Will Better.com’s ‘1,000 jobs’ actually appear?
Upstart online mortgage company has big expansion plans and powerful backers, but there are challenges, too
This article appeared in the Sept. 18, 2019, edition of the Charlotte Ledger, a 3x/week newsletter on local business news. Sign up here.
The announcement this week that Better Mortgage (Better.com) plans to hire 1,000 workers in Charlotte in the next five years sounds like big, welcome news.
It comes after a string of huge job announcements for Charlotte — 2,000 from Lowe’s in South End; 1,200 from AvidXchange at the Music Factory; 2,000 from Truist uptown.
But when you compare Better’s background with that of the other companies that have recently announced lots of jobs in Charlotte, well, you might see that there’s reason to be a liiiiittle more skeptical. Here’s why:
- It is a young company, founded only three years ago. It has just 20-30 people working in Charlotte. The company has only 700 employees nationwide. It’s a startup. Startups sometimes flame out.
- It is not building its own office. Rather, it’s moving into a WeWork space in South End.
- It is not taking tax incentives. When companies accept state or local tax incentives — which are common with job announcements of this size — they commit to a certain level of investment and job creation. Better is not doing that.
It’s also entering a highly competitive field. Better allows potential home buyers to gain approval for home loans quickly and avoid the hassles of endless paperwork. As the New York Times described it: “The company says its new product will allow borrowers to be fully approved for a purchase or refinance loan in as little as eight minutes, simply by plugging in some personal details on their computers, tablets or smartphones.”
Oh wait — that quote wasn’t about Better. It was about Quicken Loans’ Rocket Mortgage … in 2015. The two have the same business model, only Rocket Mortgage has a huge head start and is part of the nation’s largest mortgage lender. Quicken surpassed Wells Fargo as the country’s biggest mortgage lender last year.
Technology for all: Rocket Mortgage and Better Mortgage like to portray traditional lenders as stuck in the past, but that’s not quite true. “Even local companies are all using new technologies that are making the whole system faster,” says Rocke Andrews, a mortgage broker in Tucson, Ariz., and incoming president of the National Association of Mortgage Brokers. A few years ago, loans would take 30 days to process. Now, they normally take about 10 to 14, he tells the Ledger — because the whole industry is adopting new time-saving technologies.
In addition, real-estate agents don’t care much for online lenders. They prefer to have local humans to yell at to hurry up to get deals done. They don’t have that ability with faceless online loan platforms.
Reasons for optimism: Of course, there are plenty of reasons to think Better will succeed in Charlotte, too. Mainly, that’s because it has big and powerful backers, including Ally Bank and Goldman Sachs. And raising $254M in funding can pay for a lot of employees and develop a lot easy-to-use financial apps — or perhaps weather an economic downturn.
It’s great for Charlotte to have another start-up in town because it helps develop the city’s entrepreneurial culture. And it’s nice to see Charlotte become known as a financial technology center. But adding 1,000 jobs here from a base of 30, out of a WeWork office, in a competitive industry in which the market leader is doing mostly the same thing? Let’s not pop the corks on the champagne just yet.
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