Tech-based mortgage lender Better has reportedly laid off 25% of its U.S. mortgage sales and origination team as it expects the mortgage market to continue to get tougher. The layoffs came just two weeks after the company closed a special purpose acquisition company (SPAC) merger that raised over $500 million in funding.
A spokesperson for Better stated that the company is focused on making prudent and disciplined decisions in order to continue serving customers and shareholders for the long-term. The spokesperson also noted that recent projections and remarks from Federal Reserve Chair Jay Powell indicate no near-term relief from elevated borrowing costs, suggesting that the mortgage market will continue to face challenges.
While Better declined to comment on the exact number of affected employees, sources report that the company’s mortgage originations team now employs 75 workers in the U.S., with additional employees based in India. However, Better did confirm that the team currently employs over 100 people.
In the 18 months leading up to its SPAC merger, Better reduced its global headcount by 91%, from a peak of 10,400 workers in Q4 2021 to 950 team members as of June 8. Of those, approximately 410 were located in the U.S., 420 in India, and 120 in the U.K. In June, 170 Better team members in mortgage production roles were based in the U.S., while 230 were located in India.
Founded in 2015, Better gained popularity for its online application process and competitive rates for homeowners refinancing their existing mortgages. However, the company experienced a decrease in purchase loan volume compared to the industry as interest rates rose. As a result, Better has turned to B2B partnerships with companies like Ally Bank and American Express, which now accounts for nearly half of its business.
Despite the challenges in the mortgage market, Better remains committed to hiring more seasoned professionals and investing in technologies such as Tinman and One Day Mortgage. The company’s technology has streamlined and automated major homeownership functions, creating efficiencies that are especially valuable in the current interest rate environment.
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