Can You Really Buy A House Without Selling Your Crypto? | Vishal Garg

**Jason** (0:00)
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All right, everyone, very excited about this. We've gotten to know Vishal, who is the CEO and founder of Better. Really excited about this. The dream for this episode is we... I want to start macro, really talk about this... Basically, the mortgage industry as a whole, then get into Better, and I think you guys are the company...
I've talked to all the mortgage providers. You are the company that is the most innovative on two fronts, which is AI and crypto slash blockchain, whatever. I don't know how you refer to it. Maybe we can frame the problem or just the big societal view of the mortgage industry in general, and then that can guide us down.

**Vishal Garg** (1:03)
Okay, cool. I think if you start right from the top, there's about 15 trillion of mortgages out there in the United States.
They're all funded, 95% of them are government guaranteed, Fannie, Freddie, FHA, VA. The remaining 5% are in the banking system, which is effectively government guaranteed post the financial crisis. And so you have a government guaranteed asset that's permeated throughout the financial system. It yields about 6.5%.
And it's funded by deposits that are also government guaranteed, 2.5%. So you have about 400 basis points per year on $15 trillion, $600 billion a year of intermediation expense. Government guaranteed deposits funding government guaranteed assets. And 300 basis points of that 400 basis points is lost to costs in the banking system. And those costs are people, processes, making 550 page PDFs. So in America today, with blockchain and tokenization and AI, we are living every day in a world where US households, lose $450 billion a year to the PDF manufacturing process.

**Jason** (2:24)
And that's the mortgage industry as we know it.

**Vishal Garg** (2:26)
That is true.

**Jason** (2:27)
Those are margins. That's the margin of the mortgage industry.

**Vishal Garg** (2:30)
Yeah, it's a PDFocracy, right? And $450 billion across 100 million US households that own a home, we're talking $4,500 per person per year.
I mean, it's massive. And so the goal is, how can we use the latest technology to take this process of making these mortgage documents cheaper, faster, easier? How can we use it to make it cleaner? How can we enable trust where post the financial crisis, there is been nearly none? And in doing that, make homeownership more affordable and accessible for all Americans.

**Jason** (3:12)
How should someone think about Better's business? Because I've been following you guys for a while, have heard, you know, spoke as prep for this podcast, spoke to a couple of your investors. And I'd be curious how you think about what it is today and what the evolution has looked like.

**Vishal Garg** (3:25)
Okay. So Better's vision is to make home finance cheaper, faster and easier. To have the highest approval rate and the lowest interest rate across the full range of products that any American consumer can qualify, to buy a home, refinance a home, or get home equity out of their home.
And we're a long way into our journey here. We've been alive for about 10 years. We've been making mortgages. We've made 110 billion of them. And in that process, we have first started with machine learning to automate the process, built a rules engine that matched investors, 45 different investors in the mortgage market with consumers directly. Then over the past five years, we used the learning data from creating these mortgages to put an AI loan officer, an AI loan processor, and an AI loan underwriter in place that now automates and makes the process of making that mortgage, of underwriting that mortgage into minutes from something that used to take 21 days or more.
And we're just getting started. We're almost reincarnated as the leading AI mortgage platform built on the learning data and the process mapping and the rich context graph that we created in our first iteration as a digital mortgage company. And we think the AI mortgage business is going to be something that will be really meaningful for American consumers because it will help everyone afford to be part of the American dream of home ownership.

**Jason** (4:57)
Yeah. What's the scale and scope of the business? However you look at it, loan volume, customer serves, market position, originations.

**Vishal Garg** (5:05)
Yeah. So between ourselves and our partners, we're at about 8 billion annualized origination rate. So a decent size fintech.