Better Home & Finance Holding Co. has imposed another round of cost costs, including the elimination of layers of management and loan support roles the company says will be permanently replaced by artificial intelligence tools, as the digital mortgage lender reported a wider net loss in the third quarter.
Founder Vishal Garg, who regained control of the board of directors and returned to a leadership role in early October following a proxy battle, told analysts Monday that Better has removed managers across the company representing more than $3.5 million in annualized savings.
“Those management responsibilities are now performed by AI agents and dashboards and delivered directly to the most senior people in each part of our organization,” said Garg, who now serves as head of product, platform and innovation. “These cuts are not temporary. They are roles forever eliminated by AI and will not return as we scale volume.”
According to Garg, Better eliminated its home lending associate position, a role that handled early customer outreach and application preparation before handoff to a loan officer. Those tasks are now being handled by the company’s AI system, Betsy, he said.
Better also removed several layers of traditional management titles, including vice presidents and directors, leaving what Garg described as essentially C-level or executive vice president leaders working directly with frontline staff.
Wider loss
Better reported a net loss of $36.5 million in the third quarter, up from a $30.6 million loss in the second quarter but slightly improved from a $39.1 million loss in the third quarter of 2025. The quarter unfolded as mortgage demand remained under pressure from higher interest rates, with the 10-year Treasury yield rising about 15% during the period.
The company originated $1.4 billion in loans in the third quarter, or 4,748 units, representing 15% year-over-year growth. Purchase loans accounted for 55.6% of production, refinances were 25.5% and home equity lines of credit (HELOCs) were 18.9% of the total. By channel, platform loan volume totaled $792 million and direct-to-consumer production reached $603 million.
Garg told analysts that “interest rate headwinds, oil prices, and the general uncertainty around the Iran war weighed on loan volume.” He added that he believes the boardroom fight also hurt business metrics. “We believe the prior board’s proxy contest lowered conversion and pushed out partner launches,” he said.
Better ended the third quarter with $77.5 million in cash and cash equivalents.
Leadership battle
The quarter was marked by a leadership struggle that temporarily removed Garg from control of the company he founded while being replaced by activist investor Daniel Lewis on Aug. 3. Proxy fights that seek to fully replace a public company’s board rarely succeed and typically take one to two years, Garg said, citing information he received from his advisers.
Garg returned to a leadership position roughly two months later, backed by shareholders representing 52% of the company’s voting power, he said. Better spent $12.8 million in cash on the proxy contest and a related shareholder rights plan, often referred to as a poison pill.
Following the fight, Better added board members Bing Gordon, a founder of Electronic Arts; Steve Sarracino, founder of growth equity firm Activant Capital; and Linda Yaccarino, former CEO of social media platform X.
Garg said the company’s operating metrics deteriorated during his absence. Loan officer talk time fell 29%, emails and responses sent by salespeople declined 20%, and production hours logged by staff in the company’s Tinman system fell more than 25%, according to comments given to analysts.
Q4 initiatives
In the fourth quarter to date, Better said it launched an AI-powered HELOC product with a large existing partner and expanded its wholesale platform to 39 signed brokerages, representing an estimated $400 million in annual home equity volume. The company said it has completed $30.4 million in annualized savings toward a $64.2 million cost-reduction target.
Better expects adjusted EBITDA-basis operating expenses between $45 million and $47 million in the fourth quarter, according to guidance shared with analysts.
The company is also in the process of finalizing the sale of U.K.-based Birmingham Bank. The buyer has placed 10 million pounds in escrow, which has been converted into Tier 2 capital at the bank, Better executives said.
“We expect the transaction to close in the first quarter of 2027, subject to regulatory approval, and to generate approximately $65 million of additional cash,” chief financial officer Loveen Advani told analysts.