Hello, LOs!
Aurora Acquisition Corp., the blank-check company tied to digital mortgage lender Better.com, recently submitted its amended S-4. And it's a doozy.
We learned a lot from the 900 or so pages disclosed in the SEC filing, including that Better's gain-on-sale margin fell from 301 bps in Q1 2021 to 160 bps in Q2 2021, which contributed to a $86 million loss for the quarter. The big dip is mostly attributed to declining mortgage volume, especially as the market shifts to purchase from refi. (Better is more vulnerable to that shift than most: the industry average for refi mix is about 65% whereas Better is at 85%.)
Another thing also caught my attention: Better is growing like gangbusters, and that itself is a huge challenge for management. In its S-4, Better said it originated 77,902 loans in the first six months of 2021, compared to 20,784 a year prior. To help handle the volume, it has grown to 8,100 "team members" as of June 30 2021. Roughly 5,700 workers are in production roles, and of them, 3,300 are in the U.S. and 2,400 are in India.
Outsourcing is a fact of life in the modern, information economy. Plenty of mortgage companies outsource production functions to workers in countries such as the Philippines and India – there are loads of college-educated, tech-fluent workers who speak English. It's cost-effective and it makes sense.
My question to you, LOs, is this – if your lender has moved mortgage production functions overseas, has it affected your work in any way? Email me anonymously at jkleimann@housingwire.com.
James Kleimann
Managing Editor, HousingWire
P.S. We've recently ramped up coverage of the secondary market. Please check out Bill Conroy's latest feature, which examines UWM's foray into the private-label MBS market and its relationship with JPMorgan Chase. Our coverage of the secondary market is available only through an HW+ subscription. If you're not already a member, you can subscribe here.
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