better.com grapples with the dwindling influence of refis in the mortgage market, with preliminary results published by their SPAC partner showing the digital lender expects a net loss of between $85 million and $100 million in the third quarter. And the forecast looks even worse for the fourth quarter, documents show.
according to an S-4 submitted by Aurora Acquisition Corp. With the Securities and Exchange Commission last week, the digital lender expects further declines in the fourth quarter, likely to “outpace third-quarter losses.”
The filing noted that fluctuations in interest rates — which affect refis more than purchasing activity — and a recent reorganization of Better’s sales and operations teams have put pressure on the company’s net income and will continue to do so for the rest of the year. foreseeable next quarter as the company tries to gain a foothold in a procurement market.
In the second quarter, the company also reported a net loss of $86 million. At the time, the company’s spokesperson said Better was impacted by “the same headwinds as everyone else in the industry.”
Meanwhile, the New York-based lender forecasts its third-quarter profit-on-sale margin to be from 1.87% to 1.97%, up from 1.62% in the second quarter of 2021.