Better.com is struggling to deal with the waning influence of refis in the mortgage market, with preliminary results published by their SPAC partner revealing that the digital lender expects a net loss between $85 million and $100 million in the third quarter. And the forecast looks even worse for the fourth quarter, documents show.
According to an S-4 filed by Aurora Acquisition Corp. with the Securities and Exchange Commission last week, the digital lender expects further declines in the fourth quarter, that will likely “exceed third quarter losses.”
The filing noted that the fluctuations in interest rates – which affect refis more than purchase business – and a recent reorganization of Better’s sales and operations teams has put pressure on the company’s net income and will continue to do so for the foreseeable next quarter, as the company attempts to find footing in a purchase market.
In the second quarter, the company also reported a net loss of $86 million. At the time, the company’s spokesperson said that Better was impacted by “the same headwinds as everyone in the industry.”
Meanwhile, the New York-based lender predicts that its gain-on-sale margin will be in the range of 1.87% to 1.97% in Q3, up from 1.62% in the second quarter of 2021.
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