In context: Vishal Garg, the Better Home & Finance founder whose 2021 video-call firing of 900 employees became a symbol of the company's turmoil, is trying to reclaim the CEO job just as Better bets its recovery on AI-driven mortgage processing. Garg says the board removed him at a pivotal moment, when the company's automation tools were starting to lift loan volume and push the lender closer to profitability.

Garg was replaced earlier this month by Daniel Lewis, a hedge fund manager who joined Better's board on July 27. Garg said Lewis had been advising him for about six months before taking the board seat, offering ideas on cost reductions and profitability.

Garg said Lewis then persuaded Better's directors to remove him and install Lewis as CEO roughly a week after he joined the board.

"He hoodwinked me," Garg told CNN. "He said he liked the company's strategy. He praised us on X and used that to get on our board and win our confidences."

Lewis wrote on X on Aug. 4: "There was never a $BETR without @vishal_better. That demands respect." That tweet is no longer available on X.

Better and Lewis did not respond to a request for comment.

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Garg said he accepts that Better's treatment of workers under his leadership damaged the company's standing. The 2021 mass layoff, delivered during a Zoom meeting shortly before the holidays, led to widespread criticism and was followed by a leave of absence. Better later faced a whistleblower lawsuit that was dropped, an SEC investigation that resulted in no action, and a 2023 SPAC merger that preceded a 93% decline in the company's stock.

Still, Garg said the board change came as Better's technology strategy was showing progress.

The company built AI models to automate mortgage-processing tasks that Garg said would normally require dozens of workers and several days to complete. Better tested those capabilities with Neo Home Loans, where Garg said productivity doubled and loan-origination costs fell 50%.

He said Better also signed partnerships this year with Intuit, Coinbase, and OpenAI to power mortgage services. The company has also developed a growing home equity line of credit business.

"We're winning. We've tripled loan volume. We're close to profitability," Garg said. "We were at the 5-yard line after taking the ball all the way down the field from the other side."

Better is trying to rebuild after the sharp drop in refinancing that followed the low-rate period of the pandemic. The company's annual sales fell from $1.5 billion in 2021 to $70 million in 2023 as mortgage rates rose and refinancing demand weakened. Garg said the company is now on track to generate $200 million in sales this year.

The company's market value has declined from $8 billion during the refinancing boom to about $300 million. Its shares have fallen 45% since Lewis took over as CEO, after already declining more than 16% this year before Garg's departure was announced.

Garg said Lewis' cost-saving recommendations were worthwhile, but he questioned whether the new CEO understood Better's product and technology strategy.

"(Lewis') thoughts about cost savings were good. His ideas about innovation were not," Garg argued. "It's so much easier when we're this close for someone to come in and say that they could have done better."

Garg remains on Better's board and said he has support from holders of Class B shares, including early investors, to regain the CEO role. He has hired Alex Spiro, a partner at Quinn Emanuel, and sent the board a letter seeking his return.

Garg said he would work for $1 a year until Better becomes profitable, then transition out of the CEO role. He said investors have contacted him since his removal, urging him to take the job back.

"It's not about me," Garg said. "I care about delivering savings to people and helping them live the American Dream. So when shareholders said, 'You need to take a back seat,' I complied."

"I suspect he always wanted to become CEO," Garg said. "The board made a mistake."

Image credit: CNN