without the customer acquisition expenses associated with traditional retail lending.
Volume Grows, But Losses Persist
Better reported $1.4 billion in loan volume for the quarter ended Sept. 30, up from $1.21 billion a year earlier, according to its third-quarter earnings release.
Revenue rose 9% to $45.1 million, while its GAAP net loss narrowed to $36.5 million from $39.1 million.
Its adjusted EBITDA loss, however, widened to $29.7 million from $22.9 million a year earlier.
Better reported approximately $12.8 million in expenses related to its recent proxy dispute and other one-time legal costs. Excluding those expenses, the company said its adjusted EBITDA loss would have been $16.8 million, an improvement over last year.
The results follow a contentious leadership dispute that returned Garg to an operational role after a shareholder-led overhaul of the company's board.
Platform Lending Takes a Larger Share
Better's Tinman platform generated $792 million in third-quarter loan volume, up 64% year over year and accounting for 57% of total production. Direct-to-consumer lending contributed $603 million.
Purchase loans represented the largest share of production at $776 million, or nearly 56% of quarterly volume. Home equity lending, including HELOCs and closed-end second liens, contributed $263 million.
Better includes loans processed for strategic partners but not funded by the company in its total reported volume. Its separately reported platform volume measures loans funded through Tinman partner relationships.
And while overall volume increased from a year earlier, it declined approximately 16% from the second quarter's $1.67 billion.
Cost Cuts Continue
Better has completed actions expected to generate $30.4 million in annualized savings toward a $64.2 million target, up from the $22.9 million reported in October.
The company expects fourth-quarter operating expenses, measured on an adjusted EBITDA basis, of $45 million to $47 million.
Better's push to automate more of its lending operation is also part of a broader restructuring strategy NMP reported in October, including plans to reduce production costs and rely more heavily on AI.
The expansion could mean another wholesale option for home equity products and eventually conventional and Non-QM loans. Better's results show how effectively technology and partner distribution can reduce mortgage origination costs.
