What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-14 compared with 2024-08-14 · 145 added, 158 removed, 394 unchanged (43% 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 June 30, 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 September 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) and net interest income for the three and six months ended June 30, 2024 and 2023 is as follows:

Three Months Ended June 30,

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 nine months ended September 30, 2024 and 2023 is as follows:

Three Months Ended September 30,

(Amounts in thousands, except percentage amounts)

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Total net revenues

Six Months Ended June 30,

Nine Months Ended September 30,

(Amounts in thousands, except percentage amounts)

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Other revenue 8,768 10 % 13,664 25 %

Net interest income 8,934 15 % 880 2 %

Net interest income/ (loss) 13,355 15 % (9,775) (18) %

Total net revenues

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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 June 30, 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 September 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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Key Business Metric

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

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Funded Loan Volume

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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 $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.

Our Funded Loan Volume of $1,035 million in the three months ended September 30, 2024 increased by approximately 42% from $731 million in the three months ended September 30, 2023.

Our Funded Loan Volume increased by approximately 7% period-over-period to $2,658 million in the nine months ended September 30, 2024 from $2,488 in the nine months ended September 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.

For the three months ended September 30, 2024, purchase and refinance loans comprised $869 million and HELOC and closed-end second lien loans comprised $166 million of Funded Loan Volume.

For the nine months ended September 30, 2024 purchase and refinance loans comprised $2,351 million while HELOC and closed-end second lien loans comprised $307 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 $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.

Our Refinance Loan Volume of $130 million in the three months ended September 30, 2024 increased by approximately 177% from $47 million in the three months ended September 30, 2023.

Our Refinance Loan Volume increased by approximately 62% year-over-year to $289 million in the nine months ended September 30, 2024 from $178 million in the nine months ended September 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 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.

Our Purchase Loan Volume increased by approximately 13% year-over-year to $739 million in the three months ended September 30, 2024 from $656 million in the three months ended September 30, 2023.

Our Purchase Loan Volume decreased by approximately 9% year-over-year to $2,062 million in the nine months ended September 30, 2024 from $2,268 million in the nine months ended September 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.

Our HELOC Loan Volume increased to $166 million in the three months ended September 30, 2024 from $28 million in the three months ended September 30, 2023.

Our HELOC Loan Volume increased to $307 million in the nine months ended September 30, 2024 from $41 million in the nine months ended September 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 $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.

Our D2C Loan Volume of $776 million in the three months ended September 30, 2024 increased by approximately 102% from $384 million in the three months ended September 30, 2023.

Our D2C Loan Volume of $1,805 million in the nine months ended September 30, 2024 increased by approximately 30% year-over-year from $1,392 million in the nine months ended September 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 $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.

Our B2B Loan Volume of $259 million in the three months ended September 30, 2024 decreased by approximately 25% from $346 million in the three months ended September 30, 2023.

Our B2B Loan Volume of $853 million in the nine months ended September 30, 2024 decreased by approximately 22% year-over-year from $1,095 million in the nine months ended September 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.

Our Total Loans of 3,443 in the three months ended September 30, 2024 increased by approximately 67% from 2,067 in the three months ended September 30, 2023.

Our Total Loans of 8,429 in the nine months ended September 30, 2024 increased by approximately 22% year-over-year from 6,936 in the nine months ended September 30, 2023.

Purchase and refinance loans comprised 2,196 of the Total Loans in the three months ended September 30, 2024, while HELOC and closed-end second lien loans comprised 1,247.

Purchase and refinance loans comprised 5,887 of the Total Loans in the nine months ended September 30, 2024, while HELOC and closed-end second lien loans comprised 2,542.

Average days loans held for sale, excluding Company-funded LHFS and Company-funded HELOC, for the three months ended September 30, 2024 and 2023, were approximately 24 and 21, respectively.

Average days loans held for sale, excluding Company-funded LHFS and Company-funded HELOC, for the nine months ended September 30, 2024 and 2023, were approximately 28 and 21, respectively.

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

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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.

Our Average Loan Amount decreased by approximately 15% to $300,589 in the three months ended September 30, 2024 from $353,547 in the three months ended September 30, 2023 and decreased approximately 12% year-over-year to $315,350 during the nine months ended September 30, 2024 from $358,660 in the nine months ended September 30, 2023.

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 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.

Gain on Sale Margin increased by approximately 50 basis points to 2.08% during the three months ended September 30, 2024 from 1.58% for the three months ended September 30, 2023.

We saw an increase in our Gain on Sale Margin for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, as a result of improved pricing on loans funded.

Gain on Sale Margin increased by approximately 27 basis points to 2.31% for the nine months ended September 30, 2024 from 2.04% for the nine months ended September 30, 2023 as a result of improved pricing on loans funded.

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.

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

Market Share of 0.2% for the nine months ended September 30, 2024 remained substantially the same year-over-year from 0.2% for the nine months ended September 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 September 30, 2024 compared to the three months ended September 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.

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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.

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

Fair value of forward commitments hedging IRLCs and LHFS are measured based on quoted prices for similar assets.

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For settlement services, we generate revenues from fees on services, such as policy preparation, title search, wire, and other services, required to close a loan, which were provided by third parties through our platform.

We recognized revenues from fees on settlement services upon the completion of the performance obligation, which was when the loan transaction closes.

We recognize revenues from fees on settlement services upon the completion of the performance obligation, which was when the loan transaction closes.

For Better Cover, we generate revenues from agent fees on homeowners insurance policies obtained by our customers through our marketplace of third-party insurance carriers.

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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”).

Interest expense includes interest expense on warehouse lines of credit, interest expense on customer deposits, through our U.K.

operations, as well as interest expense on the 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

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The expense is recorded on a straight-line basis over the requisite service period.

Compensation and benefits excludes amounts capitalized for internal developed software.

General and Administrative Expenses

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

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

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands, except per share amounts)

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$ (3.58) $ (35.63) $ (9.74) $ (66.54)

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

Three and Nine Months Ended September 30, 2024 as Compared to Three and Nine Months Ended September 30, 2023

The components of our revenues for the period were:

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

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands)

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

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

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands)

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Total gain on loans, net $ 21,503 $ 11,553 $ 61,384 $ 50,739

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.

Gain on sale of loans, net increased $6.2 million or 65% to $15.8 million for the three months ended September 30, 2024 compared to $9.6 million for the three months ended September 30, 2023.

The increase was largely driven by increased Funded Loan Volume and improved pricing on loans funded.

Gain on sale of loans, net increased $1.2 million or 3% to $44.0 million for the nine months ended September 30, 2024 compared to $42.8 million for the nine months ended September 30, 2023.

The increase was largely driven by increased Funded Loan Volume and improved pricing on loans funded.

Integrated partnership fees decreased $0.4 million, or 14% to a gain of $2.4 million for the three months ended September 30, 2024, compared to gain of $2.8 million for the three months ended September 30, 2023.

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

Integrated partnership fees decreased $0.9 million, or 11% to a gain of $7.2 million for the nine months ended September 30, 2024, compared to gain of $8.1 million for the nine months ended September 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.

Loan repurchase reserve decreased $4.1 million or 473%, to a recovery of $3.2 million for the three months ended September 30, 2024, compared to a reserve of $0.9 million for the three months ended September 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.

Loan repurchase reserve decreased $10.3 million or 5812%, to a recovery of $10.2 million for the nine months ended September 30, 2024, compared to a reserve of $0.2 million for the nine months ended September 30, 2023.

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.

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The components of other revenue for the period were:

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

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands) 2024 2023 2024 2023

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Total other revenue $ 3,070 $ 4,009 $ 8,768 $ 13,664

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.

International lending revenue increased $0.1 million, or 11% to $1.2 million for the three months ended September 30, 2024 compared to $1.1 million for the three months ended September 30, 2023.

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

brokerage businesses.

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.

International lending revenue increased $0.8 million, or 28% to $3.5 million for the nine months ended September 30, 2024 compared to $2.7 million for the nine months ended September 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.

Insurance services revenue decreased $0.6 million, or 56% to $0.4 million for the three months ended September 30, 2024 compared to $1.0 million for the three months ended September 30, 2023.

The decrease in insurance services revenue was primarily driven by a decrease in Insurance Coverage Written due to fewer insurance transactions, as well as lower revenue generated on each insurance transaction.

Insurance services decreased $1.2 million, or 43% to $1.6 million for the nine months ended September 30, 2024 compared to $2.8 million for the nine months ended September 30, 2023.

Real estate services increased $0.1 million, or 16% to $0.8 million for the three months ended September 30, 2024 compared to $0.7 million for the three months ended September 30, 2023.

The increase in real estate services revenue was primarily driven by an increase in Better Real Estate Transaction Volume .

Real estate services decreased $4.8 million, or 73% to $1.8 million for the nine months ended September 30, 2024 compared to $6.5 million for the nine months ended September 30, 2023.

The decrease in real estate services was primarily driven by a reduction in Better Real Estate Transaction Volume as well as earning lower revenue per transaction for the nine months ended September 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 decreased by $0.6 million, or 47% to $0.7 million for the three months ended September 30, 2024 compared to $1.3 million for the three months ended September 30, 2023.

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

as well as other miscellaneous income.

Other revenue increased by $0.3 million, or 19% to $1.9 million for the nine months ended September 30, 2024 compared to $1.6 million for the nine months ended September 30, 2023.

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

as well as other miscellaneous income.

Net Interest Income

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

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

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands) 2024 2023 2024 2023

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Other interest expense (1,631) (11,940) (5,963) (18,237)

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

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.

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 resulting from the capital raised in August 2023 through the closing of the Business Combination.

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.

Total net interest income/(loss) $ 4,421 $ (10,655) $ 13,355 $ (9,775)

Mortgage interest income increased $1.8 million, or 51% to $5.4 million for the three months ended September 30, 2024 compared from $3.6 million of the three months ended September 30, 2023.

The increase in Mortgage interest income was driven by increased Funded Loan Volume and Total Loans originated.

Mortgage interest income increased $0.5 million, or 4% to $12.8 million for the nine months ended September 30, 2024 compared from $12.3 million of the nine months ended September 30, 2023.

The increase in Mortgage interest income was driven by increased Funded Loan Volume and Total Loans originated.

Interest income from investments increased $4.0 million, or 859% to $4.5 million for the three months ended September 30, 2024 compared to $0.5 million for the three months ended September 30, 2023.

The increase in interest income from investments was primarily driven by increased investments in 2024 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 $9.4 million, or 164% to $15.1 million for the nine months ended September 30, 2024 compared to $5.7 million for the nine months ended September 30, 2023.

The increase in interest income from investment was primarily driven by increased investments in 2024 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.

Warehouse interest expense increased $1.1 million, or 38% to $3.8 million for the three months ended September 30, 2024 compared to $2.8 million for the three months ended September 30, 2023.

The increase in warehouse interest expense was primarily driven by carrying a higher average warehouse balance over the three months ended September 30, 2024 compared to three months ended September 30, 2023 as a result of an increase in loans funded over the same period.

Warehouse interest expense decreased $1.0 million, or 10% to $8.6 million for the nine months ended September 30, 2024 compared to $9.5 million for the nine months ended September 30, 2023.

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

The decrease for the nine month period was driven by lower funded loan volume in the first and second quarters of 2024 in comparison to the first and second quarters of 2023.

Other interest expense decreased $10.3 million, or 86% to $1.6 million for the three months ended September 30, 2024 compared to $11.9 million for the three months ended September 30, 2023.

Other interest expense for the three months ended September 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 September 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 $12.3 million, or 67% to $6.0 million for the nine months ended September 30, 2024 compared to $18.2 million for the nine months ended September 30, 2023.

Other interest expense for the nine months ended September 30, 2024 is related to interest expense on the Convertible Note, which is at a lower interest rate, while interest expense for the nine months ended September 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands)

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$ 83,078 $ 358,137 $ 230,102 $ 537,610

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 $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.

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.

Compensation and benefits expenses were $37.8 million for the three months ended September 30, 2024, a decrease of $46.6 million or (55)% as compared with $84.3 million for the three months ended September 30, 2023.

We reduced our headcount between the two periods, which lead to a decrease in compensation and benefits.

Further, we had a significantly higher stock based compensation expense during three months ended September 30, 2023 of $39.4 million compared to $5.5 million during three months ended September 30, 2024, which was due to awards that had met the liquidity event criteria with the Closing of the Business Combination in August 2023 as well as service based conditions during that period.

Compensation and benefits expenses were $111.1 million for the nine months ended September 30, 2024, a decrease of $45.4 million or (29)% as compared with $156.4 million for the nine months ended September 30, 2023.

We reduced our headcount between the two periods, which lead to a decrease in compensation and benefits.

Further, we had a significantly higher stock based compensation expense during nine months ended September 30, 2023 of $47.9 million compared to $21.8 million during the nine months ended September 30, 2024, which was primarily due to awards that had met the liquidity event criteria with the Closing of the Business Combination in August 2023 as well as service based conditions during that period.

General and administrative expenses were $12.6 million for the three months ended September 30, 2024, a decrease of $1.6 million or 11% as compared with $14.2 million in the three months ended September 30, 2023.

The decrease in general and administrative expenses was driven primarily by decreases in expenses which were incurred in the prior period due to the Closing of the Business Combination which drove an increase in professional services and other related fees.

This decrease was offset by increased operating expenses associated with maintaining public company infrastructure for the three months ended September 30, 2024.

General and administrative expenses were $41.8 million for the nine months ended September 30, 2024, a decrease of $1.9 million or 4% as compared with $43.7 million in the nine months ended September 30, 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 decreases in professional services as we were incurring higher legal and professional expenses leading up to the Closing of the Business Combination for the nine months ended September 30, 2023 in comparison to the nine months ended September 30, 2024.

This decrease was offset by increased operating expenses associated with maintaining public company infrastructure for the nine months ended September 30, 2024.

Technology expenses were $7.2 million for the three months ended September 30, 2024, an increase of $0.9 million or 14% as compared with $6.3 million in the three months ended September 30, 2023.

The increase in technology expenses was driven primarily by an increase in costs associated with software vendors required to run our systems infrastructure compared to the prior period.

Technology expenses were $19.3 million for the nine months ended September 30, 2024, a decrease of $12.7 million or 40% as compared with $32.0 million in the nine months ended September 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.

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, which occurred in early 2023.

Marketing and advertising expenses were $12.1 million for the three months ended September 30, 2024, an increase of $7.0 million or 139% as compared with $5.1 million in the three months ended September 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.

Marketing and advertising expenses were $25.2 million for the nine months ended September 30, 2024, an increase of $9.3 million or 58% as compared with $15.9 million in the nine months ended September 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.

Loan origination expenses were $3.8 million for the three months ended September 30, 2024, an increase of $3.1 million or 502%, as compared with $0.6 million in the three months ended September 30, 2023.

The increase in loan origination expenses was driven by increased Funded Loan Volume, as well as the absence of certain one-time expense reversals associated with loan origination vendors present in the three months ended September 30, 2023.

Loan origination expenses were $7.1 million for the nine months ended September 30, 2024, and decrease of $2.1 million or 23%, as compared with $9.2 million in the nine months ended September 30, 2023.

The decrease in loan origination expenses was driven by a reduction in costs associated with loan origination vendors, as well as improved technology efficiency that reduced the reliance on certain loan origination vendors.

Other expenses/(income) was an expense of $1.3 million for the three months ended September 30, 2024, a decrease of $235.7 million or 99%, as compared with expenses of $237.0 million in the three months ended September 30, 2023.

The decrease in other expenses was primarily driven by a loss of $237.7 million on the fair value of the embedded derivative included within the Pre-Closing Bridge Notes which converted to common stock in connection with the Closing of the Business Combination during three months ended September 30, 2023.

Other expenses/(income) was an expense of $0.3 million for the nine months ended September 30, 2024, a decrease of $247.3 million or 100%, as compared with expenses of $247.6 million in the nine months ended September 30, 2023.

The decrease in other expenses was primarily driven by a loss of $236.6 million on the fair value of the embedded derivative included within the Pre-Closing Bridge Notes which converted to common stock in connection with the Closing of the Business Combination during three months ended September 30, 2023.

Non-GAAP Financial Measures

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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.

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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Amounts in thousands)

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

— 287 — (266)

Change in fair value of bifurcated derivative (3)

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

— 287 — (266)

Change in fair value of bifurcated derivative (3)

20 unchanged sentences

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 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.

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

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

(Amounts in thousands)

Facility Size

June 30, 2024

September 30, 2024

December 31, 2023

Funding Facility 1 (1)

July 31, 2024 100,000 69,228 61,709

September 30, 2024 100,000 — 61,709

Funding Facility 2 (2)

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

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

Subsequent to September 30, 2024, the Company extended the maturity to September 30, 2025.

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

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(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.

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

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 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.”

On Friday, August 16, 2024, we filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation, effecting the 1-for-50 reverse stock split of the Company’s common stock (the “Reverse Stock Split”) for the primary purpose of increasing the per share trading price of the Company’s Class A common stock to enable us to regain compliance with the minimum bid price requirement for continued listing on The Nasdaq Capital Market (the “Nasdaq”).

Our Class A common stock began trading on a split-adjusted basis on the Nasdaq upon the market open on Monday, August 19, 2024.

Effective August 16, 2024, as a result of the Reverse Stock Split, every 50 shares of the our issued and outstanding common stock was converted into one issued and outstanding share of Class A common stock, Class B common stock and Class C common stock, as applicable, without any change to the par value per share, the voting rights of the common stock, any stockholder’s percentage interest in the Company’s equity or any other aspect of the common stock.

As previously reported, on October 12, 2023, the Company was notified by the Listing Qualifications Staff (the “Staff”) of Nasdaq that the Company’s common stock failed to maintain a minimum bid price of $1.00 over the previous 30 consecutive business days as required by the Listing Rules of Nasdaq.

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.

On September 3, 2024, the Company received a letter from Nasdaq notifying us that the Staff has determined that for the last 10 consecutive business days, from August 19, 2024, to August 30, 2024, the closing bid price of the our common stock has been at $1.00 per share or greater, and accordingly, we have regained compliance with Listing Rule 5550(a)(2) and the matter is now closed.

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

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

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$ 93,108 $ 330,929

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

Nine Months Ended September 30, 2024 as Compared to Nine Months Ended September 30, 2023

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.

Net cash used by operating activities was $274 million for the nine months ended September 30, 2024, an increase of $195 million, or 245%, compared to net cash used by operating activities of $79 million for the nine months ended September 30, 2023.

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 $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.

Net cash used in investing activities was $112 million for the nine months ended September 30, 2024, an increase of $70 million, or 166%, compared to net cash used in investing activities of $42 million for the nine months ended September 30, 2023.

Loans held for investment are funded from our cash on hand.

Financing Activities

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.

Net cash provided by financing activities was $93.1 million for the nine months ended September 30, 2024, a decrease of $238 million, or 72%, compared to net cash provided by financing activities of $331 million for the nine months ended September 30, 2023.

The decrease in cash provided by financing activities was primarily driven by the Closing of the Business Combination during the nine months ended September 30, 2023 which led to a cash increase of $422 million mainly from the issuance of the Convertible Note, issuance of common stock, and proceeds of the Business Combination, offset by the repayment of the Corporate Line of Credit.

During the nine months ended September 30, 2024, our cash provided by financing activities was mainly 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 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.

There have been no significant changes in our critical accounting policies and estimates as of and during the three and nine months ended September 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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Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this quarterly report on Form 10-Q.

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.

looking statements.

Forward-looking statements in this quarterly report on Form 10-Q and the associated risks, uncertainties, assumptions and other important factors may include, but are not limited to:

32 unchanged sentences

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