Vishal Garg, the founder of Better Home & Finance Holding Co., has reasserted his dominance over the company’s strategic direction following a successful bid to regain control of the board of directors. During a comprehensive shareholder call held on Tuesday afternoon, Garg unveiled a sweeping restructuring plan dubbed “Better 2.0.” This initiative aims to pivot the digital mortgage lender toward profitability through aggressive cost-cutting, an expansion into wholesale and home equity markets, and a potential share repurchase program. The announcement comes just one day after Garg successfully ousted five members of the board through a consent solicitation, effectively ending a two-month leadership dispute that had paralyzed the company’s executive decision-making.
The leadership transition was formalized in a Tuesday filing with the Securities and Exchange Commission (SEC), which confirmed that the board had removed Daniel Lewis as interim CEO, effective October 5. Garg, acting as the sole remaining director following the mass resignations and removals, quickly moved to appoint a new slate of directors, including Bing Gordon, Steven Sarracino, Paula Tuffin, and Nicholas Calamari. While Garg has resumed a central role in the company’s operations, he informed shareholders that a search is underway for a permanent CEO who possesses deep expertise in credit, fintech, and artificial intelligence.
The Path to Better 2.0: Strategic Financial Reengineering
The centerpiece of Garg’s “Better 2.0” presentation was a rigorous financial roadmap designed to achieve break-even status in the near term. Better Home & Finance, which has struggled with significant quarterly losses since its public debut via a Special Purpose Acquisition Company (SPAC) in August 2023, is currently operating with expenses of approximately $65 million per quarter. Garg set a target to reduce these operating costs to $50 million. Simultaneously, the company aims to boost quarterly revenue from its current $50 million range to more than $65 million.
Garg told investors that if the company can meet even half of its goals in either cost reduction or revenue growth, it would reach a financial break-even point. This push for efficiency is necessitated by the broader contraction in the mortgage market, where high interest rates have stifled refinance activity—once the primary driver of Better’s revenue. By streamlining the cost to originate and leveraging proprietary technology, Garg believes the company can survive the current "higher-for-longer" interest rate environment.
To bolster liquidity, the company is moving forward with the sale of its U.K.-based entity, Birmingham Bank. Better recently announced that a buyer consortium had placed 10 million pounds in escrow for the acquisition. Garg estimated that the final sale could release approximately $65 million in cash, depending on the bank’s loan book and operational status. Following the completion of this transaction, which is expected within the next three to four months, Better anticipates having more than $140 million in combined cash reserves. Garg emphasized that this liquidity cushion should negate the need for any additional capital raises over the next 12 months.
A Candid Admission: The Search for Empathy in Leadership
One of the more striking moments of the shareholder call involved Garg’s self-assessment of his leadership style. Garg has been a lightning rod for controversy since December 2021, when he famously fired 900 employees over a Zoom call—an event that led to significant reputational damage and an internal leadership crisis. Addressing his role in the company’s future, Garg admitted that while he is effective at driving business results, he lacks the emotional intelligence traditionally associated with top-tier corporate leadership.
“I think that real leaders are able to lead with empathy while driving results. I’m able to drive results without empathy, and so I can’t be a real leader of the company,” Garg stated. He clarified that while he expects to remain the “face of the company” and a key visionary, the permanent CEO must be someone who can marry operational excellence with a more empathetic management style.
This admission marks a significant shift in tone for Garg, who had previously been criticized by former board members and executives for a management style they characterized as volatile. By acknowledging these shortcomings, Garg appears to be attempting to reassure institutional investors that the "Better 2.0" era will be characterized by a more balanced executive structure, even as he maintains significant influence over the company’s direction.
Expansion into HELOCs and Wholesale Channels
To drive the necessary revenue growth, Better is diversifying its product offerings beyond its traditional direct-to-consumer (DTC) retail mortgage business. A major pillar of this growth strategy is the Home Equity Line of Credit (HELOC) business. As homeowners across the United States sit on record levels of home equity but remain locked into low-interest primary mortgages, the demand for HELOCs has surged. Garg revealed that Better has signed a deal to launch its HELOC products on the Credit Karma platform, a move that provides immediate access to a massive pool of pre-qualified leads.
Furthermore, Garg noted that the company is attempting to revive discussions with five other major "household-name" partners. These negotiations had reportedly stalled during the two-month period when Garg was sidelined from the CEO role and the board was embroiled in internal conflict.
In addition to the HELOC push, Better is pivoting toward the wholesale mortgage market. Historically, the company focused on its internal retail channel and strategic partnerships (such as its previous collaboration with Ally Bank). Under the new plan, Better will operate as a "multi-channel" lender, serving customers through direct, retail, and wholesale avenues. Garg also floated the possibility of allowing multiple retail and wholesale brands to operate on Better’s proprietary Tinman platform, effectively transforming the company into a mortgage marketplace.
Leveraging Artificial Intelligence for Operational Efficiency
The “Better 2.0” strategy relies heavily on the integration of advanced technology to lower production costs. Garg detailed how the company is combining large language models (LLMs) with machine learning and deterministic engines to streamline the mortgage processing funnel. The goal is to bring "lead-to-lock" and "lock-to-fund" conversion rates in line with—or ahead of—industry standards.
According to Garg’s analysis, improving these conversion rates could nearly double the company’s revenue without necessitating a corresponding increase in marketing or headcount costs. By using AI to automate the "stare and compare" tasks typically performed by human underwriters and processors, Better aims to reduce the "cost to originate," which remains one of the highest hurdles for digital lenders in a low-volume market.
Governance and Nasdaq Compliance
The recent board shakeup has left Better with several regulatory hurdles to clear. The removal of five directors and the resignation of Hugh Frater—who had previously vowed to leave if Garg returned to an executive role—triggered a non-compliance issue with Nasdaq’s board requirements regarding independent directors and committee compositions.
Garg informed shareholders that the company has approximately 45 days to submit a formal plan to Nasdaq to address these board-related requirements and a total of 180 days to fully cure the issue. He expressed confidence that the company would successfully recruit additional independent directors to satisfy listing standards. The appointment of Bing Gordon, a well-known venture capitalist and former Amazon board member, and Steven Sarracino, founder of Activant Capital, is seen as an initial step toward rebuilding a board that carries weight with Wall Street.
Timeline of the Leadership Dispute
The current restructuring is the culmination of a tumultuous period that began in August 2024, when the previous board of directors moved to remove Garg from his position as CEO. That decision was reportedly driven by concerns over the company’s financial performance and Garg’s management style. However, Garg, who controls a significant portion of the company’s voting power, launched a consent solicitation to bypass a formal shareholder meeting and remove his detractors from the board.
The dispute led to a period of executive paralysis, which Garg admitted had a tangible impact on the business. “We may have lost one or two [partners] who went and decided to pick someone else,” Garg said, referring to the stalled partnership negotiations. However, he maintained that the company’s pipeline remains "very full" and that the clarity provided by his return to control would allow the company to move forward with "full speed ahead."
Market Implications and Future Outlook
Industry analysts suggest that Garg’s return and the "Better 2.0" plan represent a high-stakes gamble on the future of digital mortgage origination. While the shift toward HELOCs and wholesale lending aligns with current market trends, Better faces stiff competition from established giants like United Wholesale Mortgage (UWM) and Rocket Mortgage, both of which have also invested heavily in technology and multi-channel distribution.
The plan to pursue a share repurchase program "as soon as practical" is an attempt to signal confidence to the market. Better’s stock has traded significantly below its initial SPAC valuation, and Garg argued that the shares are currently undervalued relative to other technology-focused mortgage platforms.
As Better Home & Finance navigates the coming months, the focus will remain on two key metrics: the speed at which it can reduce its quarterly burn rate to $50 million and its ability to secure a permanent CEO who can execute Garg’s vision while mending the company’s fractured corporate culture. With the sale of Birmingham Bank on the horizon and a new board in place, Garg has the mandate he sought—but the window to achieve profitability in a challenging mortgage environment remains narrow.
