Better.com partners with Palantir on new proprietary loan platform
Struggling digital mortgage lender Better.com is teaming up with secretive big data firm Palantir to create a proprietary loan platform that is says will enable Fannie Mae, Freddie Mac and mortgage investors to make “richer and deeper data-driven mortgage capital allocation decisions.”
Tinman Marketplace, as it has been dubbed, will be powered by Palantir’s Foundry operating system, which Better says will automate 70% of the mortgage process.
The digital lender said it would turn “archaic rate sheets” and mortgage eligibility PDF files into a thing of the past. It would be paired with the lender’s existing investor and pricing matching engine.
“For the first time, simultaneous changes to pricing and eligibility criteria will allow capital to flow into underwriting attributes that are more than the traditional GSE loan level pricing adjustment grid,” Better said in a prepared statement Wednesday.
“Foundry and Tinman will permit a GSE to identify portfolio rebalancing opportunities and almost instantly identify the specific points to target to ensure optimal pricing and credit with ease and new speeds not seen in the mortgage market,” said Vishal Garg, the chief executive officer at Better.com.
Better says the platform will leverage dozens of data points, far beyond the standard underwriting points that include property type, credit score, loan-to-value ratio. Tinman could assess rental payments, student debt and other variables.
“This type of tool is a key step in achieving a fairer and better housing finance market,” Garg said in a prepared statement.
The partnership with Palantir, co-founded by Peter Thiel, appears to be an attempt to resuscitate a company that not long ago was hailed as being at the vanguard of innovation in the digital lending space, but more recently has been exposed by a lack of reliable purchase business and a series of self-inflicted scandals.
Better HoldCo, which includes the digital lender plus its nascent brokerage, title and insurance services, announced plans in May 2021 to go public at a $7.7 billion valuation via a merger with blank check company Aurora Acquisition Corp. But it hasn’t happened due what critics have described as a combination of the lender’s poor financial performance and a SPAC market that has entirely dried up.
According to a July SEC filing, Better.com still plans to go public through a merger with Aurora.
The digital nonbank lender has been embroiled in numerous scandals since its founding in 2016, including a recent accusation by a former executive who says that Garg misled investors when attempting to go public, as well as the fallout from Garg laying off 900 workers in a dystopian Zoom call.
Since laying off 15% of the entire workforce in December, the company’s workforce was reduced from 5,800 in March of this year to 2,900 as of May 15.
In the first quarter of 2022, the lender reported a $221 million loss, compared to a $137.5 million profit during the same period in 2021. Origination volume was down about 40% from the prior year.
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