Guaranteed Rate this week walked away from negotiations to acquire Finance of America’s forward mortgage retail channel, which may result in FoA closing the division, sources with direct knowledge of the negotiations told HousingWire.
Meanwhile, FoA confirmed Friday that Finance of America Mortgage LLC (FAM), its forward mortgage company, will no longer fund and purchase loans through its wholesale and non-delegated correspondent channels.
Consequently, 2022 may be the year FoA exits the forward mortgage space entirely to focus on products such as reverse mortgages, commercial lending, and home improvement. Incenter Mortgage Advisors, which provides advisory services for MSR and whole loan trading, would remain part of the family of companies at FoA.
Last week, HousingWire reported that FoA was trying to sell its forward retail mortgage division amid the most challenging mortgage market in decades. The company signed a letter of intent with competitor G-Rate, but negotiations were fluid, multiple sources said.
FoA may exit the retail channel if it fails to sell the business, according to a source with direct knowledge of the negotiations. The source, who requested anonymity because details of negotiations were confidential, said there has been no decision about when it might occur.
“It is company policy not to comment on rumors or speculation in the market,” a spokesperson for FoA said. A Guaranteed Rate spokesperson said that the company had no comment.
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Regarding the forward mortgage wholesale and correspondent division, FoA sent Friday a note to business partners saying that Friday, Oct. 7 by 9:00 PM EST is the deadline to submit a new floating loan or complete a new forward lock.
It also added that Oct. 28 is the last day to lock loans currently in the pipeline and to submit a credit package on previously locked loans. Dec. 16 is the deadline to fund the wholesale pipeline and purchase a non-delegated correspondent pipeline.
“Please note that loans that are in process with both Finance of America Commercial and Reverse will not be impacted by this change. Finance of America Commercial and Finance of America Reverse will continue accepting new applications and operate business as usual,” the company wrote in the note, which was reviewed by HousingWire.
FoA originated $6 billion through the retail mortgage channel from January to June, down 50.7% year-over-year, according to Inside Mortgage Finance. The company ranked no. 33 among the top U.S. retail mortgage lenders in the period. The company originated $3 billion through the wholesale division between January and June, according to documents filed with the Securities and Exchange Commission (SEC).