The media was long overdue for an update on Better. When last big in the news for the Zoom layoffs in December, the 10Y note yield was approx 1.5% and now approx 3.0%. 30Y mortgage rates went from 3.1% to 4.98%. Certainly not good for Better, but also not good for any mortgage originator whose revenue structure depends on transaction volume.
Better.com CEO Vishal Garg says he is personally liable for $750M SoftBank loan
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Re: Better.com CEO Vishal Garg says he is personally liable for $750M SoftBank loan
#32Reminds me of the old saying:
>If you owe the bank $1000, that's your problem. But if you owe the bank $100 million, that's the bank's problem.
Re: Better.com CEO Vishal Garg says he is personally liable for $750M SoftBank loan
#33I don't understand the context. Why is this a big deal? Why would 90% of the employees bail?
That’s the guy who fired a bunch of people over Zoom a few months ago. Financial issues mainly, here is some context: https://techcrunch.com/2022/02/18/better-com-loses-more-seni...
and what's wild is that they were on a hiring spree leading right up to that moment. I was heavily recruited by six different people there who seemingly knew none of their colleagues. I received the last message the morning of the infamous zoom call, then, crickets. Not that I was entertaining the positions being offered, only that regular messaging literally fell off a cliff from those recruiters internal to Better.
Re: Better.com CEO Vishal Garg says he is personally liable for $750M SoftBank loan
#34I don't understand the context. Why is this a big deal? Why would 90% of the employees bail?
Because no one wants to start the day thinking every Zoom meeting is the one they’ll fire you. It’s bad for company morale and it’s bad for employee mental health. It should be 99% bail and the C-suite can work the lines themselves. Because fuck any company that tries to normalize doing business this way.
Re: Better.com CEO Vishal Garg says he is personally liable for $750M SoftBank loan
#35Given that the CEO is probably worth nowhere near $750MM absent his founders stock, isn't this just him just leaning into a binary outcome? Either Better.com can pay off the loan in 5 years or it's gone broke by the and he gives up his share in bankruptcy. I mean, it cuts out the "just squeaking by" option as him having to give up all his equity in something that was worth hundreds of millions is a big kick in the te…
A quick search shows Garg's net worth is ~4B. Despite previous actions he deserves some amount of respect IMO for putting his own money on the line here.
Hard to respect when losing $750m would still leave you a billionaire.
Re: Better.com CEO Vishal Garg says he is personally liable for $750M SoftBank loan
#36wow! Phrasing! Are we still doing phrasing? Alternate title: CEO personally guarantees company financing "The CEO believes in his struggling company, although it theoretically means he could have an excuse to sell a bunch of Better.com shares or personally declare bankruptcy, this CEO has 5x as much cash and is probably swimming in less debt than most of the middle class."
It is how the CEO himself described it:
"I did personally guarantee three quarters of a billion dollars and I’m personally liable for it."
And it is how the title of the article expresses it:
"Better.com CEO Vishal Garg says he is ‘personally liable’ for $750M SoftBank loan"
Re: Better.com CEO Vishal Garg says he is personally liable for $750M SoftBank loan
#37Earlier quoted context omitted.
If Better can't itself afford to pay the loan back, bringing the personal guarantee into play, what value will the equity have? Net worth is an abstraction that's generally useful to reason about outcomes, but it's a leaky abstraction.
One would assume Softbank made sure that the debt was collateralized with something other than Better.com shares. I'm sure a good chunk of that 750M is collateralized with better.com shares but I'd be willing to bet they made him put some other stock/investments on the line.
If softbank believes in Better, but not necessarily in Garg, then having him personally guarantee the loan against his own shares is an easy way to push him out cleanly if things go south.
Re: Better.com CEO Vishal Garg says he is personally liable for $750M SoftBank loan
#38I'm currently in late stages with Better, and holy crap is this company on fire (not in a good way). I've been using them for 3 months exactly, and on my 5th advisor. An advisor is your sole point of contact for the loan... questions, concerns, documents, everything. They don't tell you when the advisor changes, you just notice by chance the little initial emoji of your advisor changed. Realize this means the previou…
I signed up for a pre-approval letter through them. I was presented with someone else's pre approval letter, names, address, pre-approval amount and all.
They didn't seem to realize the gravity of the situation when I called to inform them of the leak.
My advice is to bail now while you still can.
Re: Better.com CEO Vishal Garg says he is personally liable for $750M SoftBank loan
#39Earlier quoted context omitted.
Better is a direct lender, not a broker. They make their money from the spread between the rate/points offered to the user and the price they can package and sell the loan for.
Ok so why makes them different from any other company selling loans to consumers? I took out a loan from hitatchi a while back, I’ve just today had about an exciting new rebranding they’ve had changing they’re name and how ecstatic I, as a customer, will be about it Do I care? No. At start I care about monthly payments and how many months it is. Afterwards I care how long is left. If better come out with better rates…
> Ok so why makes them different from any other company selling loans to consumers?
They are infinitely more convenient and easy to work with from the user side and vertically integrate the entire process. They have loan agents, real estate agents, lawyers, and inspectors. The agent I spoke with last year was very kind. You can also play around with multiple loan options asynchronously and print out different pre-approval letters for the exact amount the house is listed for (this way you don't give away your buying power).
> I took out a loan from hitatchi a while back, I’ve just today had about an exciting new rebranding they’ve had changing they’re name and how ecstatic I, as a customer, will be about it Do I care? No. At start I care about monthly payments and how many months it is. Afterwards I care how long is left. If better come out with better rates than any other provider that’s great, but there’s no value add for this type of product, it’s just how much it costs.
There are multiple ways that Better makes the process "better" than just rates. Rates aren't really competitive if you have good credit. Anyone will give you the market rates for a loan. If you have some really special situation you might see -.5 off your rate through some special thing. My company has a -.25 if you get a home loan from a specific bank and deposit your pay checks there.
Better reduces the overall closing costs by waiving the real estate brokers free if you use their broker. This can easily be >3k. Saving ~1% of a first time home purchase is worth using them imo.
Re: Better.com CEO Vishal Garg says he is personally liable for $750M SoftBank loan
#40Earlier quoted context omitted.
Ok so why makes them different from any other company selling loans to consumers? I took out a loan from hitatchi a while back, I’ve just today had about an exciting new rebranding they’ve had changing they’re name and how ecstatic I, as a customer, will be about it Do I care? No. At start I care about monthly payments and how many months it is. Afterwards I care how long is left. If better come out with better rates…
> Ok so why makes them different from any other company selling loans to consumers? They are infinitely more convenient and easy to work with from the user side and vertically integrate the entire process. They have loan agents, real estate agents, lawyers, and inspectors. The agent I spoke with last year was very kind. You can also play around with multiple loan options asynchronously and print out different pre-app…
US real estate fees seem crazy to me, the entire cost to me for both selling and buying my last house was below 1.5%, including estate agent, conveyancing, mortgage fee and van hire.
Had I been a FTB it would have been under 1%.