Multichannel lender Finance of America (FoA) has laid off hundreds of employees across several rounds in the second and third quarters of 2022. The layoffs come amid a mortgage market downturn and a larger company restructuring, multiple current and former staffers told HousingWire.
The Texas-based company reduced its workforce across centralized operations and branches, cutting processors, underwriters, appraisers and the support team, with its most recent layoff on July 15, sources said.
The job cuts also affected FoA’s staff in the Philippines, where the company has employees “for clerical-type tasks, such as loan opening, disclosures, and appraisal checklists,” according to a former employee in a management position.
FoA did not respond to requests for comments.
Mario Glover, a former business support analyst, was laid off during a video call with his manager and a rep from human resources on July 15, just three months after he started working at the lender.
He did not receive advance notice – and, after two weeks, he’s still waiting for his two-weeks severance payment.
“I was there to assist internal employees with software and technical issues,” Glover said. “When I started, we probably saw 1,200 tickets a week, and now it’s between 500 and 600 – so, you don’t need the same number of people to support employees.”
Like many competitors, FoA’s traditional mortgage business has been affected by higher mortgage rates.
The company loan origination volume fell to $5.1 billion in the first quarter, down 26% from the prior quarter and 39% from the first quarter of 2021. Overall, FoA delivered a $64 million loss in the first quarter of 2022. (The company is expected to report second-quarter earnings on Thursday.)
FoA cut roughly 600 jobs between March 2021 and March 2022.
“As the volume goes down, the number of people you need goes down. And that’s hard. You’ve got to let people go,” Patti Cook, the former chief executive officer, told HousingWire in an interview in late March. “We have let people go both onshore, in the U.S., and we have a big operation in Manila – we’ve had to reduce staff there as well.”
FoA’s subsidiary Incenter operates a foreign branch in Manila for fulfillment transactional support, according to documents filed with the Securities and Exchange Commission (SEC). Cook said in March that the company had around 1,000 employees in the Philippines.
Besides the downturn in the market, sources said there’s another reason for the workforce reduction: FoA is restructuring its operations.
“The market downturn is a reason for the layoffs, for sure. But they are using that as an opportunity to restructure the organization with their ‘One FOA’ initiative,” a former manager said. “It’s not been very well-explained, but it’s essentially a flattening of the organization, taking the business channels out of their current silos.”
Amid changes to the nonbank lender’s C-Suite and business lines, veteran mortgage executive Bill Dallas left his position as president of Finance of America Mortgage in March.
Cook stepped down as CEO on June 30 due to an existing medical condition. During her period as CEO, the company made its debut on the New York Stock Exchange in April 2021, after merging with the blank-check company Replay Acquisition Corp.
Graham Fleming, president since October 2020, has been the interim CEO, responsible for the forward, reverse, commercial and home improvement lending segments, as well as lender services.
In her March interview with HousingWire, Cook said the company expected to consolidate the wholesale businesses under Joe Hullinger, the president of Finance of America Commercial.
Meanwhile, the call centers were expected to be under Kristen Sieffert, president of Finance of America Reverse. The former CEO said these were steps to optimize the company’s businesses amid the current environment.