FOA rolls out new reporting segments focused on retirement solutions

FOA said the new reporting segments more “closely align with business strategy” and include FAR and AAG

Finance of America Companies (FOA), the parent company for Finance of America Reverse (FAR) and American Advisors Group (AAG), announced on Tuesday that it established new financial reporting segments for greater focus to its retirement solutions products, including Home Equity Conversion Mortgages (HECMs) and proprietary reverse mortgages.

These changes are effective for the quarter ending on March 31, 2023, and are designed to inform investors and stakeholders about FOA’s retirement solutions — including its reverse mortgage offerings — as well as its strategic vision, company leaders said.

There are four new reporting segments: retirement solutions; portfolio management; corporate & other; and discontinued operations.

“Our new reporting structure is a natural evolution of our business strategy, following a series of transformational actions over the past year to reshape the business into a modern retirement solutions platform,” FOA CFO Johan Gericke said in a statement. “This new structure better aligns with our current brand and product capabilities across the business, while providing greater transparency to our investors.”

The retirement solutions segment is the one most applicable to the interest of the reverse mortgage industry. It contains the company’s reverse mortgage verticals, its home improvement lending segment, and encompasses all of FOA’s loan origination activity.

“[FOA] originates or acquires reverse mortgage loans through its subsidiary, [FAR],” the announcement said. “These originations were previously attributed to its reverse originations segment [and] will include originations of [HECM] and non-agency reverse mortgages primarily through company-owned field offices and a centralized retail platform operated under the name [AAG] and a network of independent mortgage brokers through its wholesale channel.”

The portfolio management segment includes product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services to the company. It will also provide to certain third-party funds on occasion and the team will act as a “bridge” between borrowers and investors, the company said.

The corporate & other segment includes the company’s corporate services groups, while “discontinued operations” is for elements of the business that have wound down but still are under certain reporting requirements.

FOA is scheduled to announce its Q1 2023 results on May 8. The company’s Q4 2022 results recorded $182 million in net losses, which FOA primarily attributed to the dissolution of its forward mortgage division late last year.

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