Vishal Garg is back at Better, just over two months after the digital mortgage company’s board removed him as CEO. This time, he says, someone else should run the company.
The founder of the publicly traded lender regained control of its board on Oct. 5, after shareholders representing 52.02% of its voting power backed his campaign to remove five directors, including interim CEO Daniel Lewis and Chairman Harit Talwar. Lewis was also removed as interim CEO, and Garg appointed a new slate of directors.
Garg’s return followed a bitter dispute over Better’s leadership and financial performance. The board initially described his August departure as mutually agreed, but later cited concerns about his “judgment, temperament and credibility,” along with more than $1.5 billion in cumulative net losses since 2022 and a stock price decline of more than 90% during his tenure. Garg disputes that account, saying an activist shareholder he had trusted engineered his ouster.
He is now Better’s head of product, platform and innovation, and says the company is on the hunt for a CEO who can be a stronger people leader while he focuses on its technology. To improve its financial position, Garg said Better is also cutting expenses, pursuing the sale of its U.K. bank, and expanding its mortgage technology and services business through partners such as Credit Karma.
Those efforts come as Better continues to lose money. The company reported a $30.6 million net loss in the second quarter, while preliminary third-quarter loan volume reached $1.39 billion, up 15% from a year earlier but down from $1.67 billion in Q2.
In an exclusive interview with This Week in Fintech (believed to be his first since re-joining Better), Garg discussed the fight for control of Better, his decision to leave the CEO role to someone else, and his plans to bring the company to break-even.
The following conversation has been edited and condensed for length and clarity.
What happened between you and the investor who became interim CEO?
An activist shareholder came along. I introduced him to the board, and he was able to engineer a board coup where they fired me as CEO in August and he took over.
I’ve never been really good about EQ. The guy was really into Better and into the mission and vision of what we were building. Along with the fight, 2,000-plus text messages came out between me and him. He was in love with the company and all the stuff we were doing, and I appreciated that because I’d been alone in the wilderness for almost four years building. So I foolishly put him on the board.
The board cited concerns about your leadership and Better’s financial performance. Do you think any of its criticisms were valid?
It was a disgruntled shareholder trying to take over. They never put out their own version of the facts. They never put out their own version of the future. Ultimately, people voted me back in.
They didn’t vote me back in because they liked me. They voted me back in because they want to know that this company has a future, can grow, and has a plan and someone who can execute it and will work night and day to make that happen.
It’s very easy to write memos. It’s much harder to make things happen.
You’re back in an executive role. Why aren’t you returning as CEO?
I’m just not good at the politics. I like making stuff that makes people happy. I like making stuff that makes people save money. Saving money makes me happy, and saving money for other Americans makes me happy.
I’m the head of product, platform and innovation. I want to keep finding ways to make the American dream faster and easier. I’m focused on that, and someone who’s going to be a better people leader is going to be the CEO.
Would you have reached that decision without being removed?
When I was away, I realized you just get perspective. I’d been driving hard for 12 years, and it becomes a new normal. You get perspective and ask: How does this happen, and how do you make sure it doesn’t happen again?
I got a lot of great advice from people. When you’re in the seat, people aren’t really very honest with you. When you’re out, people are. That was really helpful.
How will you handle working with a new CEO who may make different decisions about strategy, spending or personnel?
We’ve always had a pretty collaborative process here. I’m a numbers guy and an actions guy. If the numbers make sense, that’s the reason I do things—perhaps too much so.
I think I’ll get along with the new person as long as they’re also focused on decisions that make sense from a numbers perspective.
I have a hard-charging personality because I’m in a hurry to make the mission successful and make the company profitable. Any new CEO coming in is going to want that and be able to channel it in the right way.
On the shareholder call, you talked about driving results without empathy. What did you mean?
Driving results without empathy is putting changes in place without considering the people aspects—just focusing on the business, product and customer aspects.
I’ve always had a lot of customer empathy. That’s looking at a whole bunch of angles in the prism, but not all of them. Having someone who can look at all the angles is a good thing.
How has Better’s business changed since it went public?
Mortgage rates were high. The refinancing bust had come and gone. Volumes were down.
Behind the scenes, I started using large language models on this rich learning dataset we had: over $100 billion in loans that had gone through one platform, Tinman. Every interaction with the consumer, all the data attributes, all the changes, all the investor criteria and every document that had to change were in one place.
We started dramatically reducing the cost of making loans and becoming more competitive. Better started growing again in 2024, and mortgage brokers came to me—the people I’d been saying we were going to get rid of forever—and asked, “Can we use your platform?”
Then Credit Karma came to us. Soon enough, we became the backbone of selling our Tinman AI platform to enterprises to help them reach their customers and give them mortgages and home equity loans.
How does the platform business make money?
It costs traditional mortgage companies about $11,700 to make a loan, and we charge anywhere between $4,000 and $6,000 to make a loan with AI.
They can use our platform to be in the mortgage and HELOC business. It saves them about 50%, and our margins on that business are about 60%.
For every loan that gets done, we get paid between $4,000 and $6,000.
Where do those customers come from, and how much of your revenue comes from platform fees?
They’re Credit Karma’s customers. They’re Coinbase’s customers. Mortgage brokers already have these customers.
Credit Karma is our largest partner. Platform fees are 60% of revenue.
Is the Credit Karma HELOC offering live?
Not yet. We expect that to launch in the next month or so.
Loan volume grew from a year ago but declined from the second quarter. What caused that, and did the leadership dispute hurt the business?
You have seasonality, and rates went up dramatically in the third quarter. Quite frankly, in the third quarter, I was gone.
I think we lost two and a half months and a whole bunch of momentum. But we’re back now.
What mortgage tasks still require humans?
Very few tasks still require humans, other than if a human on the other side wants to talk to a human.
If the person in the title agency office in Decatur, Georgia, wants to talk to a person to verify something, we need a person to do that. If the Realtor wants to talk to a person, we need a person to do that. Or if the consumer is uncomfortable using AI, we need a human.
We want to meet customers where they are.
Better has announced about $64 million in implemented and targeted annualized expense reductions. What is being cut, and are you planning job reductions?
You’re going to see a lot of cuts in traditional marketing spend and traditional vendors, like big law firms and big accounting firms. A lot of that is going to get brought in-house. I think that’s $40 million to $45 million of the $64 million.
Then you’re going to see people reallocated to tasks that best suit them, and have AI take over things that AI is now simply better at doing.
We have about 650 employees in the U.S. The plan is to grow and improve productivity.
Why are you selling Birmingham Bank, and what would the sale bring into the business?
We bought a bank in the U.K. back when we got all that money from SoftBank in 2021. We were going to expand into the U.K. and ended up buying a mortgage broker and a bank there.
We’ve sold the mortgage broker. The last piece of assets we have in the U.K. is the bank, so we’re selling it. That’s going to bring another $65 million to $70 million of net cash into the business.
Can you share your current cash runway without that sale?
The last quarterly disclosure was $100-something million.
When do you think Better will break even?
I’m not putting an exact minute on it, but we’re gunning hard at it. I think in the next couple of months, we’re going to be able to break even.
Why buy back stock while Better is still losing money?
We’re way cheaper and misunderstood and undervalued. The stock is down 70% from right before the day I was fired. We sold stock earlier this year, in April, at $32 a share.
If we can buy back shares that we sold at $32 a share when the growth story was not even as good as it is today, I think that’s a home run for our shareholders.
Where do you see the biggest opportunity for consumer AI in financial services?
I grew up in the dot-com era, and it was clear what the internet did. It changed how a lot of people worked, both destroyed jobs and created jobs. But it was really clear what the value proposition to the consumer was. The internet made cheap things cheaper. It made things easier and faster.
Today, businesses are seeing the benefits of AI. Consumers are seeing it as a knowledge tool, but not yet something that makes their lives better by making things cheaper, faster or easier.
I think the biggest place consumer AI agents can make a difference to an average American’s life is financial services, because so much of financial services operates with user friction.
AI agents are really good at filling out forms, and that’s really what so much of consumer finance is: filling out forms and submitting paperwork.
