What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-14 compared with 2024-05-15 · 221 added, 124 removed, 331 unchanged (51% of the section changed)

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(such transactions, the “Business Combination”), and to Better Home & Finance Holding Company and its consolidated subsidiaries after the Closing.

The following discussion and analysis of our financial condition and results of operations should be read together with our audited consolidated financial statements as of December 31, 2023 and for the years ended December 31, 2023 and 2022, in each case, together with related notes thereto, included in our 2023 Annual Report on Form 10-K, and our condensed consolidated financial statements and related notes as of and for the quarterly period ended March 31, 2024, included elsewhere in this quarterly report on Form 10-Q.

The following discussion and analysis of our financial condition and results of operations should be read together with our audited consolidated financial statements as of December 31, 2023 and for the years ended December 31, 2023 and 2022, in each case, together with related notes thereto, included in our 2023 Annual Report on Form 10-K, and our condensed consolidated financial statements and related notes as of and for the quarterly period ended June 30, 2024, included elsewhere in this quarterly report on Form 10-Q.

In addition to historical financial information, the following discussion and analysis may contain forward-looking statements within the meaning of federal securities laws that involve risks, uncertainties and assumptions.

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We generate revenue through the production and sale of loans and other product offerings through our platform.

The revenue and mix of revenue as a percentage of total revenue attributable to our sale of loan production (Gain on loans, net)

and Better Plus (Other revenue) for the three months ended March 31, 2024 and 2023 is as follows:

Three Months Ended March 31,

The revenue and mix of revenue as a percentage of total revenue attributable to our sale of loan production (Gain on loans, net) and Better Plus (Other revenue) and net interest income for the three and six months ended June 30, 2024 and 2023 is as follows:

Three Months Ended June 30,

(Amounts in thousands, except percentage amounts)

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Other revenue 2,881 9 % 4,711 15 %

Net interest income/(loss) 5,152 17 % (41) — %

Total net revenues

Six Months Ended June 30,

(Amounts in thousands, except percentage amounts)

Gain on loans, net $ 39,881 73 % $ 39,187 79 %

Other revenue 5,698 10 % 9,655 19 %

Net interest income 8,934 15 % 880 2 %

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For loans subsequently sold to our loan purchaser network, the partner receives a portion of the sale proceeds.

Although we aim to expand our B2B relationships, as of March 31, 2024, this channel was primarily comprised of our integrated relationship with Ally Bank (which is our only current integrated relationship).

Although we aim to expand our B2B relationships, as of June 30, 2024, this channel was primarily comprised of our integrated relationship with Ally Bank (which is our only current integrated relationship).

Better Plus Model—Other revenue

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International Lending Revenue—Other revenue

International lending revenue consists of revenue from our international lending activities, namely in the U.K., which has expanded via acquisitions in prior years.

International lending revenue consists of revenue from our international lending activities, primarily in the U.K., which has expanded via acquisitions in prior years.

International lending activities primarily include broker fees earned via our digital mortgage broker in the U.K.

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Key Business Metric

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Funded Loan Volume

$ 962 $ 912 $ 1,623 $ 1,758

Refinance Loan Volume

$ 77 $ 61 $ 159 $ 131

Purchase Loan Volume

HELOC Volume $ 51 $ 2

$ 794 $ 842 $ 1,323 $ 1,617

HELOC Loan Volume $ 90 $ 9 $ 142 $ 11

D2C Loan Volume

$ 670 $ 522 $ 1,030 $ 1,009

B2B Loan Volume

$ 292 $ 390 $ 594 $ 749

Total Loans (number of loans, not millions)

2,995 2,516 4,986 4,882

Average Loan Amount ($ value, not millions)

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Total Market Share

0.2 % 0.2 % 0.2 % 0.2 %

Better Real Estate Transaction Volume

$ 105 $ 191 $ 161 $ 352

Insurance Coverage Written

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Funded Loan Volume represents the aggregate dollar amount of all loans funded in a given period based on the principal amount of the loan at funding.

Our Funded Loan Volume of $661 million in the three months ended March 31, 2024 decreased by approximately 22% from $847 million in the three months ended March 31, 2023.

Beginning in the third quarter of 2023, we also include HELOC loans in our Funded Loan Volume.

For the three months ended March 31, 2024, purchase and refinance loans comprised $610 million and HELOC loans comprised $51 million of Funded Loan Volume.

Our Funded Loan Volume of $962 million in the three months ended June 30, 2024 increased by approximately 5% from $912 million in the three months ended June 30, 2023.

Our Funded Loan Volume decreased by approximately 8% period-over-period to $1,623 million in the six months ended June 30, 2024 from $1,758 in the six months ended June 30, 2023.

Beginning in the third quarter of 2023, we also include HELOC and closed-end second lien loans in our Funded Loan Volume.

For the three months ended June 30, 2024, purchase and refinance loans comprised $872 million and HELOC and closed-end second lien loans comprised $90 million of Funded Loan Volume.

For the six months ended June 30, 2024 purchase and refinance loans comprised $1,482 million while HELOC and closed-end second lien loans comprised $142 million of Funded Loan Volume.

Refinance Loan Volume represents the aggregate dollar amount of refinance loans funded in a given period based on the principal amount of the loan at refinancing date.

Our Refinance Loan Volume of $81 million in the three months ended March 31, 2024 increased by approximately 16% from $70 million in the three months ended March 31, 2023.

Our Refinance Loan Volume of $77 million in the three months ended June 30, 2024 increased by approximately 26% from $61 million in the three months ended June 30, 2023.

Our Refinance Loan Volume increased by approximately 21% year-over-year to $159 million in the six months ended June 30, 2024 from $131 million in the six months ended June 30, 2023.

Purchase Loan Volume represents the aggregate dollar amount of purchase loans funded in a given period based on the principal amount of the loan at purchase date.

Our Purchase Loan Volume decreased by approximately 32% year-over-year to $529 million in the three months ended March 31, 2024 from $775 million in the three months ended March 31, 2023.

HELOC Loan Volume represents the aggregate dollar amount of HELOC loans funded in a given period based on the principal amount of the loan at funding.

The HELOC product was launched during the first half of 2023.

Our HELOC Loan volume increased to $51 million in the three months ended March 31, 2024 from $2 million in the three months ended March 31, 2023.

Our Purchase Loan Volume decreased by approximately 6% year-over-year to $794 million in the three months ended June 30, 2024 from $842 million in the three months ended June 30, 2023.

Our Purchase Loan Volume decreased by approximately 18% year-over-year to $1,323 million in the six months ended June 30, 2024 from $1,617 million in the six months ended June 30, 2023.

HELOC Loan Volume represents the aggregate dollar amount of HELOC and closed-end second lien loans funded in a given period based on the principal amount of the loan at funding.

The HELOC product was launched during the first half of 2023, and the closed-end second lien product was launched towards the end of 2023, with volume becoming material in the first half of 2024.

Our HELOC Loan Volume increased to $90 million in the three months ended June 30, 2024 from $9 million in the three months ended June 30, 2023.

Our HELOC Loan Volume increased to $142 million in the six months ended June 30, 2024 from $11 million in the six months ended June 30, 2023.

D2C Loan Volume represents the aggregate dollar amount of loans funded in a given period based on the principal amount of the loan at funding that have been generated from direct interactions with customers using all marketing channels other than our B2B partner relationships.

Our D2C Loan Volume of $360 million in the three months ended March 31, 2024 decreased by approximately 26% from $488 million in the three months ended March 31, 2023.

Our D2C Loan Volume of $670 million in the three months ended June 30, 2024 increased by approximately 28% from $522 million in the three months ended June 30, 2023.

Our D2C Loan Volume of $1,030 million in the six months ended June 30, 2024 increased by approximately 2% year-over-year from $1,009 million in the six months ended June 30, 2023.

B2B Loan Volume represents the aggregate dollar amount of loans funded in a given period based on the principal amount of the loan at funding that have been generated through one of our B2B partner relationships.

Our B2B Loan Volume of $301 million in the three months ended March 31, 2024 decreased by approximately 16% from $359 million in the three months ended March 31, 2023 .

Total Loans represents the total number of loans funded in a given period, including purchase loans, refinance loans and HELOC loans.

Our Total Loans of 1,991 in the three months ended March 31, 2024 decreased by approximately 16% from 2,366 in the three months ended March 31, 2023.

Purchase and refinance loans comprised 1,557 of the Total Loans in the three months ended March 31, 2024 and HELOC loans comprised 434.

Average days loans held for sale for the three months ended March 31, 2024 and 2023, were approximately 20 and 20 , respectively.

Our B2B Loan Volume of $292 million in the three months ended June 30, 2024 decreased by approximately 25% from $390 million in the three months ended June 30, 2023.

Our B2B Loan Volume of $594 million in the six months ended June 30, 2024 decreased by approximately 21% year-over-year from $749 million in the six months ended June 30, 2023.

Total Loans represents the total number of loans funded in a given period, including purchase loans, refinance loans, HELOC loans and closed-end second lien loans.

Our Total Loans of 2,995 in the three months ended June 30, 2024 increased by approximately 19% from 2,516 in the three months ended June 30, 2023.

Our Total Loans of 4,986 in the six months ended June 30, 2024 increased by approximately 2% year-over-year from 4,882 in the six months ended June 30, 2023.

Purchase and refinance loans comprised 2,134 of the Total Loans in the three months ended June 30, 2024, while HELOC and closed-end second lien loans comprised 861.

Purchase and refinance loans comprised 3,691 of the Total Loans in the six months ended June 30, 2024, while HELOC and closed-end second lien loans comprised 1,295.

Average days loans held for sale, excluding Company-funded LHFS and Company-funded HELOC, for the three months ended June 30, 2024 and 2023, were approximately 20 and 23, respectively.

Average days loans held for sale, excluding Company-funded LHFS and Company-funded HELOC, for the six months ended June 30, 2024 and 2023, were approximately 22 and 23, respectively.

This is defined as the average days between funding and sale for loans funded during each period.

As of each such reporting date, we had an immaterial amount of loans either 90 days past due or non-performing, as we generally aim to sell loans shortly after production.

Average Loan Amount represents Total Funded Loan Volume divided by number of loans funded in a period.

Our Average Loan Amount decreased by approximately 7% to $332,111 in the three months ended March 31, 2024 from $357,792 in the three months ended March 31, 2023 .

In general, HELOC loans have lower average loan amounts than purchase or refinance loans, and therefore Average Loan Amount has decreased as a result of HELOC growth in 2023 and the three months ended March 31, 2024 .

Average Loan Amount represents Funded Loan Volume divided by Total Loans in a period.

Our Average Loan Amount decreased by approximately 11% to $321,178 in the three months ended June 30, 2024 from $362,424 in the three months ended June 30, 2023 and decreased approximately 10% year-over-year to $325,544 during the six months ended June 30, 2024 from $360,179 in the six months ended June 30, 2023.

In general, HELOC and closed-end second lien loans have lower average loan amounts than purchase or refinance loans, and therefore Average Loan Amount has decreased as a result of HELOC and closed-end second lien growth.

Gain on Sale Margin represents gain on loans, net, as presented on our condensed consolidated statements of operations and comprehensive income (loss), divided by Funded Loan Volume.

Gain on Sale Margin increased by approximately 57% to 2.37% during the three months ended March 31, 2024 from 1.51% year-over-year from the three months ended March 31, 2023 .

We saw an increase in our Gain on Sale Margin for three months ended March 31, 2024 compared to three months ended March 31, 2023, as a result of a recovery on our Loan Repurchase Reserve which positively impacted our Gain on Loans, net, as well as improved pricing on our Funded Loans.

Total Market Share represents Funded Loan Volume in a period divided by total value of loans funded in the industry for the sam e period, as presented by FNMA.

Our Total Market Share of 0.2% during the three months ended March 31, 2024 remained substantially the same as 0.3% in the three months ended March 31, 2023.

The mortgage market remains competitive among lenders, given the interest rate environment and we continue to focus on originating the most profitable business available to us.

As a result, we have pulled back on our most unprofitable channels, resulting in further declines to market share.

Gain on Sale Margin decreased by approximately 38 basis points to 2.52% during the three months ended June 30, 2024 from 2.90% for the three months ended June 30, 2023.

We saw a decrease in our Gain on Sale Margin for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, as a result of a positive mark-to-market impact on the loans that we have repurchased, as part of our loan repurchase obligations, and held during the second quarter of 2023 that was not present in the second quarter of 2024.

Offsetting this was a benefit in the second quarter of 2024 resulting from a positive mark-to-market impact on our IRLCs.

Gain on Sale Margin increased by approximately 23 basis points to 2.46% for the six months ended June 30, 2024 from 2.23% for the six months ended June 30, 2023 as a result of increased recovery on our loan repurchase reserve which positively impacted our gain on loans, net, as well as improved pricing on our loans.

Total Market Share represents Funded Loan Volume in a period divided by total value of loans funded in the industry for the same period, as presented by FNMA.

Our Total Market Share of 0.2% during the three months ended June 30, 2024 remained substantially the same as 0.2% in the three months ended June 30, 2023.

Our Total Market Share of

0.2% for the six months ended June 30, 2024 remained substantially the same year-over-year from 0.2% for the six months ended June 30, 2023.

While we are leaning into growth and have seen an increase in our Total Loans and Funded Loan Volume for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, the total value of loans funded in the industry has also increased and the mortgage market remains competitive among lenders, given the interest rate environment, resulting in relatively flat market share on a percentage basis.

We continue to focus on originating the most profitable business available to us and seek to avoid growing through highly unprofitable channels.

Better Real Estate Transaction Volume represents the aggregate dollar amount of real estate volume transacted in a given period across both in-house agents and third-party network agents.

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This includes the value of the loan for lender’s title insurance and dwelling coverage for homeowners insurance.

Coverage Written amounts for Better Cover have been updated for all periods presented to includes both new policies and policy renewals, which in prior periods included only new policies.

Insurance Coverage Written amounts for Better Cover have been updated for all periods presented to include both new policies and policy renewals, which in prior periods included only new policies.

Description of Certain Components of Our Financial Data

Components of Revenue

Our sources of revenue include gain on loans, net, net interest income, and other revenue.

Our sources of revenue include gain on loans, net,, other revenue, and net interest income.

Home Finance (Gain on Loans, Net)

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Gain on sale of loans, net includes unrealized changes in the fair value of mortgage loans held for sale (“LHFS”), which are recognized on a loan-by-loan basis as part of current period earnings until the loan is sold on the secondary market.

The fair value

of LHFS is measured based on observable market data.

The fair value of LHFS is measured based on observable market data.

This also includes activity for loans originated on behalf of the integrated partnership that are subsequently purchased by us as well the portion of the sale proceeds to be received by the integrated partner.

The portion of the sale proceeds that is to be allocated to the integrated partner is accrued as a reduction of gain on sale of loans, net when the loan is initially purchased by us from the integrated relationship partner.

Gain on sale of loans, net also includes the changes in fair value of interest rate lock commitments (“IRLCs”) and forward sale commitments.

Gain on sale of loans, net also includes the changes in fair value of IRLCs and forward sale commitments.

IRLCs include the fair value upon issuance with subsequent changes in the fair value recorded in each reporting period until the loan is sold on the secondary market.

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The provision for loan repurchase reserve, represents the charge for these potential losses.

Net Interest Income

Net interest income includes interest income from LHFS calculated based on the note rate of the respective loan, interest income from short-term investments, and interest income on loans held for investment.

Interest expense includes interest expense on warehouse lines of credit, interest expense on customer deposits, as well as interest expense on the Convertible Note.

Better Plus, International Lending Revenue, and Other (Other Revenue)

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For international lending revenue, we generate revenue primarily from broker fees earned via our digital mortgage broker in the U.K.

Net Interest Income

Net interest income includes interest income from LHFS, including HELOCs, calculated based on the note rate of the respective loan, interest income from short-term investments, and interest income on loans held for investment.

Interest expense includes interest expense on warehouse lines of credit, interest expense on customer deposits, as well as interest expense on convertible note, a senior subordinated convertible note in the aggregate principal amount of $528.6 million issued to SB Northstar LP (the “Convertible Note”).

Components of Our Expenses

Our expenses consist of compensation and benefits, general and administrative, technology expenses, marketing and advertising expenses, loan origination expenses, depreciation and amortization, and other expenses.

Compensation and Benefits

Compensation and benefits includes salaries, wages, and incentive pay as well as stock compensation, employee health benefits, 401(k) plan benefits, and social security and unemployment taxes.

Compensation and Benefits Expenses

Compensation and benefits expenses includes salaries, wages, and incentive pay as well as stock compensation, employee health benefits, 401(k) plan benefits, and social security and unemployment taxes.

Stock-based compensation includes expenses associated with restricted stock unit grants, performance stock unit grants, and stock option grants under our stock plans.

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The following table sets forth certain consolidated financial data for each of the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands, except per share amounts)

2024 2023 2024 2023

Gain on loans, net $ 24,229 $ 26,425 $ 39,881 $ 39,187

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Interest expense (4,245) (7,615) (9,099) (13,084)

Net interest income 3,782 921

Net interest income/(loss) 5,152 (41) 8,934 880

Total net revenues

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Depreciation and amortization 7,990 10,822 17,064 22,299

Other expenses (183) 11,065

Other expenses/(Income) (879) (537) (1,062) 10,527

Total expenses

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203 456 346 1,880

$ (41,365) $ (44,010) $ (92,857) $ (131,632)

Earnings (loss) per share attributable to common stockholders (Basic)

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$ (0.05) $ (0.15) $ (0.12) $ (0.44)

Three Months Ended March 31, 2024 as Compared to Three Months Ended March 31, 2023

Three and Six Months Ended June 30, 2024 as Compared to Three and Six Months Ended June 30, 2023

The components of our revenues for the period were:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands)

2024 2023 2024 2023

Gain on loans, net 24,229 26,425 39,881 39,187

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Interest income 9,397 7,574 18,033 13,964

Mortgage interest expense (4,854) (5,469)

Interest expense (4,245) (7,615) (9,099) (13,084)

Net interest income 5,152 (41) 8,934 — 880

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The components of our gain on loans, net for the period were:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands)

2024 2023 2024 2023

Gain on sale of loans, net $ 18,374 $ 20,697 $ 28,195 $ 33,221

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Total gain on loans, net $ 24,229 $ 26,425 $ 39,881 $ 39,187

Gain on sale of loans, net decreased $2.7 million or 22% to $9.8 million for the three months ended March 31, 2024 compared to $12.5 million for the three months ended March 31, 2023.

The decrease in gain on sale of loans, net was largely driven by the reduction of Funded Loan Volume.

Integrated partnership fees decreased $0.1 million, or 4% to a gain of $2.3 million for the three months ended March 31, 2024, compared to gain of $2.4 million for the three months ended March 31, 2023.

Gain on sale of loans, net decreased $2.3 million or 11% to $18.4 million for the three months ended June 30, 2024 compared to $20.7 million for the three months ended June 30, 2023.

The decrease was largely driven by a positive mark-to-market impact on loans that we have repurchased, as part of our loan repurchase obligations, and held during the three months ended June 30, 2023, which were not present during the three months ended June 30, 2024.

Offsetting this was a benefit during the three months ended June 30, 2024 resulting from a positive mark-to-market impact on our IRLCs.

Gain on sale of loans, net decreased $5.0 million or 15% to $28.2 million for the six months ended June 30, 2024 compared to $33.2 million for the six months ended June 30, 2023.

The decrease was largely driven by a positive mark-to-market impact on loans that we have repurchased, as part of our loan repurchase obligations, and held during the six months ended June 30, 2023, which were not present during the six months ended June 30, 2024.

Offsetting this was a benefit due to the increase in HELOC volume and a positive mark-to-market impact on our IRLCs during the six months ended June 30, 2024.

Integrated partnership fees decreased $0.4 million, or 15% to a gain of $2.5 million for the three months ended June 30, 2024, compared to gain of $2.9 million for the three months ended June 30, 2023.

The decrease in integrated partnership fees was primarily driven by the reduction in B2B Loan Volume.

Loan repurchase reserve decreased $5.7 million or 268%, to a recovery of $3.6 million for the three months ended March 31, 2024, compared to a provision of $2.1 million for the three months ended March 31, 2023.

The loan repurchase reserve changed from a provision to a recovery as our estimate for potential loss exposure has decreased as we no longer have exposure to the historical periods when we had a significantly higher funded loan volume.

Integrated partnership fees decreased $0.5 million, or 10% to a gain of $4.7 million for the six months ended June 30, 2024, compared to gain of $5.3 million for the six months ended June 30, 2023.

The decrease in integrated partnership fees was primarily driven by the reduction in B2B Loan Volume.

Loan repurchase reserve decreased $0.6 million or 20%, to a recovery of $3.4 million for the three months ended June 30, 2024, compared to a recovery of $2.8 million for the three months ended June 30, 2023.

The loan repurchase reserve has decreased as our estimate for potential loss exposure has declined as we no longer have exposure to the historical periods when we had a significantly higher funded loan volume.

The reduction in potential loss exposure results in a reduction in the loan repurchase reserve liability, which is recognized as a recovery within gain on loans, net.

Loan repurchase reserve increased $6.3 million or 909%, to a recovery of $6.9 million for the six months ended June 30, 2024, compared to a recovery of $0.7 million for the six months ended June 30, 2023.

The reduction in potential loss exposure results in a reduction in the loan repurchase reserve liability, which is recognized as a recovery within gain on loans, net.

Other Revenue

The components of other revenue for the period were:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands) 2024 2023 2024 2023

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Total other revenue $ 2,881 $ 4,711 $ 5,698 $ 9,655

International lending revenue increased $0.1 million, or 12% to $1.1 million for the three months ended March 31, 2024 compared to $1.0 million for the three months ended March 31, 2023.

The increase in international lending revenue was primarily driven by increased operations in U.K.

International lending revenue increased $0.5 million, or 79% to $1.2 million for the three months ended June 30, 2024 compared to $0.7 million for the three months ended June 30, 2023.

The increase in international lending revenue was primarily driven by increased operations in the U.K.

brokerage businesses.

Insurance services remained relatively flat for both the three months ended March 31, 2024 and three months ended March 31, 2023.

While Insurance Coverage Written decreased due to fewer insurance transactions, increasing insurance premium costs and more competitive referral revenue sharing agreements with insurance carries resulted in increased revenue per transaction.

Real estate services decreased $2.5 million, or 88% to $0.3 million for the three months ended March 31, 2024 compared to $2.9 million for the three months ended March 31, 2023.

The decrease in real estate services was primarily driven by a reduction in volume of real estate transactions as well earning lower revenue per transaction for the three months ended March 31, 2024 as we no longer employed any in-house real estate agents and all activity was through our network of third party real estate agents which results in lower revenue per transaction.

Other revenue increased by $0.3 million, or 58% to $0.7 million for the three months ended March 31, 2024 compared to $0.5 million for the three months ended March 31, 2023.

International lending revenue increased $0.7 million, or 40% to $2.3 million for the six months ended June 30, 2024 compared to $1.7 million for the six months ended June 30, 2023.

The increase in international lending revenue was primarily driven by increased operations in the U.K.

brokerage businesses.

Insurance services revenue decreased $0.7 million, or 55% to $0.5 million for the three months ended June 30, 2024 compared to $1.2 million for the three months ended June 30, 2023.

The decrease in insurance services revenue was primarily driven by a decrease in Insurance Coverage Written due to fewer insurance transactions.

Insurance services decreased $0.6 million, or 36% to $1.2 million for the six months ended June 30, 2024 compared to $1.8 million for the six months ended June 30, 2023.

The decrease in insurance services revenue was primarily driven by a decrease in Insurance Coverage Written due to fewer insurance transactions.

Real estate services decreased $2.3 million, or 78% to $0.7 million for the three months ended June 30, 2024 compared to $3.0 million for the three months ended June 30, 2023.

The decrease in real estate services revenue was primarily driven by a reduction in volume of real estate transactions as well earning lower revenue per transaction for the three months ended June 30, 2024 as we no longer employed any in-house real estate agents and all activity was through our network of third party real estate agents, which results in lower revenue per transaction.

Real estate services decreased $4.9 million, or 83% to $1.0 million for the six months ended June 30, 2024 compared to $5.9 million for the six months ended June 30, 2023.

The decrease in real estate services was primarily driven by a reduction in volume of real estate transactions as well earning lower revenue per transaction for the six months ended June 30, 2023 as we no longer employed any in-house real estate agents and all activity was through our network of third party real estate agents, which results in lower revenue per transaction.

Other revenue increased by $0.6 million, or 391% to $0.5 million for the three months ended June 30, 2024 compared to a loss of $0.2 million for the three months ended June 30, 2023.

The increase in other revenue was primarily driven by mortgage and non-mortgage loan servicing activities in the U.S.

Other revenue increased by $0.9 million, or 305% to $1.2 million for the six months ended June 30, 2024 compared to $0.3 million for the six months ended June 30, 2023.

The increase in other revenue was primarily driven by mortgage and non-mortgage loan servicing activities in the U.S.

Net Interest Income

The components of our net interest income for the period were:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands) 2024 2023 2024 2023

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Total net interest income $ 5,152 $ (41) $ 8,934 $ 880

Mortgage interest income decreased $0.9 million, or 24% to $3.0 million for the three months ended March 31, 2024 compared from $3.9 million of the three months ended March 31, 2023.

The decrease in mortgage interest income was primarily driven by the decrease in origination volume and the mortgage interest income earned on the unpaid principal balance for loans held and serviced during the interim between the origination of the loan and its sale on the secondary market.

Interest income from investment increased $3.2 million, or 130% to $5.7 million for the three months ended March 31, 2024 compared to $2.5 million for the three months ended March 31, 2023.

The increase in interest income from investment was primarily driven by increased investments in securities with maturities ranging from 90 days to 1 year, driven by our cash management strategies and increased available liquidity.

Warehouse interest expense decreased $0.6 million, or 21% to $2.2 million for the three months ended March 31, 2024 compared to $2.8 million for the three months ended March 31, 2023.

The decrease in warehouse interest expense was primarily driven by decreased borrowings on funding facilities used in the mortgage production process to meet the decreased origination volume.

Other interest expense remained flat at $2.7 million for the three months ended March 31, 2024 compared to $2.7 million for the three months ended March 31, 2023.

Other interest expense for the three months ended March 31, 2024 is related to interest expense on our convertible notes while interest expense for the three months ended March 31, 2023 is related to interest expense on our corporate line of credit which was subsequently paid off in full in August 2023.

Mortgage interest income decreased $0.3 million, or 7% to $4.5 million for the three months ended June 30, 2024 compared from $4.8 million of the three months ended June 30, 2023.

Although the number of loans funded increased for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, the increase was primarily at the end of the quarter generating less interest income due to timing.

Mortgage interest income decreased $1.3 million, or 15% to $7.4 million for the six months ended June 30, 2024 compared from $8.7 million of the six months ended June 30, 2023.

Although the number of loans funded increased for the three months ended June 30, 2024 compared to the six months ended June 30, 2023, the increase was primarily at the end of the quarter generating less interest income due to timing.

Interest income from investments increased $2.2 million, or 78% to $4.9 million for the three months ended June 30, 2024 compared to $2.8 million for the three months ended June 30, 2023.

The increase in interest income from investments was primarily driven by increased investments in securities with maturities ranging from 90 days to 1 year, driven by our cash management strategies and increased available liquidity resulting from the capital raised in August 2023 through the closing of the Business Combination.

Interest income from investments increased $5.4 million, or 102% to $10.6 million for the six months ended June 30, 2024 compared to $5.2 million for the six months ended June 30, 2023.

Warehouse interest expense decreased $1.4 million, or 36% to $2.6 million for the three months ended June 30, 2024 compared to $4.0 million for the three months ended June 30, 2023.

The decrease in warehouse interest expense was primarily driven by carrying a lower average warehouse balance over the three months ended June 30, 2024 compared to three months ended June 30, 2023.

We ramped up significantly our HELOC loan product in the second quarter of 2024, which are funded from the Company’s cash balance and not our warehouse lines of credit.

Warehouse interest expense decreased $2.0 million, or 30% to $4.8 million for the six months ended June 30, 2024 compared to $6.8 million for the six months ended June 30, 2023.

The decrease in warehouse interest expense was primarily driven by carrying a lower average warehouse balance over the six months ended June 30, 2024 compared to six months ended June 30, 2023.

We ramped up significantly our HELOC loan product in the second quarter of 2024, which are funded from the Company’s cash balance and not our warehouse lines of credit.

Other interest expense decreased $1.9 million, or 54% to $1.7 million for the three months ended June 30, 2024 compared to $3.6 million for the three months ended June 30, 2023.

Other interest expense for the three months ended June 30, 2024 is related to interest expense on the Convertible Note, which is at a lower interest rate, while interest expense for the three months ended June 30, 2023 is related to interest expense on our corporate line of credit, which was at a higher interest rate and was subsequently paid off in full in August 2023.

Other interest expense decreased $2.0 million, or 31% to $4.3 million for the six months ended June 30, 2024 compared to $6.3 million for the six months ended June 30, 2023.

Other interest expense for the six months ended June 30, 2024 is related to interest expense on the Convertible Note, which is at a lower interest rate, while interest expense for the

six months ended June 30, 2023 is related to interest expense on our corporate line of credit, which was at a higher interest rate and was subsequently paid off in full in August 2023.

The components of our expenses for the period were:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands)

2024 2023 2024 2023

Compensation and benefits 35,254 33,996 73,327 72,108

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Depreciation and amortization 7,990 10,822 17,064 22,299

Other expenses (183) 11,065

Other expenses/(Income) (879) (537) (1,062) 10,527

Total operating expenses

$ 73,424 $ 74,649 $ 147,024 $ 179,474

Compensation and benefits expenses were $38.1 million for the three months ended March 31, 2024, remaining relatively flat in total compared with $38.1 million for the three months ended March 31, 2023.

We reduced our headcount

between the two periods which lead to a decrease in compensation and benefits that was offset by an increase in stock based compensation.

The increase in stock based compensation during the three months ended March 31, 2024 was due to awards that have met the liquidity event criteria with the Closing of the Business Combination in August 2023 as well as service based conditions during the three months ended March 31, 2024.

General and administrative expenses were $14.0 million for the three months ended March 31, 2024, a decrease of $2.7 million or 16% as compared with $16.8 million in the three months ended March 31, 2023.

The decrease in general and administrative expenses was driven primarily by decreases in rent and occupancy expenses, as we have taken measures to reduce our real estate footprint, as well as reductions in professional services.

The reductions in professional services are driven by a reduction in legal expenses as we were incurring higher legal expenses leading up to the Closing of the Business Combination for the three months ended March 31, 2023 in comparison to the three months ended March 31, 2024.

Compensation and benefits expenses were $35.3 million for the three months ended June 30, 2024, an increase of $1.3 million or 4% as compared with $34.0 million for the three months ended June 30, 2023.

We reduced our headcount between the two periods, which lead to a decrease in compensation and benefits that was offset by an increase in stock based compensation.

The increase in stock based compensation during the three months ended June 30, 2024 was due to awards that have met the liquidity event criteria with the Closing of the Business Combination in August 2023 as well as service based conditions during the three months ended June 30, 2024.

Compensation and benefits expenses were $73.3 million for the six months ended June 30, 2024, an increase of $1.2 million or 2% as compared with $72.1 million for the six months ended June 30, 2023.

We reduced our headcount between the two periods, which lead to a decrease in compensation and benefits that was offset by an increase in stock based compensation.

The increase in stock based compensation during the six months ended June 30, 2024 was due to awards that have met the liquidity event criteria with the Closing of the Business Combination in August 2023 as well as service based conditions during the six months ended June 30, 2023.

General and administrative expenses were $15.2 million for the three months ended June 30, 2024, an increase of $2.4 million or 19% as compared with $12.7 million in the three months ended June 30, 2023.

The increase in general and administrative expenses was driven primarily by increases in insurance expenses due to the Closing of the Business Combination as insurance premiums for public companies are significantly higher than those of private companies.

The increase in general and administrative expenses was partially offset by reductions in our rent and occupancy expenses as we have decreased our real estate footprint in the prior year.

General and administrative expenses were $29.2 million for the six months ended June 30, 2024, a decrease of $0.3 million or 1% as compared with $29.5 million in the six months ended June 30, 2023.

The reductions in professional services are driven by a reduction in legal expenses as we were incurring higher legal expenses leading up to the Closing of the Business Combination for the six months ended June 30, 2023 in comparison to the six months ended June 30, 2024.

The decreases in general and administrative expenses were offset by increases in insurance expenses due to the Closing of the Business Combination as insurance premiums for public companies are significantly higher than those of private companies.

Technology expenses were $5.5 million for the three months ended March 31, 2024, a decrease of $9.0 million or 62% as compared with $14.4 million in the three months ended March 31, 2023.

Technology expenses were $6.6 million for the three months ended June 30, 2024, a decrease of $4.6 million or 41% as compared with $11.2 million in the three months ended June 30, 2023.

The decrease in technology expenses were driven primarily by a reduction in costs associated with software vendors.

This was driven by the reduced headcount, due to which we required fewer software licenses, replacement of certain vendors with more cost efficient alternatives, as well as the termination of non-critical vendors.

Marketing and advertising expenses were $4.6 million for the three months ended March 31, 2024, a decrease of $3.2 million or 41% as compared with $7.8 million in the three months ended March 31, 2023.

Substantially all of the decrease in marketing and advertising expenses was driven by decreases in customer acquisition-related expenses, as our lower origination volume resulted in less required customer acquisition spend in the aggregate.

Other expenses were $0.2 million for the three months ended March 31, 2024, a decrease of $11.2 million or 102%, as compared with $11.1 million in the three months ended March 31, 2023.

The reduction in other expenses was primarily driven by a reduction in restructuring expenses, as for the three months ended March 31, 2023 we incurred real estate restructuring losses, gain on lease settlement, and impairments of property and equipment related to restructuring initiatives which we did not have during the three months ended March 31, 2024.

The reduction in other expenses was also driven by reductions on liability classified warrants and equity related liabilities as a result of the reduced trading price of our common stock, which are recorded as gains during the three months ended March 31, 2024.

During the the three months ended March 31, 2023 we recognized losses on the change in fair value of bifurcated derivative which was an embedded feature in the subordinated 0% bridge promissory notes that converted into or were exchanged for Class A common stock and Class C common stock, par value $0.0001 per share (“Class C common stock” and, together with Class A common stock and Class B common stock, the "Common Stock") upon the close of the Business Combination.

Technology expenses were $12.0 million for the six months ended June 30, 2024, a decrease of $13.6 million or 53% as compared with $25.6 million in the six months ended June 30, 2023.

The decrease in technology expenses were driven primarily by a reduction in costs associated with software vendors.

Marketing and advertising expenses were $8.5 million for the three months ended June 30, 2024, an increase of $5.4 million or 175% as compared with $3.1 million in the three months ended June 30, 2023.

The increase is due to a focus on growth to drive volume which started at the end of the first quarter in 2024.

Marketing and advertising is composed of performance advertising and pilot marketing, which performance advertising scales with volume through existing channels while pilot marketing is market spend to test new channels along with testing brand marketing, which generally costs more upfront.

Marketing and advertising expenses were $13.1 million for the six months ended June 30, 2024, an increase of $2.2 million or 20% as compared with $10.9 million in the six months ended June 30, 2023.

The increase is due to a focus on growth to drive volume which started at the end of the first quarter in 2024.

Loan origination expenses were $0.8 million for the three months ended June 30, 2024, and decrease of $2.6 million or 77%, as compared with $3.4 million in the three months ended June 30, 2023.

The decrease in loan origination expenses driven by a reduction in costs associated with loan origination vendors, as well as a decrease in non-HELOC origination volume, and a reduction in our reserve for potential TRID defects.

Loan origination expenses were $3.4 million for the six months ended June 30, 2024, and decrease of $5.2 million or 61%, as compared with $8.6 million in the six months ended June 30, 2023.

The decrease in loan origination expenses was driven by a reduction in costs associated with loan origination vendors.

Other expenses was a gain of $0.9 million for the three months ended June 30, 2024, an increase of $0.3 million or 64%, as compared with a gain of $0.5 million in the three months ended June 30, 2023.

The change in other expenses was primarily driven by reductions on liability classified warrants and equity related liabilities as a result of the reduced trading price of our Common Stock, which were recorded as gains during the three months ended June 30, 2023, while during the three months ended June 30, 2024 our liability classified warrants and equity related liabilities remained relatively flat.

Other expenses was a gain of $1.1 million for the six months ended June 30, 2024, a decrease of $11.6 million or 110%, as compared with $10.5 million in the six months ended June 30, 2023.

The reduction in other expenses was primarily driven by a reduction in restructuring expenses, as for the six months ended June 30, 2023 we incurred real estate restructuring losses, gain on lease settlement, and impairments of property and equipment related to restructuring initiatives which we did not have during the six months ended June 30, 2024.

The reduction in other expenses was also driven by reductions on liability classified warrants and equity related liabilities as a result of the reduced trading price of our Common Stock, which were recorded as gains during the six months ended June 30, 2023, while during the three months ended June 30, 2024 we recorded small gains on our liability classified warrants and equity related liabilities as our stock price stabilized.

Non-GAAP Financial Measures

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We include reconciliations of Adjusted Net Loss and Adjusted EBITDA to GAAP Net Income (Loss), their most closely comparable GAAP measure.

single financial measure, and to consider Adjusted Net Loss and Adjusted EBITDA only in conjunction with their respective most closely comparable GAAP financial measure.

We encourage investors and others to review our condensed consolidated financial statements and notes thereto in their entirety included elsewhere in this quarterly report on Form 10-Q, not to rely on any single financial measure, and to consider Adjusted Net Loss and Adjusted EBITDA only in conjunction with their respective most closely comparable GAAP financial measure.

We believe these non-GAAP financial measures are useful to investors for supplemental period-to-period comparisons of our business and understanding and evaluating our operating results for the following reasons:

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• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• Adjusted EBITDA does not reflect (i) interest expense, or the cash requirements necessary to service interest or principal payments on our non-funding debt, which reduces cash available to us;

• Adjusted EBITDA does not reflect (i) interest expense, or the cash requirements necessary to service interest or principal payments on our Convertible Note, which reduces cash available to us;

or (ii) tax accruals or tax payments that represent a reduction in cash available to us;

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Adjusted Net Loss and Adjusted EBITDA

We calculate Adjusted Net Loss as net income (loss) adjusted for the impact of stock-based compensation expense, change in the fair value of warrants, change in the fair value of bifurcated derivative, and other non-core operational expenses.

We calculate Adjusted EBITDA as net income (loss) adjusted for the impact of stock-based compensation expense, change in the fair value of warrants, change in the fair value of bifurcated derivative, interest on the subordinated 0%

bridge promissory notes that converted into or were exchanged for our Class A common stock and our Class C common stock (such notes, “Pre-Closing Bridge Notes”), and other non-recurring or non-core operational expenses, as well as interest and amortization on non-funding debt (which includes interest on the Convertible Note), depreciation and amortization expense, and income tax expense.

We calculate Adjusted Net Loss as net income (loss) adjusted for the impact of stock-based compensation expense, change in the fair value of warrants and equity related liabilities, change in fair value of convertible preferred stock warrants, change in fair value of bifurcated derivative, and restructuring, impairment, and other expenses.

We calculate Adjusted EBITDA as net income (loss) adjusted for the impact of stock-based compensation expense, change in the fair value of warrants and equity related liabilities, change in fair value of convertible preferred stock warrants, change in the fair value of bifurcated derivative, and restructuring, impairment, and other expenses, as well as interest and amortization on non-funding debt (which includes interest on the Convertible Note), depreciation and amortization expense, and income tax expense.

The following table presents a reconciliation of net income (loss) to Adjusted Net Loss and Adjusted EBITDA for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands)

2024 2023 2024 2023

Adjusted Net Loss

Net (loss) income

Net income (loss)

$ (41,365) $ (44,010) $ (92,857) $ (131,632)

Stock-based compensation expense (1)

7,959 4,054 16,325 8,462

Change in fair value of warrants and equity related liabilities (2)

102 — (721) —

Change in fair value of convertible preferred stock warrants (2)

— 287 — (266)

Change in fair value of bifurcated derivative (3)

— (2,951) — (1,064)

Restructuring, impairment, and other expenses (4)

184 1,687 905 10,829

Adjusted Net Loss

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Adjusted EBITDA

Net (loss) income

Net income (loss)

$ (41,365) $ (44,010) $ (92,857) $ (131,632)

Income tax expense / (benefit)

203 456 346 1,880

Depreciation and amortization expense (5)

7,990 10,822 17,064 22,299

Stock-based compensation expense (1)

7,959 4,054 16,325 8,462

Interest and amortization on non-funding debt (6)

1,668 3,608 4,332 6,298

Restructuring, impairment, and other expenses (4)

184 1,687 905 10,829

Change in fair value of warrants and equity related liabilities (2)

102 — (721) —

Change in fair value of convertible preferred stock warrants (2)

— 287 — (266)

Change in fair value of bifurcated derivative (3)

— (2,951) — (1,064)

Adjusted EBITDA

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We exclude this expense from our internal operating plans and measurement of financial performance (although we consider the dilutive impact to our stockholders when awarding stock-based compensation and value such awards accordingly).

(2) Change in fair value of convertible preferred stock warrants and other warrants, which comprise the Public Warrants and Private Warrants as well as the Sponsor Locked-Up Shares, represents the change in fair value of liability-classified warrants as presented in our Consolidated Statements of Operations and Comprehensive Loss.

This charge is a non-cash charge.

(2) Change in fair value of warrants and equity related liabilities which comprise the Public Warrants and Private Warrants as well as the Sponsor Locked-Up Shares, represents the change in fair value of liability-classified warrants as presented in our Consolidated Statements of Operations and Comprehensive Loss.

Change in fair value of convertible preferred stock warrants represents change in fair value of liability-classified warrants as related to our convertible preferred stock before the completion of the Business Combination.

These charges are non-cash charge.

(3) Change in fair value of bifurcated derivative represents the change in fair value of embedded features within the Pre-Closing Bridge Notes that require bifurcation and are a separate unit of accounting.

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Liquidity and Capital Resources

In our normal course of business, we fund substantially all of our Funded Loan Volume on a short-term basis primarily through our warehouse lines of credit.

In our normal course of business, excluding HELOCs, we fund substantially all of our Funded Loan Volume on a short-term basis primarily through our warehouse lines of credit.

Our borrowings are repaid with the proceeds we receive from the sale of our loans to our loan purchaser network, which includes government-sponsored enterprises (“GSEs”).

As of March 31, 2024, we had three warehouse lines of credit in different amounts and with various maturities, with an aggregate available amount of $425.0 million.

As of June 30, 2024, we had three warehouse lines of credit in different amounts and with various maturities, with an aggregate available amount of $425.0 million.

Warehouse Lines of Credit

As of March 31, 2024 and December 31, 2023, we had the following outstanding warehouse lines of credit:

As of June 30, 2024 and December 31, 2023, we had the following outstanding warehouse lines of credit:

(Amounts in thousands)

Facility Size

March 31, 2024

June 30, 2024

December 31, 2023

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Cash collateral deposit of $15 million is maintained and included in restricted cash.

(2) Interest charged under the facility is at the one month SOFR plus 2.10% - 2.25% .

Subsequent to June 30, 2024, the Company extended the maturity to August 31, 2024.

(2) Interest charged under the facility is at the 30-day term SOFR plus 2.10% - 2.25% .

Cash collateral deposit of $3.8 million is maintained and included in restricted cash.

(3) Interest charged under the facility is at the one month SOFR plus 1.75% - 3.75%.

There is no cash collateral deposit maintained as of March 31, 2024.

(3) Interest charged under the facility is at the 30-day term SOFR plus 1.75% - 3.75%.

There is no cash collateral deposit maintained as of June 30, 2024.

Subsequent to June 30, 2024 the Company extended the maturity to August 3, 2025.

Nasdaq Compliance Requirements

On April 9, 2024, we received formal notice that Nasdaq granted our request for an additional 180-day period, or until October 7, 2024, (the “Extension Notice”) to evidence compliance with the $1.00 per share requirement for continued inclusion on The Nasdaq Capital Market pursuant to the Bid Price Rule.

If at any time before October 7, 2024, the bid price of the our Class A common stock closes at $1.00 per share or more for a minimum of ten consecutive business days, Nasdaq will provide us with written confirmation of compliance with the Bid Price Rule.

If at any time before October 7, 2024, the bid price of our Class A common stock closes at $1.00 per share or more for a minimum of ten consecutive business days, Nasdaq will provide us with written confirmation of compliance with the Bid Price Rule.

If we fail to regain compliance with the Bid Price Rule during the additional compliance period, then Nasdaq will notify us of its determination to delist the Class A common stock, at which point we would have an opportunity to appeal the delisting determination to a Nasdaq Hearings Panel (the “Panel”).

A timely request for a hearing will stay any suspension or delisting action pending the issuance of the Panel’s decision.

The Extension Notice has no effect at this time on the listing of our Class A common stock, which will continue to trade on The Nasdaq Capital Market under the symbol “BETR.” We intend to continue to actively monitor the listing of our Class A common stock and, as appropriate, will consider available options to resolve any deficiencies and regain compliance, including seeking stockholder approval at our annual meeting of stockholders to declare and effect one or more reverse stock splits.

There can be no assurance that we will be able to maintain compliance with other Nasdaq listing obligations.

Failure to maintain other Nasdaq listing requirements could result in the delisting of the Class A common stock from Nasdaq.

The Extension Notice has no effect at this time on the listing of our Class A common stock, which will continue to trade on The Nasdaq Capital Market under the symbol “BETR.”

If the Class A common stock is no longer listed on Nasdaq, or another national securities exchange, such delisting would constitute a fundamental change under the indenture for the Convertible Note that would require us to redeem the Convertible Note prior to maturity for an amount in cash equal to the principal amount of the Convertible Note plus accrued and unpaid interest to the redemption date.

As of June 30, 2024, we had cash and cash equivalents, together with short-term investments of $378.8 million, compared to $528.6 million principal amount outstanding under the Convertible Note.

If we are required to redeem the Convertible Note prior to maturity, we may not have sufficient available cash and cash equivalents or be able to obtain additional liquidity, on acceptable terms or at all, to enable us to redeem or refinance the Convertible Note and continue operating the business.

On June 4, 2024, at the 2024 annual meeting of the Company’s stockholders, the Company’s stockholders approved amendments to the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to effect one or more reverse stock splits of our Common Stock (as defined below) at a ratio ranging from any whole number between 1-for-2 and 1-for-100 and in the aggregate not more than 1-for-100, inclusive, as determined by the Company’s board of directors (the “Reverse Stock Split Authorization”).

On August 1, 2024, pursuant to the Reverse Stock Split Authorization, the Company’s board of directors approved a reverse stock split (the “Reverse Stock Split”) and set a split ratio of 1-for-50 of our Class A common stock, Class B common stock, par value $0.0001 per share (“Class B common stock”), and Class C common stock (together “Common Stock”), provided that the Company’s board of directors reserved the right to modify or abandon the amendment prior to filing with the Secretary of State of the State of Delaware.

As of the effective time of the Reverse Stock Split, one post-split share of our Common Stock will be issued in exchange for every 50 pre-split shares of our Common Stock.

The Reverse Stock Split is currently scheduled to become effective at 6:00 p.m.

New York time on August 16, 2024.

The following table summarizes our cash flows for the periods presented:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

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$ 144,827 $ (25,486)

Three Months Ended March 31, 2024 as Compared to Three Months Ended March 31, 2023

Six Months Ended June 30, 2024 as Compared to Six Months Ended June 30, 2023

Operating Activities

Net cash used by operating activities was $43 million for the three months ended March 31, 2024, a decrease of $120 million, or 74%, compared to net cash used by operating activities of $163 million for the three months ended March 31, 2023.

The reduction in net cash used by operating activities was primarily due to the reduction in net losses period over

period as a result of the Company’s restructuring program as well as a reduction in cash used from originations of LHFS in excess of proceeds from the sale of LHFS.

The remaining proceeds from operating activities consisted of changes in operating assets and liabilities as well as adjustments to reconcile net loss to net cash used by operating activities.

Net cash used by operating activities was $263 million for the six months ended June 30, 2024, an increase of $121 million, or 85%, compared to net cash used by operating activities of $142 million for the six months ended June 30, 2023.

The increase in net cash used by operating activities was primarily due to originations of mortgage loans held for sale in excess of proceeds from sale of mortgage loans held for sale as the Company originated more loans towards the end of the period.

Also contributing to the increase in cash used by operating activities were net losses over the period.

Investing Activities

Net cash used in investing activities was $33 million for the three months ended March 31, 2024, an increase of $27 million, or 452%, compared to net cash used in investing activities of $6 million for the three months ended March 31, 2023.

The increase in cash used in investing activities primarily consist of purchases of short-term investments in excess of maturities of short-term investments.

During the three months ended March 31, 2024, the Company made some additional investments in short-term securities with maturities ranging from 90 days to 1 year.

Net cash used in investing activities was $63 million for the six months ended June 30, 2024, an increase of $20 million, or 47%, compared to net cash used in investing activities of $43 million for the six months ended June 30, 2023.

The increase in cash used in investing activities primarily consists of purchases of short-term investments in excess of maturities of short-term investments as well as originations of loans held for investment during the second quarter, namely through our U.K.

Financing Activities

Net cash used by financing activities was $1.1 million for the three months ended March 31, 2024, a decrease of $75 million, or 102%, compared to net cash provided by financing activities of $74 million for the three months ended March 31, 2023.

The decrease in cash provided by financing activities was primarily driven by a reduction net borrowings (repayments) on warehouse lines of credit.

We fund our LHFS through borrowings on our warehouse lines of credit and for three months ended March 31, 2023 as our originations of LHFS exceeded proceeds from the sale of LHFS, within operating activities, our borrowings also exceeded repayments on warehouse lines of credit as those borrowings were used to fund originations.

For the three months ended March 31, 2024, our borrowings and repayments on warehouse lines of credit remained relatively in line with one another as the originations of LHFS above in operating activities include increased originations of HELOCs which are funded by our cash until sold to a loan purchaser.

Net cash provided by financing activities was $144.8 million for the six months ended June 30, 2024, an increase of $170 million, or 668%, compared to net cash used by financing activities of $25 million for the six months ended June 30, 2023.

The increase in cash provided by financing activities was primarily driven by an increase in net borrowings on warehouse lines of credit to fund originations of mortgage loans towards the end of the quarter.

We fund our LHFS through borrowings on our warehouse lines of credit and for six months ended June 30, 2024, as our originations of LHFS exceeded proceeds from the sale of LHFS, within operating activities, our borrowings also exceeded repayments on warehouse lines of credit as those borrowings were used to fund originations.

The increase in cash provided by financing activities was also driven by an increase in customer deposits, namely through our U.K.

Off-Balance Sheet Arrangements

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Critical Accounting Policies and Estimates

There have been no significant changes in our critical accounting policies and estimates during the three months ended March 31, 2024, as compared to the critical accounting policies and estimates disclosed in the audited consolidated financial statements and related notes thereto as of and for the year ended December 31, 2023, which are included in our 2023 Annual Report on Form 10-K.

There have been no significant changes in our critical accounting policies and estimates as of and during the three and six months ended June 30, 2024, as compared to the critical accounting policies and estimates disclosed in the audited

consolidated financial statements and related notes thereto as of and for the year ended December 31, 2023, which are included in our 2023 Annual Report on Form 10-K.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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• Factors relating to our capital structure, governance and the market for our securities, including:

• The existence of multiple classes of common stock, which is comprised of our Class A common stock, our Class B common stock and our Class C common stock, and its impact on the liquidity and value of the Class A common stock;

• The existence of multiple classes of our Common Stock, which is comprised of our Class A common stock, our Class B common stock and our Class C common stock, and its impact on the liquidity and value of the Class A common stock;

• The limited experience of our directors and management team in overseeing a public company;

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• Our ability to maintain certain lines of credit and obtain future financing on commercially favorable terms to fund loans and otherwise operate our business;

• The liquidity and trading of Class A common stock and Warrants;

• The liquidity and trading of our Class A common stock and Warrants;

• Other factors detailed under Part II, Item 1A.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis