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Tech-based mortgage lender Better is hoping to amp up one of its most successful channels for originating loans, by collaborating with Infosys to launch a white-labeled “mortgage-as-a-service” platform for lenders.

While known to many as a direct lender, Better has had a strategic partnership with Ally Bank since 2019 in which Better sells, processes, underwrites and closes the bank’s digital mortgages, while Ally markets, advertises, prices and funds the loans.

Now Better is hoping to power mortgages for more lenders, announcing a partnership Thursday with Infosys, a Bengaluru, India-based digital services and consulting firm that helps mortgage lenders and servicers deploy automation and AI to digitize their processes.

Dennis Gada

“Infosys is a global leader in lending and mortgages,” Infosys executive Dennis Gada said in a statement. “Through our AI-driven operations, we help clients originate loans at significantly lower costs than the industry average. Infosys and Better offer ‘mortgage-as-a-service’ that will allow us to bring to our clients integrated operations and technology with significant productivity benefits.”

A similar partnership between Rocket Mortgage and Q2 Software Inc., announced last year, gives banks or credit unions the ability to “launch, replace or augment” their lineup of home loans by integrating Rocket Mortgage’s digital mortgage application.

According to parent company Ally Financial’s most recent quarterly report to investors, Ally Bank originated $731 million in mortgages in the first nine months of 2023 through its “powered by Better” direct-to-consumer channel.

Glenn Brunker

“Our strategic collaboration with Better helps us deliver best-in-class digital mortgage services to our customers in a highly innovative, scalable and cost-efficient manner,” said Ally Home’s Glenn Brunker in a statement. “Leveraging Better’s digital platform has also helped us limit operational volatility as the mortgage industry continues to evolve in the current interest rate environment.”

Ally is also an investor in Better, although it has written down the carrying value of its ownership stake in Better to $9 million as of Sept. 30, 2023, after the value of Better’s shares plummeted when the company went public.

In its first earnings release as a public company in August, Better revealed that “B2B” (business-to-business) partnerships with companies like Ally Bank and American Express account for nearly half of its mortgage originations.

During the first half of this year, Better originated $748 million in mortgages through its B2B channel, or 43 percent of Better’s total loan production, compared to 37 percent during the same time a year ago.

Although best known as a mortgage lender, as a provider of end-to-end services Better also offers real estate brokerage services, homeowners insurance, title and settlement services, real estate attorney service, and home inspections.

Last week, Better announced a partnership with insurance technology provider Sure and underwriter Toggle (a Farmers Insurance company) to launch its own digital home insurance product, Better Insurance. Better is positioning the product as a faster alternative to other policies offered through the company’s insurance arm, Better Cover.

Since going public in an Aug. 24 special purpose acquisition company (SPAC) merger, shares in Better Home & Finance Holding Company — the parent company of Better Mortgage, Better Real Estate, Better Cover, Better Settlement Services, Better Connect and Better Inspect — have traded for as little as $0.34 and as much as $1.98.

Although Better raised more than $500 million in the merger, shares in the company lost more than 90 percent of their value in their Nasdaq debut, and the company reportedly laid off one-quarter of its U.S. mortgage sales and origination team two weeks later.

Last month, Better informed investors that it faces delisting from the Nasdaq stock exchange after shares in the company fell below the required minimum bid price of $1 per share. Better can regain compliance with the minimum bid price requirement if the stock closes above $1 for 10 consecutive business days on or before April 4, 2024.

Better told investors it “will continue to monitor the closing bid price of its common stock and seek to regain compliance” and is evaluating options including a reverse stock split, which would require shareholder approval.

Better will announce third-quarter earnings on Tuesday, Nov. 14.

Get Inman’s Mortgage Brief Newsletter delivered right to your inbox. A weekly roundup of all the biggest news in the world of mortgages and closings delivered every Wednesday. Click here to subscribe.

Email Matt Carter

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