Embattled digital lender Better.com launched a program that will allow customers to apply for a mortgage, get pre-approved, lock their rate and receive a mortgage commitment letter within 24 hours.
The official rollout of the program, dubbed “One Day Mortgage,” comes after Better.com launched it in beta to a small segment of its customers in the second week of January.
“In today’s rising interest rate environment, speed removes the headache and anxiety of extended wait times for mortgage approvals, and saves customers money in the process,” the company said in a statement.
It generally takes about 20 to 45 days for a buyer to receive a mortgage commitment letter depending on all the conditions being met.
CEO Vishal Garg first announced the program at the Inman Connect conference in New York.
Better.com claims to have processed more than $50 million in One Day Mortgage commitments with clients receiving a commitment letter in an average of 12 hours.
Available in 50 states, clients who are salaried W2 employees and make a downpayment of at least 3% on a conforming Fannie Mae or Freddie Mac mortgage are eligible for Better.com’s One Day Mortgage program.
Better.com, founded by Garg in 2014, expanded rapidly during the refi boom, but has struggled mightily since the market turned to purchase and a series of scandals.
Prospects for Better.com’s plans to go public via a special purpose acquisition with Aurora Acquisition Corp., initially slated for the fourth quarter of 2021, is dim given market conditions.
Aurora is seeking a third extension to its deadline for merger with Better.com, citing insufficient time to complete the transaction by March, which was already pushed back twice.
If the extension proposal is not approved and the firms don’t complete the merger by March this year, Aurora will cease all operations, a recent Securities and Exchange Commission filing showed.
The company grew its headcount by almost five-fold to 10,000 employees in 2021 from about 2,000 employees in 2019. Origination volume increased to $58 billion from $4.9 billion in the span of two years. It raised $905 million across several funding rounds and received a $750 million loan from SoftBank in 2021.
But the company gained public infamy when Garg fired 900 employees via Zoom in December 2021. Since then, the lender conducted at least three rounds of layoffs in 2022 impacting staff in India and in the United States.
The company’s financials have deteriorated – it lost $221 million in the first quarter of 2021, compared to a $137.5 million profit 12 months ago. The lender didn’t post its financial performance for the second or third quarters, which they had done in SEC filings through Aurora.
Better.com originated $9.8 billion in production volume as of September 30, a decline of 76% from the same period in 2021, Inside Mortgage Finance data showed. IMF pegged the firm as the 42nd-largest lender with a market share of just 0.5%.