Q2 2024 Better Home & Finance Holding Co Earnings Call

August 8, 2024

which is available on our investor relations website. Also available on our website is an investor presentation.

is an investor presentation.

Operator: Certain statements we make today may constitute forward-looking statements within the meaning of federal securities laws that are based on current expectations and assumptions. These expectations and assumptions are subject to risks, uncertainties, and other factors as discussed further in our SD filing that could cause our actual results to differ materially from our historical results. If you have no responsibility to update forward-looking statements, other than as required by law.

Operator: is an investor presentation. Certain statements we make today may constitute forward-looking statements within the meaning of federal security's laws that are based on current expectations and assumptions. These expectations and assumptions are subject to risks, uncertainties, and other factors as discussed further in our SD filing that could cause our actual results to differ materially from our historical results.

Speaker Change: Certain statements we make today may constitute forward-looking statements within the meaning of federal securities laws that are based on current expectations and assumptions.

These expectations and assumptions are subject to risks, uncertainties, and other factors as discussed further in our SEC filings that could cause our actual results to differ materially from our historical results. We assume no responsibility to update forward-looking statements other than as required by law.

Operator: If you have no responsibility to update forward-looking statements, other than as required by law. During today's discussion, management will discuss certain non-gap financial measures, which we believe are relevant in assessing the company's financial performance. These non-gap financial measures should not be considered replacement for and should be read together with our gap results. These non-gap financial measures are reconciled to gap financial measures in today's earnings release and investor presentation, both of which are available on the investor relations section of Better's website, and one file in our quarterly report on form 10Q files of the SEC.

Operator: During today's discussion, management will discuss certain non-GAAP financial measures, which we believe are relevant in assessing the company's financial performance. These non-GAAP financial measures should not be considered a replacement for and should be read together with our GAAP results. These non-GAAP financial measures are reconciled to GAAP financial measures in today's earnings release and investor presentation, both of which are available on the investor relations section of Better's website, and one file in our quarterly report on Form 10-Q files of the SEC.

during today's discussion management will discuss certain non-gaap financial measures which we believe are relevant and assessing the company's financial performance

these non-gaap financial measures should not be considered replacements for and should be read together with our gaap results

these non-gaap financial measures are reconiled to gaap financial measures in today's earnings release and investor presentation both of which areavailable on the investor relation section of betterterters' website and when filed in our quarterly report on form ten -q filed the dsec

Operator: Amounts described as of and for the quarter ended June 30th, 2024, represent a preliminary estimate as of the date of this earnings release and may be revised upon filing our quarterly report on Form 10-Q with the SEC. More information as of and for the quarter ended June 30th, 2024 will be provided upon filing our quarterly report on Form 10-Q with the SEC.

amounts described as of and four the quarter ended june thirtieth thousand and twenty four represent a preliminary estimate as of the date of this earnings release and may be revised upon filing our quarterly report on form ten q with the sec

Operator: Amounts described as of and for the quarter ended June 30th, 2024, represent a preliminary estimate as of the date of this earnings release, and may be revised upon filing our quarterly report on form 10Q with the SEC. More information as of and for the quarter ended June 30th, 2024 will be provided upon filing our quarterly report on form 10Q with the SEC.

Shaw: more information as of and four the quarter ended june thirtieth tontwenty twentyfour will be provided upon filing our quarterly report on form ten -q with the sec i will now turn the call over to the shaw

Rochelle: I will now turn the call over to the show. Thank you, Hana, and welcome to our second quarter of 2024 earnings call. We appreciate everyone joining us today and for your continued support as we drive towards our mission to make homeownership better, faster, and cheaper for our customers by building a technology platform that revolutionizes the experience of becoming and being a homeowner. We continue to make great progress towards our vision in which every customer can seamlessly buy, sell, refinance, and shore, and improve their home digitally online instantly. I'd like to start by highlighting some of our key achievements during the quarter.

Hana: Thank you, Hana, and welcome to our second quarter 2024 earnings call. We appreciate everyone joining us today and for your continued support as we drive towards our mission to make homeownership better, faster, and cheaper for our customers by building a technology platform that revolutionizes the experience of becoming and being a homeowner. We continue to make great progress towards our vision of a world in which every customer can seamlessly buy, sell, refinance, insure, and improve their home digitally, online, instantly.

Vishal Garg: Thank you, Hana, and welcome to our second quarter 2024 earnings call. We appreciate everyone joining us today and for your continued support as we drive towards our mission to make homeownership better, faster, and cheaper for our customers by building a technology platform that revolutionizes the experience of becoming and being a homeowner. We continue to make great progress towards our vision in which every customer can seamlessly buy, sell, refinance, insure, and improve their home digitally, online, instantly. I'd like to start by highlighting some of our key achievements during the quarter.

Shaw: Thank you, Hana, and welcome to our second quarter 2024 earnings call. We appreciate everyone joining us today and for your continued support as we drive towards our mission to make homeownership better, faster, and cheaper for our customers by building a technology platform that revolutionizes the experience of becoming and being a homeowner. We continue to make great progress towards our vision in which every customer can seamlessly buy, sell, refinance, insure, and improve their home digitally, online, instantly.

Rochelle: We continue to make great progress towards our vision in which every customer can seamlessly buy, sell, refinance, and shore, and improve their home digitally online instantly. I'd like to start by highlighting some of our key achievements during the quarter. We continue to lean into growth to drive increased volume balanced with ongoing efficiency improvements and discipline cost management to target reaching profitability in the medium term. In short, even in a market that remains challenged with historically low housing affordability and persistently high mortgage rates, we continue to deliver on the roadmap we set out at the start of the year, which included top-line growth and continued expense management.

Vishal Garg: We continue to lean into growth to drive increased volume, balanced with ongoing efficiency improvements and disciplined cost management to target reaching profitability in the medium term. In short, even in a market that remains challenged with historically low housing affordability and persistently high mortgage rates, we continue to deliver on the roadmap we set out at the start of the year, which included top-line growth and continued expense management. Compared with the first quarter of 2024, funded loan volume increased by 45 percent, and revenue rose by approximately 41 percent in the second quarter.

Rochelle: We continue to lean into growth to drive increased volume, balanced with ongoing efficiency improvements and disciplined cost management to target reaching profitability in the medium term. In short, even in a market that remains challenged with historically low housing affordability and persistently high mortgage rates, we continue to deliver on the roadmap we set out at the start of the year, which included top-line growth and continued expense management. Compared with the first quarter of 2024, funded loan volume includes by 45% and revenue rose by approximately 41% in the second quarter. We continue executing on strategies to increase conversion through additional products and services, as well as improved sales efficiency to drive higher pull-through on the approximately 60,000 monthly customers who begin their mortgage applications with us.

Speaker Change: I'd like to start by highlighting some of our key achievements during the quarter. We continue to lean into growth to drive increased volume, balanced with ongoing efficiency improvements and disciplined cost management to target reaching profitability in the medium term.

Speaker Change: In short, even in a market that remains challenged with historically low housing affordability and persistently high mortgage rates, we continued to deliver on the roadmap we set out at the start of the year, which included top-line growth and continued expense management.

Speaker Change: i'mcompared with the first quarter two thousand and twenty four funded loan volume increased by forty- five percent and revenue rose by approximately forty one percent in the second quarter

Rochelle: Compared with the first quarter of 2024, funded loan volume includes by 45% and revenue rose by approximately 41% in the second quarter. We continue executing on strategies to increase conversion through additional products and services as well as improved sales efficiency to drive higher pull through on the approximately 60,000 monthly customers who begin their mortgage applications with us. We also continue to increase revenue per loan, while still being a low cost provider and continue to optimize the revenue generated out of putinally invested cash and investments.

Vishal Garg: We continue executing on strategies to increase conversion through additional products and services as well as improve sales efficiency to drive higher pull-through on the approximately 60,000 monthly customers who begin their mortgage applications with us. We also continue to increase revenue per loan while still being a low-cost provider and continue to optimize the revenue generated on prudently invested cash and investments. Specifically, we have increased the volume of self-funded loans we choose to hold on our balance sheet that generate income between loan funding and sales to secondary investors.

Shaw: We continue executing on strategies to increase conversion through additional products and services as well as improve sales efficiency to drive higher pull through on the approximately 60,000 monthly customers who begin their mortgage applications with us.

Rochelle: We also continue to increase revenue per loan, while still being a low-cost provider and continue to optimize the revenue generated out of putinally invested cash and investments. Specifically, we have increased the volume of self-funded loans. We choose to hold on our balance sheet that generates income between loan funding and sales of secondary investors. Volume growth was primarily driven by growth and purchase loans, as well as home equity products, including Helox and closed-end second lien. These products remain attractive to our customers in an environment with persistently higher rates and higher cost of living because they enable borrowers to tap into the equity they have in their homes, which totals over 30 trillion in the United States today.

Speaker Change: We also continue to increase revenue per loan while still being a low-cost provider and continue to optimize the revenue generated out of prudently invested cash and investments.

Speaker Change: specifically we have increased the volume with self-funded loans we choose to hold on our balance sheet that generate income between loan funding and sales to secondary investors

Rochelle: Specifically, we have increased the volume of self-funded loans. We choose to hold on our balance sheet that generates income between loan funding and sales of secondary investors. Volume growth was primarily driven by growth and purchase loans, as well as home equity products, including helox and closed-end-second lean- These products remain attractive to our customers in an environment with persistently higher rates and higher cost of living because they enable borrowers to tap into the equity they have in their homes, which totals over 30 trillion in the United States today. Our second quarter growth was combined with continued expense discipline, with a focus on maximizing operating efficiency, resulting in quarterly total expenses, remaining approximately flat quarter over quarter, even with the top line growth we showed.

Vishal Garg: Volume growth was primarily driven by growth in purchase loans, as well as home equity products, including HELOCs and closed-end second lien loans. These products remain attractive to our customers in an environment with persistently higher rates and higher cost of living because they enable borrowers to tap into the equity they have in their homes, which totals over $30 trillion in the United States today. Our second quarter growth was combined with continued expense discipline with a focus on maximizing operating efficiency, resulting in quarterly total expenses remaining approximately flat quarter over quarter, even with the top-line growth we showed.

Speaker Change: Volume growth was primarily driven by growth in purchase loans, as well as home equity products, including HELOCs and closed-end second lien loans.

Speaker Change: these products remain atactive to our customers and environment with persistently higher rates and higher cost of living because they enable borrowers to tapen into the equity to have in their homes which totals over thirty trillion in the united states today

Rochelle: Our second quarter growth was combined with continued expense discipline, with a focus on maximizing operating efficiency, resulting in quarterly total expenses remaining approximately flat quarter over quarter, even with the top line growth we showed.

Speaker Change: our second quarter growth was combined with continued expense discipline with a focus on maximizing operating efficiency resulting in the quarterly total expenses remaining approximately flat quarter-over-quarter even with the top line growth we showed

Rochelle: As discussed on our first quarter's earnings call, I'd like to remind everyone of our strategic priorities for 2024. Our first priority is thoughtfully leading into growth, against which we showed continued progress this quarter. Since we announced our intention to begin leading back into growth in the fourth quarter of last year, we have increased our funded loan volume by 83% and revenue by approximately 78%. We continue to embrace the opportunity to grow our loan officer footprint, add additional marketing channels and new products and services to ensure we are well positioned as consumer demand returns to capture increased market share across our three main mortgage products: purchase, refinance, and home equity products.

Vishal Garg: As discussed on our first quarter earnings call, I'd like to remind everyone of our strategic priorities for 2024. Our first priority is thoughtfully leaning into growth, against which we showed continued progress this quarter. Since we announced our intention to begin leaning back into growth in the fourth quarter of last year, we have increased our funded loan volume by 83 percent and revenue by approximately 78 percent. We continue to embrace the opportunity to grow our loan officer footprint, add additional marketing channels, and new products and services to ensure we are well positioned as consumer demand returns to capture increased market share across our three main mortgage products, purchase, refinance, and home equity products.

Speaker Change: as discussed on our first quarter earning call i'd like to remind every one of our strategic priorities for two thousand and twenty-four our first priority is thoughtfully leading into growth against which we showed continued progress this quarter

Speaker Change: Since we announced our intention to begin leaning back into growth in the fourth quarter of last year, we have increased our funded loan volume by 83% and revenue by approximately 78%.

Speaker Change: We continue to embrace the opportunity to grow our loan officer footprint, add additional marketing channels, and new products and services to ensure we are well-positioned as consumer demand returns to capture increased market share across our three main mortgage products, purchase, refinance, and home equity products.

Rochelle: Looking at growth for each product compared sequentially with the first quarter of 2024, purchased loan volume increased by 50%. He lock volume, including home equity lines of credit and closed-end second lean loans, increased 76%, and refinance loan volume decreased by 5%. With high rates continuing to negatively impact rate turn refinances and customers with existing low mortgage rates, opting for home equity products instead of cash-out refinances. In purchase, we continue to see strong early results from the benefit of having experienced loan officers nurturing home buyers through their journey. In our home equity products, we see strong momentum given home values continue to appreciate while rates have remained high, and customers are looking to manage their monthly cash flow by tapping into the equity sitting in their homes without resetting the rates on their first lien mortgages.

Vishal Garg: Looking at growth for each product, compared sequentially with the first quarter of 2024, purchase loan volume increased by 50 percent. HELOC volume, including home equity lines of credit and closed-end second lien loans, increased 76 percent. And refinance loan volume decreased 5 percent, with high rates continuing to negatively impact rate-term refinances and customers with existing low mortgage rates opting for home equity products instead of cash-out refinances.

Speaker Change: Looking at growth for each product compared sequentially with the first quarter of 2024, purchase loan volume increased by 50 percent.

Speaker Change: HELOC volume, including home equity lines of credit and closed-end second lien loans, increased 76%, and refinance loan volume decreased 5%, with high rates continuing to negatively impact rate-term refinances and customers with existing low mortgage rates opting for home equity products instead of cash-out refinances.

Vishal Garg: In purchase, we continue to see strong early results from the benefit of having experienced loan officers nurturing homebuyers through their journey. In our home equity products, we see strong momentum given home values continue to appreciate while rates have remained high, and customers are looking to manage their monthly cash flow by tapping into the equity sitting in their homes without resetting the rates on their first lien mortgage. With a one-day HELOC, they can go online 24-7 and within a few hours have certainty on how much money they can save each month.

Speaker Change: In purchase, we continue to see strong early results from the benefit of having experienced loan officers nurturing homebuyers through their journey.

Rochelle: In our home equity products, we see strong momentum given home values continue to appreciate while rates have remained high and customers are looking to manage their monthly cash flow by tapping into the equity sitting in their homes without resetting the rates on their first lean mortgages. With a one day heel off, they can go online 24 seven within a few hours have certainty on how much money they can save each month.

Speaker Change: In our home equity products, we see strong momentum given home values continue to appreciate while rates have remained high and customers are looking to manage their monthly cash flow by tapping into the equity sitting in their homes without resetting the rates on their first lien mortgages.

Rochelle: With a one day heel off, they can go online 24 seven; within a few hours, have certainty on how much money they can save each month. In the second quarter, we saw continued improvements to our gain on sale margin, which increased to 2.43% in the second quarter of 2024 compared to 2.37% for the first quarter of 2024. Drivers of this margin improvement include increased pricing while still remaining below cost provider and a focus on driving customer retention through improved service, as well as continued efforts to optimize for the best execution across our network of loan purchasers, including the GSEs.

Speaker Change: with a one day he locked they can go online twenty-four seven and within a few hours have certainty on how much moneyy they can save each month

Vishal Garg: In the second quarter, we saw continued improvements to our gain on sale margin, which increased to 2.43% in the second quarter of 2024, compared to 2.37% for the first quarter of 2024. Drivers of this margin improvement include increased pricing, while still remaining the low-cost provider, and a focus on driving customer retention through improved service, as well as continued efforts to optimize for the best execution across our network of loan purchasers, including the GSA.

Rochelle: In the second quarter, we saw continued improvements to our gain on sale margin, which increased to 2.43% in the second quarter of 2024 compared to 2.37% for the first quarter of 2024. Drivers of this margin improvement include increased pricing while still remaining below cost provider and a focus on driving customer retention through improved service, as well as continued efforts to optimize for the best execution across our network of loan purchasers, including the GSEs.

Speaker Change: in the second quarter we saw continued improvements to our gain sil margin which creas the two point four three percent in the second quarter of two thousand and twentyfour comparedto two point three seven percent for the first quar of two thousand andtwentyfour

Speaker Change: Drivers of this margin improvement include increased pricing while still remaining the low-cost provider, and a focus on driving customer retention through improved service, as well as continued efforts to optimize for the best execution across our network of loan purchasers, including the GSEs.

Rochelle: In the second quarter, we also saw certain non-recurring benefits to gain on sale revenue that total approximately $9 million, including a one-time positive market impact on our lock pipeline and a recovery from a release of our loan repurchase reserve.

Vishal Garg: In the second quarter, we also saw certain non-recurring benefits to gain on sale revenue that totaled approximately $9 million, including a one-time positive mark-to-market impact on our loss pipeline and a recovery from a release of our loan repurchase reserve. Our second priority is improving operational efficiency and further variabilizing loan production expenses, which we also demonstrated in the second quarter.

Speaker Change: In the second quarter, we also saw certain non-recurring benefits to gain on sale revenue that total approximately $9 million, including a one-time positive mark-to-market impact on our loss pipeline and a recovery from a release of our loan repurchase reserve.

Rochelle: Our second priority is improving operational efficiency and further variableizing loan production expenses, which we also demonstrated in the second quarter. Over the past two and a half years, we have been intensely focused on significantly reducing expenses and maximizing operating efficiency during the highly challenging macro environment. While we lean into certain growth expenses such as marketing and compensation for larger loan production teams to produce higher volumes, these were offset by lower vendor and corporate compensation expenses compared with the first quarter of 2024. Our marketing and advertising expenses increased 87% from 4.6 million in Q1 2024 to 8.5 million in Q2 2024, and we expect these to further increase in order to support volume.

Speaker Change: our second priority is improving operational efficiency and further varabbalizing loan production expenses which we also demonstrated in the second quarter over the past two a half years we have been intensely focused on significantly reducing expenses and maximizing operating efficiency during a highly challenging macro environment

Vishal Garg: Over the past two and a half years, we have been intensely focused on significantly reducing expenses and maximizing operating efficiency during a highly challenging macro environment. While we lean into certain growth expenses, such as marketing and compensation for larger loan production teams to produce higher volumes, these were offset by lower vendor and corporate compensation expenses compared with the first quarter of 2024. Our marketing and advertising expenses increased 87% from $4.6 million in Q1 2024 to $8.5 million in Q2 2024, and we expect these to further increase in order to support volume. Additionally, our loan officer productivity remained above industry average and continued to benefit from the previously discussed shift to a sales compensation structure with lower salaries and higher commissions. We are also testing a variety of applications of AI within TinMan, both for internal efficiency and consumer-facing benefits.

Speaker Change: while we leadan to certain growth expenses such as marketing and compensation for larger loan production teams to produce higher volumes these were offset by lower vendor and corporate compensation expenses compared within the first quarter of two thousand and twentyfour

Rochelle: Our marketing and advertising expenses increased 87% from 4.6 million in Q1 2024 to 8.5 million in Q2 2024, and we expect these to further increase in order to support volume. Additionally, our loan officer productivity remained above industry average and continued to benefit from the previously discussed shift to a sales compensation structure with lower salaries and higher commissions. We're also testing a variety of applications of AI within Tin Man, both for internal efficiency and consumer facing benefits.

Speaker Change: Our marketing and advertising expenses increased 87% from $4.6 million in Q1 2024 to $8.5 million in Q2 2024, and we expect these to further increase in order to support volume growth.

Rochelle: Additionally, our loan officer productivity remained above industry average and continued to benefit from the previously discussed shift to a sales compensation structure with lower salaries and higher commissions. We're also testing a variety of applications of AI within Tin Man, both for internal efficiency and consumer-facing benefits. We're seeing early indications from these AI program investments geared towards sales and underwriting productivity, specifically around customer routing, data capture, and initial underwriting review of loan files. We believe these AI investments and our continued investments in core automations such as our automated initial review system or Air where for certain loan files Tin Man is capable of completing the entire initial underwriting fully, autonomously will help us drive customer conversion and operational efficiency at scale.

Speaker Change: additionally our loan officer productivity remain above industry amage and continue to benefit from the previously discussed shift to a sales compensation structure with lower salaries and higher commissions

Speaker Change: We are also testing a variety of applications of AI within TinMan, both for internal efficiency and consumer facing benefits.

Vishal Garg: We are seeing early indications from these AI program investments geared towards sales and underwriting productivity, specifically around customer routing, data capture, and initial underwriting review of loan files. We believe these AI investments and our continued investments in core automation, such as our automated initial review system, or AIR, where, for certain loan files, TinMan is capable of completing the entire initial underwriting fully autonomously, will help us drive customer conversion and operational efficiency at scale.

Speaker Change: we are seeing early indications from these ai program investments gear towards sales and underwriting productivity

Rochelle: We're seeing early indications from these AI program investments geared towards sales and underwriting productivity specifically around customer routing, data capture and initial underwriting review of loan files. We believe these AI investments and our continued investments in core automations such as our automated initial review system or air where for certain loan files Tin Man is capable of completing the entire initial underwriting fully, autonomously will help us drive customer conversion and operational efficiency at scale.

Speaker Change: specifically around customer routing, data capture, and initial underwriting review of loan files.

Speaker Change: We believe these AI investments and our continued investments in core automation, such as our automated initial review system, or AIR, where for certain loan files, TinMan is capable of completing the entire initial underwriting fully autonomously, will help us drive customer conversion and operational efficiency at scale.

Rochelle: When Tin Man autonomously handles certain tasks and interactions, it frees our team up for more complex or nuanced customer interactions.

Vishal Garg: When TinMan autonomously handles certain tasks and interactions, it frees our team up for more complex or nuanced customer interactions. In the second quarter, we also saw certain one-time non-recurring expense benefits, including reductions in certain reserves and a state tax refund. Aggregate one-time benefits amounted to approximately $1 million in contract expenses in the second quarter.

Speaker Change: When TinMan autonomously handles certain tasks and interactions, it frees our team up for more complex or nuanced customer interactions.

Rochelle: When Tin Man autonomously handles certain tasks and interactions, it frees our team up for more complex or nuanced customer interactions. In the second quarter, we also saw certain one-time non-recurring expense benefits, including reductions in certain reserves and a state tax refund. Aggregate one-time benefits amounts to approximately $1 million of contract expenses in the second quarter.

Rochelle: In the second quarter, we also saw certain one-time, non-recurring expense benefits, including reductions in certain reserves and a state tax refund. Aggregate one-time benefits amounts to approximately $1 million of contract expenses in the second quarter.

Speaker Change: In the second quarter, we also saw certain one-time non-recurring expense benefits, including reductions in certain reserves and a state tax refund.

Vishal Garg: To recap, in the second quarter of 2024, our revenue increased by approximately 41 percent quarter over quarter, while total expenses were approximately flat, demonstrating substantial operating leverage in the business. Finishing with our third priority of growing our B2B Mortgage as a Service distribution Channel, we continuously demand our technology and origination capabilities from new partners with strong brands who are looking to offer mortgages to their customers in a cost-efficient way. We also continue to nurture our existing pipeline and are currently working on multiple B2B pilot programs, one example being an early stage partnership with a large national roofing and basement contractor.

Rochelle: To recap, in the second quarter of 2024, our revenue increased by approximately 41% quarter over a quarter, while total expenses were approximately flat, demonstrating substantial operating leverage in the business. Finishing with our third priority of growing our B2B mortgage as a service distribution channel, we continue to demand for our technology and origination capabilities from new partners with strong brands who are looking to offer mortgages to their customers in a cost-efficient way. We also continue to nurture our existing pipeline and are currently working on multiple B2B pilot programs, one example being an early-stage partnership with a large national roofing and basement contractor.

Speaker Change: aggregateat one time befits amount to approximately one miondollars of contract expenses in the second quarterto recap in the second quarter of two thousand andtwentyfour our venue increased by approximately forty one percent quarter over quarter while total expenses were approximately flat demonstrating substantial operating leverage in the business

Speaker Change: finishing with our third priority of growingour b to v mortg of the service distribution channel we continue see demand for our technology origination capabilities from new partners with strong brands who are looking to offer mortgages to their customers in the costefficient way

Speaker Change: We also continue to nurture our existing pipeline and are currently working on multiple B2B pilot programs. One example being an early stage partnership with a large national roofing and basement contractor.

Rochelle: We also continue to nurture our existing pipeline and are currently working on multiple B2B pilot programs, one example being an early-stage partnership with a large national roofing and basement contractor. While early in the pilot, we are excited about programs like this because they can empower homeowners to protect and invest in their homes and finance these projects through their existing home equity with our one-day heal-up products. We believe our partnership pipeline demonstrates strong product market fit for our B2B offerings and demand for our technology from firms with existing brands and relationships with customers.

Rochelle: While early in the pilot, we are excited about programs like this because they can empower homeowners to protect and invest in their homes and finance these projects through their existing home equity with our one-day heal-up products. We believe our partnership pipeline demonstrates strong product market fit for our B2B offerings and demand for our technology from firms with existing brands and relationships with customers. We are, however, in a position at the mid-year mark to see that the most material prospective partnerships from a funded loan-volving perspective have multi-year enterprise sales of the integration cycle. As a result, we expect most of our growth in 2024 year being driven by the DDC channel.

Vishal Garg: While early in the pilot, we are excited about programs like this because they can empower homeowners to protect and invest in their homes and finance these projects using their existing home equity with our one day HeLa product.

Speaker Change: While early in the pilot, we are excited about programs like this because they can empower homeowners to protect and invest in their homes and finance these projects through their existing home equity with our one-day HELOC products.

Hana: We believe our partnership pipeline demonstrates strong product market fit for our B2B offerings and demand for our technology from firms with existing brands and relationships with customers. We expect to manage costs through a highly variable sales compensation model and continued automation that drives down non-customer-facing costs, as well as reductions to corporate overhead costs. In addition, we are testing the addition of more traditional brand advertising to our DTC acquisition channels. This quarter, we became an official partner of the Premier Lacrosse League. To expand the breadth of our customers, we are raising awareness of the better brand.

Vishal Garg: We believe our partnership pipeline demonstrates strong product market fit for our B2B offerings and demand for our technology from firms with existing brands and relationships with customers. We are, however, in a position at the mid-year mark to see that the most material prospective partnerships from a funded loan volume perspective have multi-year enterprise sales and integration cycles. As a result, we expect most of our growth in 2024 to be driven by the DDC channel.

Speaker Change: we believe our partnership pipeline demonstrates strong product marketf forour vb offering and demand for our technology from firms with existing brands and relationships with customers

Speaker Change: We are, however, in a position at the mid-year mark to see that the most material prospective partnerships from a funded loan volume perspective have multi-year enterprise sales and integration cycles. As a result, we expect most of our growth in 2024 year being driven by the DDC channel.

Rochelle: We are, however, in a position at the mid-year mark to see that the most material prospective partnerships from a funded loan-volving perspective have multi-year enterprise sales of the integration cycle. As a result, we expect most of our growth in 2024 year being driven by the DDC channel.

Rochelle: Looking beyond 2024, the medium-term opportunity for better remains very exciting. We are focused on first enhancing our go-to-market with growth being our north star, and second continued to invest in automation and AI through the cycle. In terms of go-to-market, our experienced commission-based loan officers are working to drive improved customer conversion in a cost-efficient manner, specifically converting website visitors to funded customers, particularly on the purchase side. We are seeing that industry veteran loan officers who come on our platform are able to drive higher fundings per month while maintaining the same level of service and engagement with their customers because of the end-to-end proprietary technology we have built.

Vishal Garg: Looking beyond 2024, the medium-term opportunity for better remains very exciting. We are focused on, first, enhancing our go-to-markets, with growth being our north star, and second, continuing to invest in automation and AI through the cycle. In terms of going to market, our experienced commission-based loan officers are working to drive improved customer conversion in a cost-efficient manner, specifically converting website visitors to funded customers, particularly on the purchase side. We are seeing that industry veteran loan officers who come on our platform are able to drive higher fundings per month while maintaining the same level of service and engagement with their customers because of the end-to-end proprietary technology we have built.

Speaker Change: Looking beyond 2024, the medium-term opportunity for better remains very exciting. We are focused on, first, enhancing our go-to-markets, with growth being our North Star, and second, continuing to invest in automation and AI through the cycle.

Rochelle: Looking beyond 2024, the medium-term opportunity for better remains very exciting. We are focused on first enhancing our go-to-market with growth being our north star and second continued to invest in automation and AI through the cycle. In terms of go-to-market, our experienced commission-based loan officers are working to drive improved customer conversion in a cost-efficient manner, specifically converting website visitors to funded customers, particularly on the purchase side. We are seeing that industry veteran loan officers who come on our platform are able to drive higher fundings per month while maintaining the same level of service and engagement with their customers because of the end-to-end proprietary technology we have built.

Speaker Change: in terms of go-to-market our experienced commission based loan officers are working to drive improved customer conversion in a cost-efficient matner

Speaker Change: specifically converting website visitors to funded customers, particularly on the purchase side. We are seeing that industry veteran loan officers who come on our platform are able to drive higher fundings per month while maintaining the same level of service and engagement with their customers because of the end-to-end proprietary technology we have built.

Rochelle: We expect to manage costs through a highly variable sales compensation model and continued automation that drives down non-customer-facing costs, as well as reductions to corporate overhead costs. Further, we are testing the addition of more traditional brand advertising to our DDC acquisition channels. This quarter we became an official partner of the Premier Lacrosse League to expand the breadth of customers we are reaching and awareness of the better brand. We continue to invest in Tim Man, our proprietary technology platform, to improve the customer experience and further drive down the labor costs, making our platform more efficient and scalable and enabling us to provide our customers with lower rates, higher rules, and certainty earlier in the mortgage process.

Vishal Garg: We expect to manage costs through a highly variable sales compensation model and continued automation that drives down non-customer-facing costs, as well as reductions to corporate overhead costs. Furthermore, we are testing the addition of more traditional brand advertising to our DTC acquisition channels. This quarter, we became an official partner of the Premier Lacrosse League.

Speaker Change: We expect to manage costs through a highly variable sales compensation model and continued automation that drives down non-customer facing costs, as well as reductions to corporate overhead costs.

Rochelle: We expect to manage costs through a highly variable sales compensation model and continued automation that drives down non-customer-facing costs, as well as reductions to corporate overhead costs. Further, we are testing the addition of more traditional brand advertising to our DDC acquisition channels. This quarter we became an official partner of the Premier Lacroix League to expand the breadth of customers we are reaching and awareness of the better brand. We continue to invest in Tim Man, our proprietary technology platform to improve the customer experience and further drive down the labor costs, making our platform more efficient and scalable and enabling us to provide our customers with lower rates, higher rules and certainty earlier in the mortgage process. Tim Man powers our highly differentiated competitive advantage and drives our better faster and cheaper customer experience.

Speaker Change: Further, we are testing the addition of more traditional brand advertising to our DTC acquisition channels. This quarter, we became an official partner of the Premier Lacrosse League. To expand the breadth of our customers, we are reaching an awareness of the better brand.

Vishal Garg: To expand the breadth of our customers, we are increasing awareness of the Bankers brand. We continue to invest in TinMan, our proprietary technology platform, to improve the customer experience and further drive down labor costs, making our platform more efficient and scalable and enabling us to provide our customers with lower rates, higher approvals, and certainty earlier in the mortgage process. TinMan powers our highly differentiated competitive advantage and drives our better, faster, and cheaper customer experience.

Speaker Change: We continue to invest in TinMan, our proprietary technology platform to improve the customer experience and further drive down labor costs, making our platform more efficient and scalable and enabling us to provide our customers with lower rates, higher approvals and certainty earlier in the mortgage process.

Rochelle: Tim Man powers our highly differentiated competitive advantage and drives our better, faster, and cheaper customer experience. In summary, we continue to have a large and attractive market opportunity.

Speaker Change: ten menpowers are highly differentiated competit advantage and drives are better faster and cheaper customer experience

Vishal Garg: In summary, we continue to have a large and attractive market opportunity. We are excited to continue our growth direction in the second half of 2024 and excited about the market dynamics we are seeing thus far in Q3. With that, let me now turn it over to Kevin Ryan, our Chief Financial Officer, who will discuss the quarterly performance and our financial strategy.

Rochelle: We are excited to continue our growth direction in the second half of 2024 and excited about the market dynamics we are seeing thus far in Q3.

Rochelle: In summary, we continue to have a large and attractive market opportunity. We are excited to continue our growth direction in the second half of 2024 and excited about the market dynamics we are seeing thus far in Q3.

Speaker Change: in summary we continue to have a large andattractivemarket opportunity we are excited to continue our growth direction in the second half of two andtwenty four and excited about the market dynamics we are seeing that's far in q three

Kevin Ryan: With that, let me now turn it over to Kevin Ryan, our Chief Financial Officer. We'll discuss the quarterly performance and our financial strategy.

Kevin Ryan: With that, let me now turn it over to Kevin Ryan, our Chief Financial Officer, who will discuss the quarterly performance and our financial strategy. Kevin?

Kevin Ryan: With that, let me now turn it over to Kevin Ryan, our Chief Financial Officer. We'll discuss the quarterly performance and our financial strategy. Kevin? Thank you, Rochelle. As Hannah mentioned, it's the start of the call.

Kevin Ryan: Thank you, Vishal. As Hannah mentioned at the start of the call, we have not yet completed our second quarter 10Q, and the numbers discussed in this call represent a preliminary estimate and may be revised upon the filing of the 10Q with the SEC. As Vishal discussed, we are excited to report that Better is growing while continuing to be laser-focused on maximizing operating efficiency. While we expect improvement in the mortgage market in the medium to long term, this will likely take time.

Kevin Ryan: Kevin? Thank you, Rochelle. As Hannah mentioned, it's the start of the call.

Kevin Ryan: We have not yet completed a second quarter; thank you, and the numbers discussed in this call represent a preliminary estimate and may be revised upon the filing of the 10-Q with the SEC. As we all discuss, we are excited to report that Better is growing while continuing to be laser focused on maximizing operating efficiency. While we expect improvement in a mortgage market in the medium to long term, this will likely take time. To that end, we continue to thoughtfully lean into certain growth expenses, including marketing spend and production headcounts, to drive increased volume as well as increase origination capacity in advance of expected near-term demand, which will be balanced by continued cost discipline to target reaching profitability in the medium term.

Kevin Ryan: Thank you, Vishal. As Hannah mentioned at the start of the call, we have not yet completed our second quarter 10-Q, and the numbers discussed in this call represent a preliminary estimate and may be revised upon the filing of the 10-Q with the SEC.

Kevin Ryan: We have not yet completed a second quarter, thank you, and the numbers discussed in this call represent a preliminary estimate and may be revised upon the filing of the 10Q with the SEC. As we all discuss, we are excited to report that better is growing while continuing to be laser focused on maximizing operating efficiency. While we expect improvement in a mortgage market in the medium to long term, this will likely take time.

Kevin Ryan: As Vishal discussed, we are excited to report that Better is growing, while continuing to be laser focused on maximizing operating efficiency.

Speaker Change: While we expect improvement in the mortgage market in the medium to long term, this will likely take time.

Kevin Ryan: To that end, we continue to thoughtfully lean into certain growth expenses, including marketing spend and production headcount, to drive increased volume as well as increased origination capacity in advance of expected near-term demand, which will be balanced by continued cost discipline to target reaching profitability in the medium term. I'll turn now to the financial results of the second quarter. During the second quarter of 2024, we generated a funded loan volume of approximately $962 million.

Speaker Change: To that end, we continue to thoughtfully lean into certain growth expenses, including marketing spend and production headcounts, to drive increased volume as well as increased origination capacity in advance of expected near-term demand.

Kevin Ryan: To that end, we continue to thoughtfully lean into certain growth expenses, including marketing spend and production headcounts, to drive increased volume as well as increase origination capacity in advance of expected near-term demand, which will be balanced by continued cost discipline to target reaching profitability in the medium term.

Hana: which will be balanced by continued cost discipline to target reaching profitability in the medium term. Total gap net loss for the second quarter was approximately $42 million, an improvement of approximately $9 million compared to the first quarter. Total expenses of $73 million in Q2 2024 were approximately flat compared to $74 million in the first quarter. Our second quarter funded loan volume was 70% generated through our direct-to-consumer channel and 30% generated through our B2B channel.

Kevin Ryan: which will be balanced by continued cost discipline to target reaching profitability in the medium term.

Kevin Ryan: This compares to prior guidance for the quarter of above $800 million, revenue of approximately $31 million, and an adjusted EBITDA loss of approximately $25 million, which represents an improvement of approximately $6 million in our adjusted EBITDA loss compared to the first quarter of 2024. Total gap net loss for the second quarter was approximately $42 million, an improvement of approximately $9 million compared to the first quarter.

Kevin Ryan: I'll turn now to the financial results of the second quarter. During the second quarter of 2024, we generated funded loan volume of approximately $962 million. This compares to our prior guidance of the quarter of above $800 million. Revenue of approximately $31 million and an adjusted EBITDA loss of approximately $25 million, which represents an improvement of approximately $6 million in our adjusted EBITDA loss compared to the first quarter of 2024. Total gap net loss for the second quarter was approximately $42 million, an improvement of approximately $9 million compared to the first quarter. Total expenses of $73 million in Q2 2024 was approximately flat compared to $74 million in the first quarter.

Speaker Change: I'll turn now to the financial results of the second quarter.

Kevin Ryan: I'll turn now to the financial results of the second quarter. During the second quarter of 2024, we generated funded loan volume of approximately $962 million. This compares to our prior guidance of the quarter of above $800 million. Revenue of approximately $31 million and an adjusted EBITDA loss of approximately $25 million, which represents an improvement of approximately $6 million in our adjusted EBITDA loss compared to the first quarter of 2024. Total gap net loss for the second quarter was approximately $42 million in improvement of approximately $9 million compared to the first quarter.

Speaker Change: During the second quarter of 2024, we generated funded loan volume of approximately 962 million dollars. This compares to a prior guidance for the quarter of above 800 million.

Speaker Change: Revenue of approximately 31M and an adjusted EBITDA loss of approximately 25M, which represents an improvement of approximately 6M in our adjusted EBITDA loss compared to the first quarter of 2024.

Speaker Change: Total GAAP net loss for the second quarter was approximately $42 million, an improvement of approximately $9 million compared to the first quarter.

Kevin Ryan: Total expenses of $73 million in Q2 2024 were approximately flat compared to $74 million in the first quarter. Our second quarter funded loan volume was 70% generated through our direct-to-consumer channel and 30% generated through our B2B channel. It was 83% purchase, 8% refinance, and the remainder of dollar volume was home equity, including home equity lines of credit and closed-end second lien loans.

Speaker Change: total expenses of seventy-three million dollars in q two two thousand and twenty four was approximately flat compared to seventy four million in the first quarter our second quarterof funded loan volume was seventy percent generated through our direct to consumer channel and thirty percent generated to our b to b channel

Kevin Ryan: Total expenses of $73 million in Q2, 2024 was approximately flat compared to $74 million in the first quarter. Our second quarter funded loan volume was 70% generated through our direct consumer channel and 30% generated through our B2B channel. It was 83% purchase, 8% refinance, and the remainder of dollar volume was home equity, including home equity lines of credit and closed-end second-line loans. Now, to test briefly on our balance sheet and capital positioning, we ended the second quarter of 2024 with approximately $507 million of cash, restricted cash, short-term investments in self-funded loans.

Kevin Ryan: Our second quarter funded loan volume was 70% generated through our direct consumer channel and 30% generated through our B2B channel. It was 83% purchase, 8% refinance, and the remainder of dollar volume was home equity, including home equity lines of credit and closed-end second-line loans.

Hana: It was 83% purchase, 8% refinance, and the remainder of dollar volume was home equity, including home equity lines of credit and closed-end second lien loans. Turning now to our second half of 2024 Outlook, we continue to expect funded loan volume to increase in 2024 as compared with 2023 as we prudently increase customer acquisition spend in the highest returning channels and increase origination capacity through hiring and loan production roles.

Speaker Change: 83% purchase, 8% refinance, and the remainder of dollar volume is home equity, including home equity lines of credit and closed-end second lien loans.

Kevin Ryan: Now, to test briefly on our balance sheet and capital positioning, we ended the second quarter of 2024 with approximately $507 million of cash, restricted cash, and short-term investments in self-funded loans. Self-funded loans is defined by our loans help for sale less of warehouse lines of credit. We believe that adding self-funded loans is relevant when looking at our liquidity as we are making a conscious decision to hold these high-quality cash-low-generating assets on an interim basis between funding and sale up to secondary pass. We are well capitalized for growth as our cash position provides us with liquidity to continue executing against our vision and corporate objectives.

Kevin Ryan: Now, to touch briefly on our balance sheet and capital positioning. We ended the second quarter of 2024 with approximately $507 million of cash, restricted cash, short-term investments, and self-funded loans. Self-funded loans are defined by our loans held for sale less warehouse lines of credit. We believe that adding self-funded loans is relevant when looking at our liquidity as we are making a conscious decision to hold these high-quality cash flow generating assets on an interim basis between funding and sale to secondary investors, similar to other short-term investments.

Speaker Change: Now, to touch briefly on our balance sheet and capital positioning, we ended the second quarter of 2024 with approximately $507 million of cash, restricted cash, short-term investments, and self-funded loans.

Kevin Ryan: Self-funded loans is defined by our loans help for sale less of warehouse lines of credit. We believe that adding self-funded loans is relevant when looking at our liquidity as we are making a conscious decision to hold these high-quality cash-low-generating assets on an interim basis between funding and sale up to secondary pass. We are well capitalized for growth as our cast position provides us with liquidity to continue executing against our vision and corporate objectives. We retain strong relationships with our finance and counterparties and manage mortgage working capital, even in this lower volume environment. As of June 30, 2024, we had three warehouse facilities for total capacity of $425 million dollars.

Speaker Change: so fon loans is defined by our loans he for sale left a warehouselines credit

Speaker Change: we believe that adding self-funded loans is relevant and looking at our liquidity as we are making a conscious decision to hold these high-quality cash flow generating assets on an interim basis between funding and sal out to secondary investors

Kevin Ryan: We are well-capitalized for growth as our cash position provides us with liquidity to continue executing against our vision and corporate objectives. We retain strong relationships with our financing counterparties to manage mortgage working capital, even in this lower volume environment. As of June 30th, 2024, we had 3 warehouse facilities for a total capacity of $425 million.

Speaker Change: similar to other short-term investments. We are well capitalized for growth as our cash position provides us with liquidity to continue executing against our vision and corporate objectives.

Kevin Ryan: We retain strong relationships with our finance and counterparties and manage mortgage working capital, even in this lower volume environment.

Speaker Change: We retain strong relationships with our financing counterparties to manage mortgage working capital, even in this lower volume environment. As of June 30th, 2024, we had 3 warehouse facilities for total capacity of $425 million.

Kevin Ryan: As of June 30, 2024, we had three warehouse facilities for a total capacity of $425 million dollars.

Kevin Ryan: Additionally, we are effectuating a reverse stock split of Better's common stock at a ratio of one post-split share for every 50 pre-split shares. Their verse split was approved by Better Stockholders at our annual meeting on June 4, 2024, and the one for 50 reverse stock split ratio was approved by the company's board of directors on all this first, 2024. Their verse stock split intended to increase the per share trading price of the company's Class A common stock to enable the company to regain compliance with the minimum bid price requirement for continued listing on the NASDAQ Capital Market.

Kevin Ryan: Additionally, we are effectuating a reverse stock split of our common stock at a ratio of one post split share for every 50 pre split shares. The reverse split was approved by our stockholders at our annual meeting on June 4th, 2024, and the 1 for 50 reverse stock split ratio was approved by the company's board of directors on August 1st, 2024. The reverse stock split is intended to increase the per share trading price of the company's Class A common stock to enable the company to regain compliance with the minimum bid price requirement for continued listing on the NASDAQ capital market.

Speaker Change: Additionally, we are effectuating a reverse stock split of betters common stock at a ratio of one post split share for every 50 pre split shares. The reverse split was approved by better stockholders at our annual meeting on June 4th, 2024.

Kevin Ryan: Additionally, we are effectuating a reverse stock split of Better's Common Stock at a ratio of one post split share for every 50 pre-slit shares. Their verse split was approved by Better Stockholders at our annual meeting on June 4, 2024, and the one for 50 reverse stock split ratio was approved by the company's board of directors on all this first, 2024. Their verse stock split intended to increase the per share trading price of the company's class A common stock to enable the company to regain compliance with the minimum bid price requirement for continued listing on the NASDAQ capital market. We expect the reverse stock split to be completed shortly within the time required to regain NASDAQ compliance.

Speaker Change: And the 1 for 50 reverse box split ratio is approved by the company's Board of Directors on August 1st, 2024.

Speaker Change: their first stockswith intended to increase the persishare trading place of the company's class a common stock to enable the company to regain compliance with the minimum bid price requirement for continued listening on the nasa capital market

Kevin Ryan: We expect the reverse stock split to be completed shortly, within the time required to regain NASDAQ compliance. Turning now to our second half of 2024 Outlook, we continue to expect funded loan volume to increase in 2024 as compared with 2023 as we prudently increase customer acquisition spend in the highest returning channels and increase origination capacity through hiring and loan production roles. For the third quarter of 2024, we expect to generate a funded loan volume of at least $1 billion, which represents continued quarter-over-quarter funded loan growth for the third consecutive quarter.

Kevin Ryan: We expect the reverse stock split to be completed shortly, within the time required to regain NASDAQ compliance.

Speaker Change: We expect the reverse stock split to be completed shortly within the time required to regain NASDAQ compliance.

Kevin Ryan: Turning now to our second half of 2024 outlook. We continue to expect funded loan volume to increase in 2024 as compared with 2023. As we prudently increase customer acquisition spend in the highest returning channels and increase origination capacity to hiring and loan production roles. So the third quarter of 2024, we expect to generate a funded loan volume of at least $1 billion, which represents continued quarter-over-quarter funded loan growth for the third quarter in a row. We continue to have a keen focus on cost management, including the continued reduction of corporate overhead expenses, vendor cost, and other costs due to further automation and critical review of our existing contracts.

Speaker Change: Turning now to our second half of 2024 Outlook, we continue to expect funded loan volume to increase in 2024 as compared with 2023.

Speaker Change: As we prudently increase customer acquisition spend in the highest returning channels and increase origination capacity through hiring and loan production roles.

Speaker Change: for the third quarter of two thousand and twentyfour we expect to generate a funded loan volume of at least one billion dollars which represents continued quarter-over-quarter funded loan growth in the third quarter in a rup

Kevin Ryan: We continue to have a keen focus on cost management, including the continued reduction of corporate overhead expenses, vendor costs, and other costs due to further automation and critical review of our existing contracts. As a result of increased growth expenses offset by continued expense reductions, we expect total expenses to be approximately flat in 2024, as compared with 2023. Lastly, we expect customer conversion to improve with continued investment in Tin Man, increasingly variable sales compensation plans, improved sales technology, and purchase product offerings. With that, I'll now turn it back to the operator for Q&A.

Speaker Change: We continue to have a keen focus on cost management, including the continued reduction of corporate overhead expenses, vendor costs, and other costs due to further automation and critical review of our existing contracts as a result of increased growth expenses offset by continued expense reductions.

Kevin Ryan: We continue to have a keen focus on cost management, including the continued reduction of corporate overhead expenses, vendor cost and other cost due to further automation and critical review of our existing contracts. As a result of increased growth expenses offset by continued expense reductions, we expect total expenses to be approximately flat in 2024 as compared with 2023. Lastly, we expect customer conversion to improve with continued investment in 10 man, increasingly variable sales compensation plans, improved sales technology and purchase product offerings.

Kevin Ryan: As a result of increased growth expenses offset by continued expense reductions, we expect total expenses to be approximately flat in 2024 as compared with 2023. Lastly, we expect customer conversion to improve with continued investment in 10 man, increasingly variable sales compensation plans, improved sales technology, and purchase product offerings.

Operator: With that, I'll now turn it back to the operator for Q&A. Thank you. The floor is now open for questions. If you have held in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join a queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, press star one to join the queue.

Operator: Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the call. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, press star 1 to join the queue. Your first question comes from the line of Raina Kumar with Oppenheimer. Please go ahead.

Operator: If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the call. Your first question comes from the line of Raina Kumar with Oppenheimer. Please go ahead.

Reina Kumar: Your first question comes from the line of Reina Kumar with Up and Heimer, please go ahead. Good morning. Thanks for taking my question. In regards to the AI initiatives, could you give some more specifics around the AI investments that you're making and the types of operational efficiency that they could drive? And maybe talk a little bit about the metrics the AI could impact and how does your strategy compare to that as...

Reina Kumar: Your first question comes from the line of Reina Kumar with Up and Heimer, please go ahead. Good morning. Thanks for taking my question.

Raina Kumar: Good morning, thanks for taking my question. In regards to the AI initiatives, could you give some more specifics around the AI investment that you're making and the types of operational efficiency that they could drive? And maybe talk a little bit about the metrics that AI could impact and how your strategy compares to that of peers?

Vishal Garg: Good morning. Thanks for taking my question. In regards to the AI initiatives, could you give some more specifics around the AI investment that you're making and the types of operational efficiency that they could drive? And maybe talk a little bit about the metrics that AI could impact and how your strategy compares to that of peers?

Speaker Change: Initiatives could you give some more specifics around the AI investment that you're making in the types of operational efficiency that they can drive and maybe talk a little bit about <unk>.

Unnamed Speaker: In regards to the AI initiatives, could you give some more specifics around the AI investments that you're making and the types of operational efficiency that they could drive? And maybe talk a little bit about the metrics the AI could impact and how does your strategy compare to that as... Here. Sure, that's a great question.

Speaker Change: Okay and popcorn.

Speaker Change: How does your size you can pick Obama peers.

Unnamed Speaker: Here. Sure, that's a great question. I think there's three main areas in our operations that the AI initiatives are going to impact. The first is in terms of sales and customer support. So there are operating costs for sales and customer support are amongst the lowest in the industry in terms of sales expense for fund. However, that's still a pretty significant portion of our total cost of making a loan. Approximately 25% of the cost of making to 30% of making a loan goes to sales and sales support. We've been testing voice agents that are autonomous that are now actively in the field that are gathering customer information, transcribing that customer information, writing it into our database, and automatically generating pre-approvals for our customers based on the missing data that has been collected.

Vishal Garg: Sure, that's a great question. I think there are three main areas in our operations that the AI initiatives are going to impact. The first is in terms of sales and customer support. So there, our operating costs for, you know, sales and customer support are amongst the lowest in the industry in terms of sales expenses for funds. However, that's still a pretty significant portion of our total cost of making a loan. Approximately 25% of the cost of making up to 30% of making a loan goes to sales and sales support.

Speaker Change: Sure. That's a great question I think there are three main areas in our operations.

Speaker Change: The AI initiatives are going to impact the first is in terms of sales and customer support.

Unnamed Speaker: I think there's three main areas in our operations that the AI initiatives are going to impact. The first is in terms of sales and customer support. So there are operating costs for sales and customer support are amongst the lowest in the industry in terms of sales expense for fund. However, that's still a pretty significant portion of our total cost of making a loan. Approximately 25% of the cost of making to 30% of making a loan goes to sales and sales support.

Speaker Change: There are operating costs or <unk>.

Speaker Change: Sales and customer support are amongst the lowest in the industry in terms of sales expense per fund.

Hana: However, that's still a pretty significant portion of our total cost of making a loan. Approximately 25% of the cost of making up to 30% of making a loan goes to sales and sales support.

Speaker Change: However, that's still a pretty significant portion of our total cost of making alone approach.

Speaker Change: Approximately 25% of the cost of making it to 30% of making alone goes to sales and sales support we've been testing voice agents that are autonomous.

Hana: We've been testing voice agents that are autonomous that are now actively in the field gathering customer information, transcribing that customer information, writing it into our database, and automatically generating pre-approvals for our customers based on the missing data that has been collected. That is a task that was previously done by humans and required a significant labor force for us to go out and do that. It's also enabled us to touch our customers much faster than we would on a usual basis.

Vishal Garg: We've been testing voice agents that are autonomous that are now actively in the field gathering customer information, transcribing that customer information, writing it into our database, and automatically generating pre-approvals for our customers based on the missing data that has been collected. That is a task that was previously done by humans and required a significant labor force for us to go out and do that. It's also enabled us to touch our customers much faster than we would on a usual basis.

Speaker Change: Are now actively in the field that are.

Unnamed Speaker: We've been testing voice agents that are autonomous that are now actively in the field that are gathering customer information, transcribing that customer information, writing it into our database and automatically generating pre-approvals for our customers based on the missing data that has been collected. That is a task that was previously done by humans and required a significant labor force for us to go and do that. It's also enabled us to touch our customers much faster than we would on a usual basis.

Speaker Change: Gathering customer information transcribing that customer information.

Speaker Change: Writing it into our database and automatically generating pre approvals for our customers based on the missing data that has been collected.

Unnamed Speaker: That is a task that was previously done by humans and required a significant labor force for us to go and do that. It's also enabled us to touch our customers much faster than we would on a usual basis. So rather than having a response time measured in minutes or hours, we are now able to respond back to customer queries in seconds and milliseconds. That level of speed is just something that is unmatched with what you can do in a traditional mortgage call center setting.

Speaker Change: That is a task that was previously done by humans and required a significant labor force for us.

Speaker Change: Go and do that it's also enabled us to touch our customers much faster than we would on unusual basis, so rather than having a response time measured in minutes or hours. We are now able to respond back to customer queries in seconds and milliseconds and that level of speed. It's just something that is unmatched.

Unnamed Speaker: So rather than having a response time measured in minutes or hours, we are now able to respond back to customer queries in seconds and milliseconds. That level of speed is just something that is unmatched with what you can do in a traditional mortgage call center setting.

Hana: So rather than having a response time measured in minutes or hours, we are now able to respond back to customer queries in seconds and milliseconds. That level of speed is just something that is unmatched by what you can do in a traditional mortgage call center setting. Another area where we are seeing dramatic improvement in processing and processing turn times. We've already always had a one-day mortgage since 2023, but we've gotten even faster with that by using generative AI in document classification and data extraction from document classification. So traditional methods of OCR for document data extraction really require the computer to already know and have a template of the document that's being OCR'd.

Vishal Garg: So rather than having a response time measured in minutes or hours, we are now able to respond back to customer queries in seconds and milliseconds. That level of speed is just something that is unmatched by what you can do in a traditional mortgage call center setting. Another area where we are seeing dramatic improvement in processing and processing turn times. We've already always had a one-day mortgage since 2023, but we've gotten even faster with that by using generative AI in document classification and data extraction from document classification. So traditional methods of OCR for document data extraction really require the computer to already know and have a template of the document that's being OCR'd.

Speaker Change: <unk>.

Speaker Change: What you can do in a traditional mortgage call center setting.

Unnamed Speaker: Another area where we are seeing dramatic improvement in processing and processing turn times. We've already always had the one-day mortgage since 2023, but we've gotten even faster with that using generative AI in document classification and data extraction from document classification. So traditional methods of OCR for document data extraction really require the computer to already know and have a template of the documents that's being OCR. With generative AI, we are now able to have the machine automatically determine what document is being uploaded and use an example of a previous document, like that document, let's say if it's a homeowner's association statement or a tax return or a home purchase contract, and automatically extract the data that is required, so that it dramatically lowers the amount of process or time, and we're using that to not only just do the basic documents of the mortgage process, but all the hundreds of trailing documents in the mortgage process and take the data extraction process and bring that down dramatically, both in terms of speed and in terms of efficiency.

Speaker Change: Another area, where we are seeing dramatic improvements in processing and processing turn times, we've already always had one day mortgage since 2023.

Unnamed Speaker: Another area where we are seeing dramatic improvement in processing and processing turn times, we've already always had the one-day mortgage since 2023, but we've gotten even faster with that using generative AI in document classification and data extraction from document classification. So traditional methods of OCR for document data extraction really require the computer to already know and have a template of the documents that's being OCR. With generative AI, we are now able to have the machine automatically determine what document is being uploaded and use an example of a previous document, like that document, let's say if it's a homeowner's association statement or a tax return or a home purchase contract and automatically extract the data that is required, so that it dramatically lowers the amount of process or time, and we're using that to not only just do the basic documents of the mortgage process, but all the hundreds of trailing documents in the mortgage process and take the data extraction process and bring that down dramatically, both in terms of speed and in terms of efficiency.

Speaker Change: Got an even faster with that with using generative AI and document classification and data extraction from document classification, so traditional methods.

Speaker Change: OCR for document.

Speaker Change: Data extraction.

Speaker Change: Really require the computer to already know and have a template of the document that's being OCR regenerative AI. We are now able to have the machine automatically determine what document is being uploaded and use an example of a previous document.

Hana: With generative AI, we are now able to have the machine automatically determine what document is being uploaded and use an example of a previous document like that document, let's say if it's a homeowner's association statement or a tax return or a home purchase contract and automatically extract the data that is required so that it dramatically lowers the amount of processor time. And we're using that to not only just do the basic documents of the mortgage process but all the hundreds of trailing documents in the mortgage process, and we take the data extraction process and bring that down dramatically, both in terms of speed and in terms of efficiency.

Vishal Garg: With generative AI, we are now able to have the machine automatically determine what document is being uploaded and use an example of a previous document like that document, let's say if it's a homeowner's association statement or a tax return or a home purchase contract and automatically extract the data that is required so that it dramatically lowers the amount of processor time. And we're using that to not only just do the basic documents of the mortgage process but all the hundreds of trailing documents in the mortgage process, and we take the data extraction process and bring that down dramatically, both in terms of speed and in terms of efficiency.

Speaker Change: That document lets say if its a homeowners association statement or a tax return or a.

Speaker Change: Home purchase contract and automatically extract the data that is required so that it dramatically lowers the amount of process, our time and we're using that to not only just do the basic documents of the mortgage process, but all the hundreds of trailing documents and the mortgage process and take the data extraction process and bring that down dramatically.

Speaker Change: Both in terms of speed and in terms of.

Speaker Change: Efficiency.

Vishal Garg: The last is on the underwriting side. We have now introduced our automated initial underwriting, where traditionally that is a process that would take weeks and a traditional underwriter to do. Over, you know, and we are seeing dramatic progress in expanding the percentage of our customers who are effectively getting a commitment letter from us almost instantly post-locking a loan. And we expect that metric to continue to go up. Of course, that is going to result in labor cost savings. We think that these investments, in total, will enable us to lower our total cost of manufacturing alone by over 50% over the coming years.

Unnamed Speaker: The last is on the underwriting side. We have now introduced our automated initial underwriting, where traditionally that is a process that would take weeks and a traditional underwriter to do. And we are seeing dramatic progress in expanding the percentage of our customers who are effectively getting a commitment letter from us almost instantly post-locking alone. And we expect that metric to continue to go up. Of course, that is going to result in labor cost savings. We think that these investments in total will enable us to lower our total cost of manufacturing alone by over 50% over the coming years.

Hana: We have now introduced our automated initial underwriting, where traditionally that is a process that would take weeks and a traditional underwriter to do. And we are seeing dramatic progress in expanding the percentage of our customers who are effectively getting a commitment letter from us almost instantly post-locking a loan. And we expect that metric to continue to go up. And, of course, that is going to result in labor cost savings. We think that these investments, in total, will enable us to lower our total cost of manufacturing alone by over 50% over the coming years.

Speaker Change: Last is on the underwriting side.

Speaker Change: We have now introduced our automated initial underwriting.

Unnamed Speaker: The last is on the underwriting side. We have now introduced our automated initial underwriting where traditionally that is a process that would take weeks and a traditional underwriter to do. And we are seeing dramatic progress in expanding the percentage of our customers who are effectively getting a commitment letter from us almost instantly post-locking alone. And we expect that metric to continue to go up. Of course, that is going to result in labor cost savings.

Speaker Change: Where traditionally that is a process that would take weeks and a traditional underwriter to do.

Speaker Change: And we are seeing dramatic progress in expanding the percentage of our customers who are effectively getting a commitment letter from us almost instantly post locking alone and we expect that metric to continue to go up of course that is going to result in labor cost savings, we think that these investments in total well.

Speaker Change: Enable us.

Speaker Change: To lower our total cost of manufacturing alone by over 50% over the coming years, and we think that we are leaning into technology and AI since the founding of this company. So in 2014, we set out to build a autonomous rules engine that would match consumer data and property data too.

Unnamed Speaker: We think that these investments in total will enable us to lower our total cost of manufacturing alone by over 50% over the coming years.

Unnamed Speaker: And we think that we have been leaning into technology and AI since the founding of this company. So in 2014, we set out to build an autonomous rules engine that would match consumer data and property data to investor preferences and criteria. And we use machine learning to do that. With the advances in generative AI, we believe that there is a second chapter in Better's history that is being written today, which will enable us to drive the cost of loan production and the speed at which we're able to process in a way that none of our competitors will be able to match.

Hana: And we think that we have been leaning into technology and AI since the founding of this company. So, in 2014, we set out to build an autonomous rules engine that would match consumer data and property data to investor preferences and criteria. And we use machine learning to do that. With the advances in generative AI, we believe that there is a second chapter in betters history that is being written today, which will enable us to drive the cost of loan production and the speed at which we're able to process in a way that none of our competitors will be able to match.

Vishal Garg: And we think that we have been leaning into technology and AI since the founding of this company. So, in 2014, we set out to build an autonomous rules engine that would match consumer data and property data to investor preferences and criteria. And we use machine learning to do that. With the advances in generative AI, we believe that there is a second chapter in betters history that is being written today, which will enable us to drive the cost of loan production and the speed at which we're able to process in a way that none of our competitors will be able to match.

Unnamed Speaker: And we think that we have been leaning into technology and AI since the founding of this company. So in 2014, we set out to build a autonomous rules engine that would match consumer data and property data to investor preferences and criteria. And we use machine learning to do that. With the advances in generative AI, we believe that there is a second chapter in better's history that is being written today which will enable us to drive the cost of loan production and the speed at which we're able to process in a way that none of our competitors will be able to match. Got it. Appreciate all that detail.

Speaker Change: Investor preferences, and criteria and we use machine learning to do that would be advances in generative AI. We believe that there is a second chapter in <unk> history that is being written today, which will enable us to drive the cost of loan production and the speed at which we're able to process in a way.

Speaker Change: None of our competitors will be able to match.

Unnamed Speaker: Got it. Appreciate all that detail. And one more question from me. The B2B pilot program you spoke about sounds like an interesting opportunity for other lenders like personal lenders to expand their product offerings into Helox. What do you see as the addressable opportunity here should this materialize?

Vishal Garg: Got it. Appreciate all that detail. And one more question for me. The B2B pilot program you spoke about sounds like an interesting opportunity for other lenders, like personal lenders, to expand their product offering into HELOC. What do you see as the addressable opportunity here should this materialize? So, that's another great question.

Speaker Change: Got it appreciate all that detail.

Speaker Change: One more question from me the BDC pilot program, you spoke about sounds like an interesting opportunity for other long barrels like personal lumber download product offering in Q HELOC, what do you see as the addressable opportunity here.

Unnamed Speaker: And one more question from me. The B2B pilot program you spoke about sounds like an interesting opportunity for other lenders like personal lenders to expand their product offerings into Helox. What do you see as the addressable opportunity here should this materialize?

Speaker Change: Material out.

Hana: So, that's another great question. There are over $2 trillion of personal installment loans, solar loans, student loans, and buy now, pay later loans that are all out there because the HELOC went away after the credit crisis. And so, we saw growth in all these other categories because the instant availability of credit from your home went away after the credit crisis. Consequently, the last decade has seen about $2 trillion of origination for other loan types that would traditionally have been covered by the HELOC product.

Vishal Garg: So, that's another great question. There are over $2 trillion of personal installment loans, solar loans, student loans, and buy now, pay later loans that are all out there because the HELOC went away after the credit crisis. And so, we saw growth in all these other categories because the instant availability of credit from your home went away after the credit crisis. Consequently, the last decade has seen about $2 trillion of origination for other loan types that would traditionally have been covered by the HELOC product.

Speaker Change: So that's another great question.

Speaker Change: Our over two trillion dollars.

Unnamed Speaker: So that's another great question. There are over $2 trillion of personal installment loans, solar loans, student loans, and by now pay later loans that all are out there because the Helox went away post the credit crisis. And so we saw growth in all these other categories because the instant availability of credit from your home went away after the credit crisis. And so the last decade has seen about $2 trillion of origination that would have for other loan types that would traditionally have been covered by the Helox product.

Speaker Change: Personal installment loans.

Speaker Change: <unk> loans student loans and buy now pay later loans that all out there because the HELOC went away.

Speaker Change: The credit crisis, and so we saw growth in all of these other categories because the availability of credit from your home went away after the credit crisis and so the last decade has seen.

Unnamed Speaker: And so the last decade has seen about $2 trillion of origination that would have for other loan types that would traditionally have been covered by the Helox product. And we see great partnership opportunities with lenders who have been in these other markets, who now, with the advent of a one-day Helox product and an instant underwrite on the Helox product for the consumer, are going to seek to have their consumers be able to access that product. Now the likelihood of them building it themselves is pretty remote, considering the complexities of mortgages and Helox. So we see a really great opportunity to partner with these existing lenders and many of the Fintech lenders that have come up over the past decade to actually be able to meet their consumers with the Helox product and be able to deliver that for them in partnership with these lenders.

Speaker Change: About two trillion dollars of origination that.

Speaker Change: For other loan types that would traditionally have been covered by the HELOC product and we see great partnership opportunities with lenders who have been in these other.

Hana: And we see great partnership opportunities with lenders who have been in these other markets, who now, with the advent of a one-day HELOC product and an instant underwrite on the HELOC product for the consumer, are going to seek to have their... consumers be able to access that product. Now, the likelihood of them building it themselves is pretty remote, considering the complexities of mortgages and HELOCs, so we see a really great opportunity to partner with these existing lenders and many of the fintech lenders that have come up over the past decade to actually be able to meet their consumers with a HELOC product and be able to deliver that for them in partnership with these lenders.

Vishal Garg: And we see great partnership opportunities with lenders who have been in these other markets, who now, with the advent of a one-day HELOC product and an instant underwrite on the HELOC product for the consumer, are going to seek to have their... consumers be able to access that product. Now, the likelihood of them building it themselves is pretty remote, considering the complexities of mortgages and HELOCs, so we see a really great opportunity to partner with these existing lenders and many of the fintech lenders that have come up over the past decade to actually be able to meet their consumers with a HELOC product and be able to deliver that for them in partnership with these lenders.

Unnamed Speaker: And we see great partnership opportunities with lenders who have been in these other markets, who now with the advent of a one-day Helox product and an instant underwrite on the Helox product for the consumer are going to seek to have their consumers be able to access that product. Now the likelihood of them building it themselves is pretty remote considering the complexities of mortgages and Helox. So we see a really great opportunity to partner with these existing lenders and many of the Fintech lenders that have come up over the past decade to actually be able to meet their consumers with the Helox product and be able to deliver that for them in partnership with these lenders.

Speaker Change: Markets, who now with the advent of a one day HELOC product and an instant underwrite the HELOC product for the consumer are going to seek to have there.

Speaker Change: Consumers be able to access that product now the likelihood of them building it themselves is pretty.

Speaker Change: Considering the complexities of mortgages and Helocs. So we see a really great opportunity to partner with these existing lenders and many of the fintech lenders that have come up over the past decade.

Unnamed Speaker: Great, thank you.

Speaker Change: Second to actually be able to meet their consumers with a HELOC product and be able to deliver that for the partnership.

Speaker Change: With these lenders.

Unnamed Speaker: Great, thank you.

Speaker Change: Great. Thank you.

Ryan Tomasillo: Your next question comes from the line of Ryan Tomasillo with KBW. Please go ahead. Morning everyone, thanks for taking the questions. As the mortgage market maybe starts to see some tailwinds here, was hoping you could walk us through some back of the envelope math for what level of origination volume you think the company needs to see in order to reach break even over the intermediate term.

Operator: Your next question comes from the line of Ryan Tomasello with KBW. Please go ahead.

Speaker Change: Your next question comes from the line of Ryan Thomas <unk> with <unk>. Please go ahead.

Ryan Tomasillo: Your next question comes from the line of Ryan Tomasillo with KBW, please go ahead. Morning everyone, thanks for taking the questions. As the mortgage market maybe starts to see some tailwinds here, was hoping you could walk us through some back of the envelope math for what level of origination volume you think the company needs to see in order to reach break even over the intermediate term. Thanks.

Operator: Morning, everyone. Thanks for taking the questions. You know, as the mortgage market maybe starts to see some tailwinds, I was hoping you could walk us through some back of the envelope math for what level of origination volume you think the company needs to see in order to reach break even over the intermediate term.

Ryan Thomas: Good morning, everyone. Thanks for taking the questions.

Ryan Thomas: As the mortgage mortgage market, maybe starts to see some tailwind here was hoping.

Raina Kumar: You could walk us through some back of the envelope math for what level of origination volume you think the company needs to see in order to reach break even over the intermediate term. Thanks.

Ryan Thomas: You could walk us through some could be envelope maths for what level of origination volume do you think the company needs to see in order to reach breakeven over the intermediate term.

Kevin Ryan: Thanks.

Ryan Thomas: Sure Hey, Brian It's Kevin Good morning.

Kevin Ryan: Okay, Ryan, it's Kevin. Good morning. So we look at this all the time. I think there's obviously three components to this. So we put up first just some expenses. We put up 40 points of operating leverage in the second quarter, right. We're very proud of the fact that we could hold expenses flat while getting revenue of 40%. I think that operating leverage was slattered in part, like Fischel mentioned, and it's prepared remarks by some one-timers, but I think the business from here has very little fixed expense growth. We need to put on to like literally 10X the volume of the company.

Kevin Ryan: Thanks. Sure. Hey, Ryan. It's Kevin. Good morning.

Kevin Ryan: So we look at this all the time. I think there are obviously three components to this. So we put up, first, just on expenses; we put up 40 points of operating leverage in the second quarter, right? We're very proud of the fact that we can hold expenses flat while getting revenue of 40%. I think that operating leverage was flattered in part, as I think Fishelle mentioned, and it's prepared remorse by some one-timers, but I think the business from here... has very little fixed expense growth we need to put on to, like, literally 10x the volume of the company. I mean, there's public company costs.

Kevin Ryan: If we look at this all the time I think there's three components to this so we put up first just on expenses, we put up 40 points of operating leverage in the second quarter right. We're very proud of the fact that we can hold expenses flat, while getting revenue up 40% I think that operating leverage.

Kevin Ryan: Okay Ryan, it's Kevin good morning. So we look at this all the time. I think there's obviously three components to this. So we put up first just some expenses. We put up 40 points of operating leverage in the second quarter, right. We're very proud of the fact that we could hold expenses flat while getting revenue of 40%. I think that operating leverage was slattered in part, like Fischel mentioned, and it's prepared remarks by some one-timers but I think the business from here has very little fixed expense growth.

Vishal: Was flattered in part Vishal.

Vishal: Vishal mentioned in his prepared remarks by some one timers, but I think the business from here has very little fixed expense growth, we need to put onto like literally 10 X. The volume of the company I mean, there's public company costs.

Kevin Ryan: I mean, there's public company costs. We obviously invest heavily in tech, just given the way this company was built, and so those expenses are already embedded. So, from a volume perspective, it's also a function of gain on sale. So it's really revenue, right, versus volume that ultimately matters to cover an expense base. It's run at $150 million through two quarters. That's fully loaded, including stock base comp and everything else, including non-cash expenses. So what we're doing is we're guiding to over billion a volume in Q3. We took in on sale up in Q2 versus Q1.

Kevin Ryan: We need to put on to like literally 10X the volume of the company. I mean, there's public company costs. We obviously invest heavily in tech just given the way this company was built and so those expenses are already embedded. So from a volume perspective it's also a function of gain on sale. So it's really revenue right versus volume that ultimately matters to cover an expense base. It's run at $150 million through two quarters.

Kevin Ryan: We obviously invest heavily in tech, just given the way this company was built, and so those expenses are already embedded. So from a volume perspective, it's also a function of gain on sale. So it's really revenue, right, versus volume that ultimately matters to cover an expense base that's run $150 million through two quarters that's fully loaded, including stock-based comp and everything else, including non-cash expenses. And so what we're doing is we're guiding to over a billion in volume in Q3.

Speaker Change: We obviously invest heavily intact just given the way. This company was built and so those expenses are already embedded.

Ryan Thomas: So from a volume perspective. It is also a function of gain on sale.

Ryan Thomas: So it's really revenue rate versus volume that ultimately matters to cover a an expense basis run at $150 million through two quarters.

Ryan Thomas: Fully loaded including stock based comp and everything else.

Ryan Thomas: Noncash expenses and so what we're doing as we're guiding to over $1 billion of volume in Q3.

Kevin Ryan: That's fully loaded including stock base comp and everything else including non-cash expenses. So what we're doing is we're guiding to over billion a volume in Q3. We took in on sale up in Q2 versus Q1. We're working to do that again now in Q3. We're running pricing experiments and things like that. We're still the very low cost of the customer to lower the number at which we need to break even. To something just north of $10 billion we'd like to get to.

Kevin Ryan: We took gain-on-sale up in Q2 versus Q1. We're working to do that again now in Q3. We're running pricing experiments and things like that, but we're still at a very low cost to the customer. To lower the number at which we need to break even, to something just north of $10 billion we'd like to get to, but we're still working that through. So what we're going to try to do in September is to do an investor meeting where we actually lay out that math in great detail, but it will be a combination of volume and gain-on-sale margin we ultimately land at in our business.

Ryan Thomas: We took gain on sale up in Q2 versus Q1.

Kevin Ryan: We're working to do that again now in Q3. We're running pricing experiments and things like that. We're still the very low cost of the customer to lower the number at which we need to break even. To something just north of $10 billion, we'd like to get to. But we're still working that through.

Ryan Thomas: We're working to do that again now in Q3, we're running pricing experiments and things like that we're still at the very low cost to the customer to lower the number at which we need to breakeven.

Ryan Thomas: There's something just north of $10 billion, we'd like to get to but we're still working that through and so we're going to what we're going to try to do on September <unk>.

Kevin Ryan: So what we're going to try to do in September is do an investor meeting where we actually lay out that math in great specificity, but it will be a combination of volume and gain on sale margin. We ultimately land at in our business.

Kevin Ryan: But we're still working that through. So what we're going to try to do in September is do a investor meeting where we actually lay out that math and great specificity but it will be a combination of volume and gain on sale margin. We ultimately land at in our business. Okay, thank you. We don't think expenses grow much from here. We doubled marketing expense. We're hiring L.O, so I don't think we're going to put up 40 points of operating leverage every quarter.

Speaker Change: Investor meeting, where we actually lay out that math in great specificity, but it will be a combination of volume and gain on sale margin, we ultimately land at in our business.

Kevin Ryan: Okay, thank you. We don't think expenses grow much from here. We doubled marketing expense. We're hiring L.O. so I don't think we're going to put up 40 points of operating leverage every quarter. We're going to have to add some what I'll call variable expenses. But our fixed expenses are, and we're still not going to down. We're going to continue. We got compensation down. We're going to take out some chunky corporate costs this quarter around leases and vendors. And so we're working through it every day. Got it.

Speaker Change: Okay. Thanks.

Kevin Ryan: Okay, thank you. We appreciate it. We don't think expenses will grow much from here. We doubled marketing expense. We're hiring LOs, so I don't think we're going to put up 40 points of operating leverage every quarter. We're going to have to add some what I'll call variable expenses. Yeah.

Speaker Change: We don't think expenses grow much from here, we doubled marketing.

Speaker Change: We're hiring low so I don't think we're going to put up 40 points of operating leverage every quarter, we're going to have to add some what I'll call variable expenses.

Kevin Ryan: But our fixed expenses are, and we're still knocking them down. We're going to continue; we've got compensation down. We're going to take out some chunky corporate costs this quarter around leases and vendors, and so we're working through it every day. Got it. Thanks, Kevin. And then, a separate but related topic. I was hoping you could provide your updated thoughts on how the upcoming Broker Commission practice changes in about a week might impact the industry, and how you see that playing out for the mortgage market, in particular, the unique relationship that, you know, the mortgage market does have with residential brokers, particularly on the buy side, that serve as a meaningful source of referral business for loans. Thanks.

Kevin Ryan: We're going to have to add some what I'll call variable expenses. But our fixed expenses are and we're still not going to down. We're going to continue. We got compensation down. We're going to take out some chunky corporate costs this quarter around leases and vendors. And so we're working through it every day. Got it. Thanks Kevin.

Speaker Change: But our fixed expenses are and we're still knocking them down where we were going to continue we got compensation down we're going to take out some chunky corporate cost this quarter.

Speaker Change: Around leases and vendors and so we're working through it every day.

Kevin Ryan: Thanks, Kevin.

Speaker Change: Got it thanks, Kevin and then.

Unnamed Speaker: And then a separate but related topic was hoping you could provide your updated thoughts on how the upcoming broker commission practice changes in about a week might impact the industry. And how do you see that playing out for the mortgage market in particular, just given the unique relationship that you know the mortgage market does have with residential brokers, particularly on the buy side, that serve as a meaningful source of referral business for loan officers. Thanks.

Speaker Change: Separate but related topic.

Speaker Change: I was hoping you could provide your updated thoughts on how the upcoming broker Commission practice changes in about a week might impact the industry.

Unnamed Speaker: And then separate but related topic was hoping you could provide your updated thoughts on how the upcoming broker commission practice changes in about a week might impact the industry. And how you see that playing out for the mortgage market in particular just given the unique relationship that you know the mortgage market does have with residential brokers particularly on the buy side that serve as a meaningful source of referral business for loan officers.

Speaker Change: And how you see that playing out for the mortgage market in particular just given.

Speaker Change: The unique relationship that the mortgage market does have with.

Speaker Change: Residential.

Hana: Brokers, particularly on the buy side, that serve as a meaningful source of referral business for what we're doing in AI, the digital experience, the low cost to the customer, that should act as, on a relative basis, a tailwind for Better versus others. And so we're going to continue to partner with real estate agents. We need to do more purchase loans. We've been saying that for a year and a half, two years now. We understand that, but we do, actually, you know, support anything that makes the market better for the consumer.

Speaker Change: Brokers, particularly on the buy side that serve as a meaningful source of referral business for loan officers.

Unnamed Speaker: Sure. So I make two comments. I think we still see the broker having a very important role in this, and we've worked hard to improve our relationships with real estate agents, brokers over the last year. I think part of the history of the company growing up is a digitally native business that wasn't out in the field. We didn't really have those relationships, and as the market term from refighted purchase, it's taken us a little while to catch up and adopt those relationships. That's 0.1. But 0.2, and this is counterbalance. Is that industry transforms? We're perfectly placed to transform with the industry; meaning anything that takes cost and friction out of the process is ultimately good.

Speaker Change: Sure.

Kevin Ryan: Thanks. Sure. I'll make two comments. I think we still see...

Speaker Change: Make two comments I think we still see.

Kevin Ryan: The broke are having a very important role. And we've worked hard to improve our relationships with real estate agents and brokers over the last year, right? I think part of the history of the company growing up is a digitally native business that wasn't out in the field. We didn't really have those relationships.

Speaker Change: The brokers are having a very important role.

Unnamed Speaker: Thanks. Sure. So I make two comments. I think we still see the broker having a very important role in this and we've worked hard to improve our relationships with real estate agents brokers over the last year. I think part of the history of the company growing up is a digitally native business that wasn't out in the field. We didn't really have those relationships and as the market term from refighted purchase it's taken us a little while to catch up and adopt those relationships.

Speaker Change: And we've worked hard.

Speaker Change: To improve our relationships with real estate agents brokers over the last year right I think part of that.

Speaker Change: The history of the company growing up is.

Speaker Change: Digitally native digitally native business.

Speaker Change: There wasn't not out in the field, we didn't really have those relationships and as the market turned from refi to purchase.

Kevin Ryan: And as the market turned from refi to purchase, it's taken us a little while to catch up and adopt those relationships. That's point one. But point two, and this is counterbalanced, is that the industry transforms. We're perfectly placed to transform with the industry, meaning anything that takes costs and friction out of the process is ultimately good, in our mind, for the process. That's the reason Rochelle founded this company. And so, if you lower that friction and transaction costs across the board, there will be more transactions, we think, over time.

Speaker Change: It's taken us a little while to catch up and adopt those relationships that's 0.1.

Speaker Change: <unk> two and <unk>.

Speaker Change: As counterbalances that industry transforms.

Unnamed Speaker: That's 0.1. But 0.2 and this is counterbalance. Is that industry transforms? We're perfectly placed to transform with the industry meaning anything that takes cost and friction out of the process is ultimately good. In our mind for the process that's the reason for shell founded this company. And so if you lower that friction and transaction costs across the board there will be more transactions we think over time. And I think particularly given what we're doing in AI, the digital experience, the low cost to the customer that should act as a relative basis of tailwind for better versus others.

Speaker Change: It really plays to transform with the industry, meaning anything that takes cost and friction out of the process is ultimately good in our minds for the process.

Unnamed Speaker: In our mind for the process that's the reason for Shell founded this company. And so if you lower that friction and transaction costs across the board, there will be more transactions, we think, over time. And I think particularly given what we're doing in AI, the digital experience, the low cost to the customer that should act as a relative basis of tailwind for better versus others. And so we're going to continue to partner with real estate agents. We need to do more purchase loans. We've been saying that for a year and a half, two years now.

Speaker Change: Thats the reason Vishal founded this company and so if you lower the friction and transaction costs across the board there will be more transactions, we think over time and I think particularly given.

Kevin Ryan: And I think, particularly given what we're doing in AI, the digital experience, the low cost to the customer, that should act as, on a relative basis, a tailwind for Better versus others. And so, we're going to continue to partner with real estate agents. We need to do more purchase loans. We've been saying that for a year and a half, two years now. We understand that, but we do, actually, you know, support anything that makes the market better for the consumer.

Speaker Change: What we're doing in the digital experience the low cost to the customer that should act as a <unk>.

Speaker Change: Relative basis, a tailwind from better versus others and so we're going to continue to partner with real estate agents, we need to do more purchased loans, we've been saying that for a year and a half two years now we understand that but what we do actually.

Unnamed Speaker: And so we're going to continue to partner with real estate agents. We need to do more purchase loans. We've been saying that for a year and a half, two years now. We understand that. But what we do actually support anything that makes the market better for the consumer.

Unnamed Speaker: We understand that. But what we do actually support anything that makes the market better for the consumer.

Speaker Change: Support anything that makes the market better for the consumer.

Unnamed Speaker: Yeah, I think fundamentally, as soon as consumers, and I know there are changes coming through this week and the week after, where from going forward, consumers are going to have to sign these representation agreements, where they're going to, in many cases, say they're on the hook for the fee, even if the seller doesn't pay the realtor a fee. I think that's, of course, consumers to potentially shop around for realtors, and then if they're going to shop around for realtors, they're going to go online, and when they go online, they come to us. Now the fact is the bulk of consumers still don't shop around, and they don't go online.

Vishal Garg: Yeah, I think fundamentally, as soon as consumers, and I know there are changes coming this week and the week after, where from going forward, consumers are going to have to sign these representation agreements where they're going to, in many cases, say they're on the hook for the fee, even if the seller doesn't pay the realtor a fee. I think that's going to force consumers to potentially shop around for realtors. And then, if they're going to shop around for realtors, they're going to go online.

Speaker Change: Yeah, I think fundamentally as soon as consumers and I know theyre changes coming through this week.

Unnamed Speaker: Yeah, I think fundamentally as soon as consumers and I know there are changes coming through this week and the week after where from going forward consumers are going to have to sign these representation agreements where they're going to, in many cases, say they're on the hook for the fee, even if the seller doesn't pay the realtor a fee. I think that's of course consumers to potentially shop around for realtors and then if they're going to shop around for realtors, they're going to go online and when they go online they come to us.

Speaker Change: We got better where going forward consumers are going to have to sign these representation agreement, where theyre going to in many cases say that are on the hook for the fee.

Speaker Change: Even if the seller doesn't pay the royalty or a fee I think that's of course consumers to potentially shop around the realtors and then if theyre going to shop around for Realtors Theyre going to go online and when they go online they come to US now. The fact is the bulk of consumers still don't shop around and they don't go online to 80% plus of the consumers do not shop, our undergo online according to the CFPB.

Vishal Garg: And when they go online, they come to us. But the fact is, the bulk of consumers still don't shop around, and they don't go online. 80% plus of the consumers do not shop around or go online, according to the CFPB. So we're pretty psyched about the potential for there to be significant disruption in the consumer's willingness to go online to both shop for a realtor as they shop for homes, and then, as they shop for a realtor, to shop for a mortgage.

Unnamed Speaker: The 80% plus of the consumers do not shop around or go online, according to the CFPB. So we're pretty psyched about the potential for there to be significant disruption in the consumers' willingness to go online to both shop for realtors as they shop for homes and then as they shop for a realtor to shop for a mortgage.

Unnamed Speaker: Now the fact is the bulk of consumers still don't shop around and they don't go online. The 80% plus of the consumers do not shop around or go online according to the CFPB. So we're pretty psyched about the potential for there to be significant disruption in the consumers' willingness to go online to both shop for realtors as they shop for homes and then as they shop for a realtor to shop for a mortgage. I appreciate the comments, thanks guys. Thanks Ryan.

Speaker Change: So.

Speaker Change: Sure.

Speaker Change: Pretty.

Speaker Change: Psyched about the potential for there to be significant disruption in the consumer's willingness to.

Speaker Change: Go online to both shop for a realtor as they shop for homes, and then as they shop, our realtor to shop for a mortgage.

Unnamed Speaker: I appreciate the comments; thanks, guys. Thanks, Ryan.

Operator: I appreciate the comments; thanks, guys.

Raina Kumar: I appreciate the comments. Thanks, guys.

Speaker Change: I appreciate the comments thanks guys.

Brian: Thanks, Brian.

Unnamed Speaker: Your next question comes from the line of Joseph Zaffey with Canaccord Genuity. Please go ahead. Hey everyone, good morning, and thanks for the opportunity to ask some questions. Just wondering here in the rate environment that we're in and what we're looking at potentially moving forward, how much rate cut do you think we need to see before potentially re-five volumes start to kick back up materially and then follow up? I'll let Kevin handle how much the rate cuts need to be, but I know that with 50 basis points of rate cuts, there's about six million purchase mortgages that have been originated since 2022, and on average, a 50 basis point of rate cuts is going to save each of these homeowners at least a hundred bucks a month, which is pretty significant. Their propensity to refinance is going to be higher because of the rates they have financed that versus what traditional pre-paid speeds were when people were getting three or four percent mortgages.

Operator: Your next question comes from the line of Joseph Zaffi with Canaccord Genuity. Please go ahead.

Joseph <unk>: Your next question comes from the line of Joseph <unk> with Canaccord Genuity. Please go ahead.

Joseph Zaffey: Your next question comes from the line of Joseph Zaffey with Canacorn Genuity, please go ahead. Hey everyone, good morning and thanks for the opportunity to ask some questions. Just wondering here in the rate environment that we're in and what we're looking at potentially moving forward, how much rate cut do you think we need to see before potentially re-five volumes start to kick back up materially and then follow up? I'll let Kevin handle how much the rate cuts need to be but I know that with 50 basis points of rate cuts there's about six million purchase mortgages that have been originated since 2022 and on average a 50 basis point of rate cuts is going to save each of these homeowners at least a hundred bucks a month which is pretty significant and their propensity to refinance is going to be higher because of the rates they have financed that versus what traditional pre-paid speeds were when people were getting three or four percent mortgages.

Vishal Garg: Hey, everyone. Good morning and thanks for the opportunity to ask some questions. Just wondering, you know, in the rate environment that we're in and what we're looking at potentially moving forward, you know, how much rate cut do you think we need to see before, perhaps, refi volumes start to kick back up materially and follow up?

Joseph: Hey, everyone. Good morning. Thanks.

Joseph <unk>: Thanks for the opportunity.

Joseph <unk>: Questions just wondering here in the rate environment that we're in and what we're looking at potentially moving forward.

Speaker Change: How much.

Speaker Change: Great.

Speaker Change: We need to see before potentially refi.

Speaker Change: Refi volume start to kick back up materially.

Speaker Change: I'll follow up.

Kevin: I'll let Kevin handle how much the rate cuts need to be, but I know that with 50 basis points of rate cuts, there are about 6 million purchase mortgages that have been originated since 2022, and on average, 50 basis points of rate cuts, that's going to save each of these homeowners at least 100 bucks a month, which is pretty significant. And, you know, their propensity to refinance is going to be higher because of the interest rates.

Vishal Garg: I'll let Kevin handle how much the rate cuts need to be, but I know that with 50 basis points of rate cuts, there are about 6 million purchase mortgages that have been originated since 2022. And on average, a 50 basis points of rate, that's going to save each of these homeowners at least 100 bucks a month, which is pretty significant. And their propensity to refinance is going to be higher because of the interest rates.

Speaker Change: I'll, let Kevin handle the how much the rate cuts need to be but I know that with 50 basis points of rate cuts.

Speaker Change: There's about $6 million purchase mortgages that had been originated since 2022, and an average of 50 basis points of rate that's going to save each of these homeowners at least 100 Bucks a month, which is pretty significant.

Kevin: They are being financed that versus what traditional prepaid speeds were when people were getting 3 or 4% mortgages. So, 6 million consumers, let's assume, you know, the $150,000 average balance is probably more nowadays, you know, you're talking about a trillion and a half dollars of potential refinance volume. And back when we were doing refinances, we had between 1 to 2% market share in 2020 and 2021 of refinances in the market. So we see a pretty significant boost for our ability to capture and grow into that.

Speaker Change: And their propensity to refinance is going to be higher because of the rates. They are they have financed that versus what traditional prepaid speeds, where or when people were getting 3% to 4% mortgages. So 6 million consumers, let's assume.

Vishal Garg: They have financed that versus what traditional prepaid speeds were when people were getting 3 or 4% mortgages. So 6 million consumers, let's assume $150,000 average balance is probably more nowadays. You're talking about a trillion and a half dollars of potential refinance volume. And back when we were doing refinances, we had between 1 to 2% market share in 2020 and 2021 of refinances in the market. So we see a pretty significant boost for our ability to capture and grow on that.

Unnamed Speaker: So six million consumers, let's assume, you know, $150,000 average balance is probably more nowadays. You know, you're talking about a trillion and a half dollars of potential refinance volume, and back when we were doing refinances, we had between one to two percent market share in 2020 and 2021 of refinances in the market.

Speaker Change: $150000 average balance is probably more nowadays.

Joseph Zaffey: So six million consumers, let's assume, you know, $150,000 average balance is probably more nowadays, you know you're talking about a trillion and a half dollars of potential refinance volume and back when we were doing refinances we had between one to two percent market share in 2020 and 2021 of refinances in the market. So we see a pretty significant boost for our ability to capture and grow into that particularly with our one-day mortgage, one-day re-five product offerings that enable consumer to go online and effectively lock their refinance and lock in their savings within 15 minutes and then be able to have a commitment letter for that within the same day.

Speaker Change: Talking about a trillion $5.

Speaker Change: Potential refinance volume.

Speaker Change: Back when we were doing refinances, we had between 1% to 2% market share in 2020 in 2021.

Speaker Change: Of refinances in the market. So we see a pretty significant boost for our ability to capture and grow into that.

Unnamed Speaker: So we see a pretty significant boost for our ability to capture and grow into that, particularly with our one-day mortgage, one-day re-five product offerings that enable consumer to go online and effectively lock their refinance and lock in their savings within 15 minutes and then be able to have a commitment letter for that within the same day. And I think I would ask of that, so the mindset of the consumer for the last couple of years is we should go and operate, go and operate, go and off. Now you're finally having this shift where we're almost certainly going to get a cut in September, right?

Vishal Garg: With our one-day mortgage and one-day refi product offerings that enable consumers to go online and effectively lock in their refinance and lock in their savings within 15 minutes and then be able to have a commitment letter for that within the same day.

Speaker Change: With our one day mortgage one day refi product offerings that enable consumer to go online and effectively lock their refinance and lock in their savings within 15 minutes and then be able to have a commitment letter for that within the same day.

Kevin Ryan: And I think I would add to that the mindset of the consumer for the last couple of years has been rates are going up, rates are going up, rates are going up. Now you're finally having this shift where we're almost certainly going to get a cut in September, right? We'll have to see.

Speaker Change: And I think I would add to that.

Speaker Change: So.

Joseph Zaffey: And I think I would ask of that, so the mindset of the consumer for the last couple of years is we should go and operate, go and operate, go and off. Now you're finally having this shift where we're almost certainly going to get a cut in September, right? We'll have to see, there's still some data that this I don't need to see but I think people are very convinced that we're going to get the first moving September.

Speaker Change: The mindset.

Speaker Change: The consumer for the last couple of years ago about rates going up rates are going up now you are finally, having this shift where we're almost certainly going to get a cut in September arrival, FSA theres still some data that the federally to say, but I think people are very convinced that we're going to get the first move in September and.

Unnamed Speaker: We'll have to see; there's still some data that this I don't need to see, but I think people are very convinced that we're going to get the first moving September. And so, from that perspective, we're finally, for this industry, going to have a tailwind going forward. But we don't know what's going to happen to the curve; the curve is flat, and it should ultimately steepen over time. So it's really hard to track direct mortgage rates with the Fed funds rate, but as from a sentiment matter, it does start to show to the consumer that rates are coming down and it's okay to kind of dip back into this market.

Kevin Ryan: There's still some data that the Fed will need to see, but I think people are very convinced that we're going to get the first move in September. And so from that perspective, we're finally, for this industry, going to have a tailwind going forward, right? We don't know what's going to happen to the curve. The curve is flat, and it should ultimately steepen over time.

Speaker Change: And so from that perspective, we're finally for this industry going to have a tailwind going forward or we don't know what's going to happen to the curve. The curve is flat and it should ultimately steepen over time, and so it's really hard to track direct mortgage rates with the fed funds rate.

Joseph Zaffey: And so from that perspective we're finally, for this industry, going to have a tailwind going forward. But we don't know what's going to happen to the curve, the curve is flat and it should ultimately steep in over time and so it's really hard to track direct mortgage rates with the Fed funds rate but as from a sentiment matter it does start to show to the consumer that rates are coming down and it's okay to kind of dip back into this market.

Kevin Ryan: And so it's really hard to track direct mortgage rates with the Fed funds rate. But as from a sentiment matter, it does start to show to the consumer that rates are coming down, and it's okay to kind of dip back into this market. You still have supply challenges, you still have affordability challenges. So it's going to take a bit to work through this.

Speaker Change: But from a sentiment matter it does start to show to the consumer that rates are coming down and that's okay too.

Speaker Change: Dip back into this market you saw supply challenges you still have affordability challenges.

Unnamed Speaker: You supply challenges; you still affordability challenges, so it's going to take a bit to work through this. But as Vishal said, we've been bumping in 7% or even slightly buzz 7% really for the first six months of the year at this point. You got down lower and the last week, Monday, you know, now you're kind of running just below 7% generally. The more market pricing is pretty dynamic, that 50%. savings is $200 plots for our average customer. And I think that's meaningful enough to just start a little mini-refi move even really at current rates, and we expect rates to, you know, march down into the lower sixes by the end of the year.

Speaker Change: It's going to take a bit to work through this but as Vishal said.

Joseph Zaffey: You supply challenges, you still affordability challenges so it's going to take a bit to work through this but as Vishal said, we've been bumping in 7% or even slightly buzz 7% really for the first six months of the year at this point. You got down lower and the last week, Monday, you know, now you're kind of running just below 7% generally, the more market pricing is pretty dynamic, that 50%, savings is $200 plots for our average customer.

Kevin Ryan: But as Vishal said, we've been bumping at 7% or even slightly above 7% for the first six months of the year at this point. You got down lower in the last week, Monday. Now you're kind of running just below 7% generally. The market pricing is pretty dynamic, savings are $200 plus for our average customer, and I think that's meaningful enough to just start a little mini refi move, even at current rates, and we expect rates to march down into the lower sixes by the end of the year. It's nothing like 2020 and 2021, obviously, but people that did deals in 22 and 23 are going to be refi eligible in the near term here.

Vishal: We've been bumping and 7% or even slightly above 7% really for the first six months of the year at this point.

Speaker Change: You got down lower in the last week Monday, now Youre kind of running just below 7% generally.

Speaker Change: The market pricing is pretty dynamic that 50.

Speaker Change: Savings is $200 plus for our average customer and I think is meaningful enough to just start a little mini refi move really at current rates and we expect rates to March down to the lower sixes by the end of the year.

Joseph Zaffey: And I think that's meaningful enough to just start a little mini-refi move even really at current rates and we expect rates to, you know, march down into the lower sixes by the end of the year. Great thing like 2020-21 obviously, but we people that did deals in 22 and 23 are going to be refiologable in the near-term year. Sure, that's great color and then just to follow up on that same point, is there a kind of revenue margin differential between your refi business and your original purchase business?

Unnamed Speaker: Great thing like 2020-21 obviously, but we people that did deals in 22 and 23 are going to be refiologable in the near-term year.

Raina Kumar: Great. Thanks a lot.

Speaker Change: Great.

Speaker Change: One obviously, but we people that did deals in 'twenty, two and 'twenty three are going to be refi eligible in the near term here.

Kevin Ryan: Sure, that's a great color and then just to follow up on that same point, is there a kind of revenue margin differential between your refi business and your original purchase business? Thanks a lot.

Unnamed Speaker: Sure, that's great color, and then just to follow up on that same point, is there a kind of revenue margin differential between your refi business and your original purchase business? Thanks a lot. Yeah, I mean historically, when, you know, refi correlates with higher volume and historically, we've put up, it's by higher margins. Because if you remember, if we bring them down, it's also going to open up the purchase market. Affordability has been a big issue. So margins are very driven by just aggregate volume in the industry. Because this is a supply-demand dynamic across the sector.

Speaker Change: Sure.

Speaker Change: Great color and then just to follow up on that same point is there.

Speaker Change: China revenue the margin differential between your refi business in Europe.

Speaker Change: Original purchase does thanks a lot.

Kevin Ryan: Yeah, I mean, historically, when refi correlates with higher volume, and historically, we put up a slightly higher margin. Because remember, if rates come down, it's also going to open up the purchase market.

Speaker Change: Yes, I mean historically when.

Speaker Change: Refi correlates with higher volume and historically, we've put up slightly higher margins.

Joseph Zaffey: Thanks a lot. Yeah, I mean historically, when, you know, refi correlates with higher volume and historically, we've put up, it's by higher margins. Because if you remember, if we bring them down, it's also going to open up the purchase market, affordability has been a big issue. So margins are very driven by just aggregate volume in the industry. Because this is a supply-demand dynamic across the sector. That also being said, margins are likely to be healthy because of the number of loan officers that have left the industry.

Speaker Change: Because remember with rates coming down is also going to open up the purchase market affordability has been a big issue. So margins are very driven by this aggregate volume in the industry.

Kevin Ryan: Affordability has been a big issue, so margins are very driven by just aggregate volume in the industry because it's a supply-demand dynamic across the sector.

Speaker Change: It's a supply demand dynamic across the sector.

Unnamed Speaker: That also being said, margins are likely to be healthy because of the number of loan officers that have left the industry. So you've seen, since the peak in 2021, an attrition rate of about 45%, depending on who you ask, of the number of loan officers that are licensed and are out there and doing transactions.

Kevin Ryan: That being said, margins are likely to be healthy because of the number of loan officers that have left the industry. Correct. So, you've seen an attrition rate of about 45 percent, depending on who you ask, of the number of loan officers that are licensed and are out there and doing transactions.

Hana: That being said, margins are likely to be healthy because of the number of loan officers that have left the industry. Correct. So you've seen since the peak in 2021 an attrition rate of about 45 percent, depending on who you ask, of the number of loan officers that are licensed and are out there and doing transactions.

Speaker Change: That also being said.

Speaker Change: Margins are likely to be.

Speaker Change: Healthy because of the number of loan officers that have left the industry correct. So you've seen since the peak in 2021, an attrition rate of about 45% depending on who you ask of the number of loan officers that are license that are out there and doing transactions.

Joseph Zaffey: So you've seen since the peak in 2021, an attrition rate of about 45% depending on who you ask of the number of loan officers that are licensed and are out there and doing transactions. You know, and the other thing I'll add, so there's, it's funny when you're in the mortgage business, there's the revenue margin. But then there's like you think about running a company that just you're operating margin. When we do refinances and clearly, you know, we did 50 billion of volume back in 2021, 50 billion approximately in which was refi, our cost to actually execute that loan is much lower.

Kevin Ryan: Yeah. Yeah. Yeah. Yeah.

Kevin Ryan: You know, and the other thing I'll add, so it's funny when you're in the mortgage business, there's the revenue margin, but then there's, like, you think about running a company, just your operating margin. When we do refinances, and clearly, you know, we did $50 billion of volume back in 2021, $50 billion, approximately, which was refinances, our cost to actually execute that loan is much A purchase process takes some handholding, some time, et cetera; it's more LO time.

Hana: You know, and the other thing I'll add, so it's funny when you're in the mortgage business, there's the revenue margin, but then there's, you think about running a company, just your operating margin. When we do refinances, and clearly, you know, we did $50 billion of volume back in 2021, $50 billion, approximately, which was refinances, our cost to actually execute that loan is much lower. A purchase process takes some hand-holding, some time, et cetera; it's more LO time.

Unnamed Speaker: You know, and the other thing I'll add, so there's, it's funny when you're in the mortgage business, there's the revenue margin. But then there's like you think about running a company that just you're operating margin. When we do refinances and clearly, you know, we did 50 billion of volume back in 2021, 50 billion approximately in which was refi, our cost to actually execute that loan is much lower. A purchase process takes some handholding, some time, et cetera; it's more L.O. time. A refi can be a very quick twitch. And so our cost to manufacture is lower, so our corporate margin or our contribution margin on that refi loan, for us, is certainly higher than it has been on purchase.

Hana: You know, and the other thing I'll add. So there it is.

Speaker Change: And the other thing I'll add there is.

Speaker Change: It's funny when youre in the mortgage business. There is the revenue margin, but then there's like do you think about running our company.

Speaker Change: Just your operating margin when we do refinances and clearly we did $15 billion of volume back in 2021 50 billion approximately of which was refi.

Joseph Zaffey: A purchase process takes some handholding, some time, et cetera, it's more L.O, time. A refi can be very quick twitch. And so our cost to manufacture is lower, so our corporate margin or our contribution margin on that refi loan, for us is certainly higher than it has been on purchase. And we'll be even having equal gain on sale or revenue margin.

Speaker Change: Our cost to actually execute that loan is much lower.

Speaker Change: Purchase process takes some hand, holding some time et cetera, it's more allo time, a refi can be very quick twitch and so our cost to manufacturer is lower.

Kevin Ryan: A refi can be a very quick twitch, and so our cost to manufacture is lower, so our corporate margin, or our contribution margin on that refi loan, for us, is certainly higher than it has been on purchase and will be, even at an equal gain on sale or revenue margin.

Hana: A refi can be a very quick twitch, and so our cost to manufacture is lower, so our corporate margin, or our contribution margin on that refi loan, for us, is certainly higher than it has been on purchase and will be, even at an equal gain on sale or revenue margin. Your next question...

Unnamed Speaker: Thanks for all that color.

Speaker Change: So our corporate margin or a contribution margin on that refi loan for US is certainly higher than it has been on purchase and we will be even equal.

Unnamed Speaker: And we'll be even having equal gain on sale or revenue margin.

Speaker Change: Equally gain on sale or revenue margin.

Unnamed Speaker: Thanks for all that color.

Kevin Ryan: Thanks for all that, Colin. Your next question comes from the line of Jeff Cantwell with Seaport.

Speaker Change: Thanks for all that color.

Jeff Cantwell: Your next question comes from the line of Jeff Cantwell with Seaport Research Partners. Please go ahead. Hey, thank you. I wanted to ask you, do Ryan start in the rise? I'm assuming I can continue.

Operator: Your next question comes from the line of Jeff Cantwell with Seaport Research Partners. Please go ahead. Okay, thank you. I have something else to ask you. Thank you.

Operator: Your next question comes from the line of Jeff Cantwell with Seaport Research Partners. Please go ahead. Hey, thank you. I wanted to ask you something.

Speaker Change: Your next.

Speaker Change: <unk> comes from the line of Jeff Cantwell with Seaport Research partners. Please go ahead.

Jeff Cantwell: Your next question comes from the line of Jeff Cantwell with Seaport Research Partners. Please go ahead. Hey, thank you.

Jeff Cantwell: Hey, Thank you wanted to ask you with Dubai, starting to rise just given that you're indicating you talked a little bit about your loan officer capacity for originations in.

Unnamed Speaker: He's talking a little bit about your own officer capacity for organizations, and will investments will be a typical operational bottleneck. Thanks. Yeah, I mean, our productivity for loan officers has continued to be best in class for the industry. And as we're bringing these experienced loan officers on, we're seeing, you know, guys and gals that we're doing two to four loans a month come on our platform and do north of 10 loans a month. So the bottlenecks really are in terms of recruiting, where we're seeing, you know, continued incumbents shedding workforces and in training in terms of being able to then train these experienced loan officers to work on the system, on the Tin Man system.

Unnamed Speaker: I wanted to ask you, do Ryan start in the rise? I'm assuming I can continue. He's talking a little bit about your own officer capacity for organizations and will investments will be a typical operational bottleneck. Thanks. Yeah, I mean, our productivity for loan officers has continued to be best in class for industry. And as we're bringing these experienced loan officers on, we're seeing, you know, guys and gals that we're doing two to four loans a month come on our platform and do north of 10 loans a month.

Speaker Change: We will investments when we do the typical operational bottleneck.

Vishal Garg: Yeah, I mean, our productivity for loan officers has continued to be best in class for the industry. As we're bringing these experienced loan officers on, we're seeing, you know, guys and gals that were doing two to four loans a month come on our platform and do north of 10 loans a month. So the bottlenecks really are in terms of recruiting, where we're seeing, you know, continued incumbent workforce shedding, and in training, in terms of being able to then train these experienced loan officers to work on the system. On the Tin Man system.

Speaker Change: Yes, I mean, our productivity for loan officers has continued to be best in class for industry.

Jeff Cantwell: And as we're bringing these experienced loan officers on we're seeing.

Speaker Change: <unk> gals that we're doing two to four loans a month come on our platform and do north of 10 loans a month.

Speaker Change: So the bottleneck really are in terms of recruiting where we're seeing continued incumbents shedding workforces.

Unnamed Speaker: So the bottlenecks really are in terms of recruiting, where we're seeing, you know, continued incumbents shedding workforces and in training in terms of being able to then train these experienced loan officers to work on the system, on the Tin Man system. So there's some gravity gravitational forces that preclude us from growing massively. But those are bottlenecks primarily on training the experienced loan officers to come on board the platform. We've had some amazing luck on recruiting in terms of being able to hire them.

Jeff Cantwell: And in training in terms of.

Jeff Cantwell: Being able to then train these experienced loan officers to work on the system on the tinman system. So there is there is.

Unnamed Speaker: So there's some gravity gravitational forces that preclude us from growing massively. But those are bottlenecks primarily on training the experienced loan officers to come on board the platform. We've had some amazing luck on recruiting in terms of being able to hire them. You know, there's some bottlenecks on onboarding. And then once they're on the system, their productivity is world-class. Their productivity is industry-beating. So we see some really great productivity and margin expansion as we get more of these experienced loan officers onto the platform and we scale up.

Vishal Garg: So there's, you know, some gravitational forces that, you know, preclude us from growing massively, but those are, you know, bottlenecks primarily in training experienced loan officers to come on board the platform. We've had some amazing luck in recruiting, and in terms of being able to hire them, there's some bottlenecks in onboarding. And then once they're on the system, their productivity is world class. Their productivity is industry-beating. So we see some really great productivity and margin expansion as we get more of these experienced loan officers onto the platform and scale it up.

Jeff Cantwell: <unk>.

Jeff Cantwell: There is some gravity gravitational forces that preclude us from growing.

Jeff Cantwell: Massively, but those are bottlenecks, primarily on training experienced loan officers to come onboard the platform. We've had some amazing luck on recruiting.

Jeff Cantwell: And in terms of being able to hire them.

Jeff Cantwell: There is some bottlenecks in Onboarding and then once they are on the system their productivity is world class in productivity as industry, beating.

Unnamed Speaker: You know, there's some bottlenecks on onboarding. And then once they're on the system, their productivity is world class. Their productivity is industry beating. So we see some really great productivity and margin expansion as we get more of these experienced loan officers onto the platform and we scale up.

Jeff Cantwell: So we see some really great.

Jeff Cantwell: Productivity and margin expansion as we get more of these experienced loan officers onto the platform when we scale up.

Unnamed Speaker: Okay, great. Thanks, guys.

Speaker Change: Okay, great. Thanks, guys I appreciate it.

Unnamed Speaker: Appreciate it.

Operator: Again, if you would like to ask a question, press star followed by the number one on your telephone keypad.

Unnamed Speaker: Okay, great. Thanks guys. Appreciate it. Again, if you would like to ask a question, press star followed by the number one on your telephone keypad. There are no further questions at this time.

Operator: Again, if you would like to ask a question, press star followed by the number one on your telephone keypad.

Operator: Again, if you would like to ask a question, press star followed by the number one on your telephone keypad. There are no further questions at this time. I will now turn the conference back over to Vishal Garg for closing remarks. Thank you.

Speaker Change: Again, if you would like to ask a question press star followed by the number one on your telephone keypad.

Operator: There are no further questions at this time.

Jeff Cantwell: There are no further questions at this time I will now turn the conference back over to Vishal Garg for closing remarks.

Operator: I will now turn the conference back over to the next slide. We really value your support, and we had a great quarter in terms of growth and expense management, and we look forward to delivering more of the same for our shareholders in the coming quarters ahead.

Vishal Garg: Thank you everyone for joining us. We really value your support, and we had a great quarter in terms of growth and expense management, and we look forward to delivering more of the same for our shareholders in the coming quarters ahead.

Operator: I will now turn the conference back over to the next slide. We really value your support and we had a great quarter in terms of growth and expense management and we look forward to delivering more of the same for our shareholders in the coming quarters ahead.

Vishal Garg: Thank you everyone for joining.

Operator: This concludes today's call. You may now disconnect.

Jeff Cantwell: We really value your support and.

Vishal Garg: We had a great quarter in terms of growth and expense management, and we look forward to delivering more of the same.

Operator: Thank you.

Jeff Cantwell: For our shareholders in the coming quarters, Ed. Thank you.

Operator: Thank you.

Operator: This concludes today's call. You may now distance.

Operator: This concludes today's call. You may now disconnect.

Speaker Change: This concludes today's call you may now disconnect.

Operator: This concludes today's call. You may now distance.

Jeff Cantwell: Okay.

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