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Editor in Chief Sarah Wheeler sat down with Chad Smith, president and COO of Better Mortgage, to talk about leadership, technology, and how they have pivoted their business strategy to meet the needs of this market. Smith joined Better in May 2024 after serving in senior leadership roles at Mission Loans, Caliber Home Loans and loanDepot.
This interview has been edited for length and clarity.
Sarah Wheeler: The mortgage business has had a pretty rough couple of years. How do you lead an organization through those times?
Chad Smith: You have to be nimble. You have to be trying to bring in other sources of business. You need to continue to keep an eye on cost. I think in Better’s case specifically, we carve out quite a large investment in technology and we don’t really ever pivot from that.
I also think you get a little bit more disciplined on prioritization, on ROI, based off what type of improvements you’re making to your system. So things that may have been more top of funnel, but the market’s not really there — maybe you’re shifting some of those priorities to continue to lower fulfillment cost.
And then just constant communication, especially talking to your people when you have these pivots. A lot of our workforce is on variable compensation, so it affects them just as much as it affects any mortgage organization. How are you staying in front of people? We communicate clearly and let them know that we’re here for them as well.
SW: How does the noise from Washington, all the changes at the federal level, affect lenders right now?
CS: You have to build a business around optimizing all environments and so we focus on what we can control. With the amount of noise that’s out there — from regulatory changes to mortgage rates — if you focus on that, it may be the only thing you focus on. So we look at: what rate card are we putting out today and how can we go help customers within that situation?
SW: Talking about technology, you guys made some big moves in 2024 with TinMan Marketplace and Betsy. How do you measure the success of those investments?
CS: I think with TinMan, improvements on fulfillment are pretty easily measurable around productivity, hours per file. We recently hired Misti Snow and we were going through some data with TinMan, and for our team members who are on it, we have two and a half FTEs to fund a loan and fulfillment. I think the industry average is five. So those types of things are easy metrics to track.
Our fulfillment cost is around 35% less than the industry underwriting touches per loan. We have some underwriters on conforming that do 14 new underwrites a day and I would say our average is seven to eight. In some cases, that’s three or four times the industry average. So for 2025, we’re focused on taking a lot of what TinMan is exceptional at and adding loan product to the magic.
Betsy should make us much more efficient. I believe she’s handling just south of 20% of all phone calls. When we really look at that, what’s the transfer rate compared to a person? Those are the types of things that we would deem success or failure. But so far, we’re really, really pleased and we have big ambitions for Betsy this year.
The pace of improvement is just mind-blowing. I’m talking 10 to 12-minute calls where Betsy is bantering with consumers, solving problems. And the consumers love it. In distributed, retail or local, that’s a 24-hour assistant where they are answering task-based pipeline questions that don’t need our highly talented sales person taking those calls.
SW: Are you seeing any differences in consumer behavior in 2025 so far?
CS: You’re seeing more consumers who are not actively seeking a mortgage but come into the funnel when they see press reports on rates dropping or whatever. Those customers aren’t serious transactors, they are just looking, so Betsy is able to screen that communication. And then internally we can input that person’s information for when rates do move, and proactively reach out.
As we’ve continued to add Betsy to more and more of our funnel, we see that consumers are very comfortable with that. There’s been a lot of work to get that right, because the voice has to sound a certain way — and the latency and interruption. Our engineering team has done a very good job at making Betsy much more humanized.
SW: How do you attract high quality loan officers and other mortgage professionals?
CS: As you know, over the last 12 months, Better has moved our model to a little bit more traditional when it comes to loan officers — with our entrance into local, with Neo Home Loans, and then even in consumer direct — by moving to more of what I would call traditional variable work, compensation plans.
I have been shocked at how many people have reached out to us — from distributed, retail, even wholesale, correspondent, etc. And I think it’s because a lot of people are forward thinking. They feel that this trend isn’t stopping. A big reason why I think Neo came here was TinMan. It was a clean slate. There wasn’t legacy architecture and we gave them a seat at the table to help us develop this best-in-class platform.
If rates continue to stay higher for longer, margins are going to continue to be compressed and then cost matters more. And so if we can lower fulfillment cost for branches or local, everyone benefits from that — not just the consumer with a lower price, but also the branch P&L or branch owner.
We look at the world as: how do we make people more productive? Better’s whole thesis for going local was really based off data where we lose customers that come in online, and they end up funding with a local person — often at a higher price. We think that the loan officer is as critical as they have ever been. What can we do to arm them with more tools make them more productive? If the average loan consultant in local is funding one and a half or two and a half loans, between our marketing engine and our technology, how do we have them do six?
SW: How are you looking at the rest of 2025?
CS: I’m obviously optimistic, given Better’s capital position, that we are in the position to lean in and grow local as well as consumer direct. We’ve taken some sublease space and some markets so we can bring people back. I think you’re always more optimized when you’re in a group learning from each other, versus all remote. I also think we have a really good home equity product and that continues to feel like the right product for a lot of consumers.
On the tech side, we’re just continuing to innovate. This year, given that it looks like rates are staying higher for longer, we continue to double down on cost management, vendor renegotiations.
