Better.com posts net loss of $303.8 million in 2021

Better.com posted a net loss of $303.8 million last year and has spent a substantial sum related to its series of layoffs, according to a new financial filing.

The lender spent approximately $74.1 million to $84.1 million primarily in one-time termination benefits to departing employees, it reported in a Securities and Exchange Commission filing this week. The embattled mortgage firm has laid off over a third of its workforce since December in some of the more severe cuts across the industry in response to declining mortgage volumes.

While a representative for Better confirmed the departure of a director, they did not answer questions about future layoffs and a merger date.

The disclosure came in a series of filings by Aurora Acquisition Corp., the special purpose acquisition company which said in the report it expects the merger to be completed in the second quarter of this year. The 2021 losses followed $172.1 million in net income in 2020 amid a surge in refinances.

Better cited increasing interest rates as part of the reason for its net loss, along with internal investments, reorganization of sales and operations teams and negative media coverage following CEO Vishal Garg’s notorious Zoom firing of 900 employees in December. The lender also reported a sizeable decline in gain on sale margin from 3.71% in 2020 to 2.05% in 2021.

Better.com board member Gabrielle Toledano also resigned this month, the filing said, after Better repurchased 11,022 shares of stock for $254,154 to defray taxes associated with vesting of equity awards of the shares. Toledano, a former Tesla executive, received a restricted stock unit award covering 110,113 shares of common stock in 2021, which vest to 1/16 of the shares in June.

A representative for the lender didn’t confirm Wednesday whether Toledano still owns stock in the company but said her resignation wasn’t driven by a disagreement with Better.

Her departure follows two director resignations in January, which the firm said weren’t related to any disagreement with Better.

The company said it had approximately 5,800 workers at the end of March, although it didn’t disclose the number of employees laid off in an April cut. Better isn’t the only mortgage player making cuts in response to a declining market, but it has suffered the biggest public relations hit with snafus over a series of firings. Garg undertook a five week leave of absence following the disastrous December layoffs. The firm is recruiting new executives following an internal culture review.