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What changed in Finance of America Companies Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Finance of America Companies Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+720 added−687 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-14)

Top changes in Finance of America Companies Inc.'s 2025 10-K

720 paragraphs added · 687 removed · 518 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

53 edited+23 added−42 removed32 unchanged
Biggest changeFAH is the parent of a lending company, Finance of America Reverse LLC (“FAR”), while Incenter is the parent of operating service companies (together with FAR, the “operating subsidiaries”) that provide capital markets and portfolio management capabilities. 5 Through the end of the third fiscal quarter of 2022, the Company was principally focused on offering (1) a wide array of loan products throughout the United States of America (the “U.S.”), including reverse mortgage loans, traditional mortgage loans, business purpose loans to residential real estate investors, and home improvement loans, and (2) complementary lender services, such as title insurance and settlement services, to mortgage businesses.
Biggest changeFAH is the parent of a lending company, Finance of America Reverse LLC (“FAR”), while Incenter is the parent of operating service companies (together with FAR, the “operating subsidiaries”) that provide capital markets and portfolio management capabilities.
Our Portfolio Management segment provides structuring and product development expertise as well as broker/dealer and institutional asset management capabilities, which facilitates innovation and the successful monetization of our loans. We securitize HECM into Home Equity Conversion Mortgage-Backed Securities (“HMBS”), which Ginnie Mae guarantees, and sell the HMBS in the secondary market while retaining the rights to service the HECM.
Our Portfolio Management segment provides structuring and product development expertise as well as broker/dealer and institutional asset management capabilities, which facilitates innovation and the successful monetization of our loans. We securitize HECM loans into Home Equity Conversion Mortgage-Backed Securities (“HMBS”), which Ginnie Mae guarantees, and sell HMBS in the secondary market while retaining the rights to service the HECM loans.
Retirement Solutions Our Retirement Solutions segment conducts all of our Company’s loan origination activity, including the origination and acquisition of HECM and non-agency reverse mortgage loans through both the retail and TPO channels.
Retirement Solutions Our Retirement Solutions segment conducts all of our Company’s loan origination activity, including the origination and acquisition of HECM loans and non-agency reverse mortgage loans through both the retail and TPO channels.
Excluded from the term “investment securities,” among other things, are U.S. federal government securities and securities issued by majority owned 13 subsidiaries that are not themselves investment companies and are not relying on the exceptions from the definition of investment company set forth in Section 3(c)(1) or 3(c)(7) of the Investment Company Act.
Excluded from the term “investment securities,” among other things, are U.S. federal government securities and securities issued by majority owned subsidiaries that are not themselves investment companies and are not relying on the exceptions from the definition of investment company set forth in Section 3(c)(1) or 3(c)(7) of the Investment Company Act.
Any increase in these competitive pressures could be detrimental to our business. 10 Intellectual Property We use a combination of proprietary and third-party intellectual property, all of which we believe maintain and enhance our competitive position and protect our products. Such intellectual property includes owned or licensed trademarks, trademark applications, and domain names.
Any increase in these competitive pressures could be detrimental to our business. Intellectual Property We use a combination of proprietary and third-party intellectual property, all of which we believe maintain and enhance our competitive position and protect our products. Such intellectual property includes owned or licensed trademarks, trademark applications, and domain names.
Through FAR, the Company originates, acquires, and services (in partnership with third-party subservicers) home equity conversion mortgages (“HECM”), which are originated pursuant to the Federal Housing Administration (the “FHA”) HECM program and are insured by the FHA, and non-agency reverse mortgage loans, which are not insured by the FHA.
Through FAR, the Company originates, acquires, and services (in partnership with third-party subservicers) home equity conversion mortgage (“HECM”) loans, which are originated pursuant to the Federal Housing Administration (the “FHA”) HECM program and are insured by the FHA, and non-agency reverse mortgage loans, which are not insured by the FHA.
We also monitor the types of benefits available in the market and consider adding new benefits from time to time in order to better meet the needs of our employees. Regulation Our consumer-facing business markets and provides services through a number of different channels across the U.S.
We also monitor the types of benefits available in the market and consider adding new benefits from time to time in order to better meet the needs of our employees. 10 Regulation Our consumer-facing business markets and provides services through a number of different channels across the U.S.
Consumer Financial Protection Bureau The CFPB directly impacts the regulation of reverse mortgage loan originations and servicing in a number of ways. First, the CFPB has rulemaking authority with respect to many of the federal consumer protection laws applicable to mortgage lenders and servicers, including TILA and RESPA.
Consumer Financial Protection Bureau The CFPB directly impacts the regulation of mortgage loan originations and servicing in a number of ways. First, the CFPB has rulemaking authority with respect to many of the federal consumer protection laws applicable to mortgage lenders and servicers, including TILA and RESPA.
All consumer-facing employees are assigned required courses that educate them on compliance with 11 consumer protection laws for the industries in which we operate.
All consumer-facing employees are assigned required courses that educate them on compliance with consumer protection laws for the industries in which we operate.
FOAF wholly owns Finance of America Holdings LLC (“FAH”) and Incenter LLC (“Incenter” and collectively, with FOA Equity, FOAF, and FAH, known as “holding company subsidiaries”).
FOAF wholly owns Finance of America Holdings LLC (“FAH”) and Incenter LLC (“Incenter” and collectively, with FOA Equity, FOAF, and FAH, known as “holding 5 company subsidiaries”).
We cannot assure you that the SEC or its staff will not take action that results in our or one or more of our subsidiary’s failure to maintain an exclusion or exemption from the Investment Company Act.
We cannot assure you that the SEC or its staff will not take action that results in our or one or more of our subsidiaries’ failure to maintain an exclusion or exemption from the Investment Company Act.
We are required to comply with numerous federal and state consumer protection and other laws, including, but not limited to: • restrictions on the manner in which consumer loans are marketed, originated, and serviced, including, but not limited to, the making of required consumer disclosures, such as the Truth in Lending Act (“TILA”) (which regulates mortgage loan origination activities, imposes requirements related to advertising, requires certain disclosures be made to mortgagors regarding terms of mortgage financing, and regulates certain mortgage servicing activities), the Home Equity Loan Consumer Protection Act (which amends TILA to require additional disclosures relating to home equity loans and to regulate advertising of home equity loans), the Fair Credit Reporting Act (“FCRA”) (which regulates the use and reporting of information related to the credit history of consumers), the Equal Credit Opportunity Act (“ECOA”) (which prohibits discrimination on the basis of age, race, and certain other characteristics in the extension of credit), the Fair Housing Act (which prohibits discrimination in housing on the basis of race, sex, national origin, and certain other characteristics), the Real Estate Settlement Procedures Act (“RESPA”) (which governs certain mortgage loan origination activities and practices and the actions of servicers related to escrow accounts, transfers, lender-placed insurance, loss mitigation, error resolution, and other customer communications), the Mortgage Acts and Practices Rule (which prohibits deceptive acts and practices in the marketing of mortgage loans), and similar state laws; • federal laws that require and govern communications with consumers or reporting of public data such as the Gramm-Leach-Bliley Act (“GLBA”), which requires initial and periodic communication with consumers on privacy matters and the maintenance of privacy regarding certain consumer data in our possession, and the Home Mortgage Disclosure Act (“HMDA”), together with its implementing regulations (Regulation C), which requires reporting of certain public loan data; 12 • federal disclosure requirements including those in Regulation AB under the Securities Act of 1933, as amended (the “Securities Act”), which requires registration, reporting, and disclosure for mortgage-backed securities; • state and federal restrictions on the marketing activities conducted by telephone, mail, email, mobile device, or the internet, including the Telemarketing Sales Rule, the Telephone Consumer Protection Act, state telemarketing laws, federal and state privacy laws, the Controlling the Assault of Non-Solicited Pornography and Marketing Act, and the Federal Trade Commission Act, and their accompanying regulations and guidelines; • federal and state laws requiring company, branch, and individual licensing for the solicitation, brokering, or third-party processing of consumer loans, including the Secure and Fair Enforcement for Mortgage Licensing Act; • the Electronic Fund Transfer Act (which regulates electronic fund transfers to and from individual consumers); • federal and state laws relating to the retention of records; • federal and state laws relating to identity theft and elder abuse; • the Fair Debt Collection Practices Act (the “FDCPA”), which regulates the timing and content of communications on debt collections; • the California Consumer Privacy Act, which provides California consumers with privacy rights and increases the privacy and security obligations of entities handling certain personal information of such consumers; • the Servicemembers’ Civil Relief Act; • the anti-money laundering and counter-terrorist financing provisions of the Bank Secrecy Act, including the USA Patriot Act, which require non-bank lenders to monitor for, detect, and report suspicious activity to the U.S.
We are required to comply with numerous federal and state consumer protection and other laws, including, but not limited to: • restrictions on the manner in which consumer loans are marketed, originated, and serviced, including, but not limited to, the making of required consumer disclosures, such as the Truth in Lending Act (“TILA”) (which regulates mortgage loan origination activities, imposes requirements related to advertising, requires certain disclosures be made to mortgagors regarding terms of mortgage financing, and regulates certain mortgage servicing activities), the Home Equity Loan Consumer Protection Act (which amends TILA to require additional disclosures relating to home equity loans and to regulate advertising of home equity loans), the Fair Credit Reporting Act (“FCRA”) (which regulates the use and reporting of information related to the credit history of consumers), the Equal Credit Opportunity Act (“ECOA”) (which prohibits discrimination on the basis of age, race, and certain other characteristics in the extension of credit), the Fair Housing Act (which prohibits discrimination in housing on the basis of race, sex, national origin, and certain other characteristics), the Real Estate Settlement Procedures Act (“RESPA”) (which governs certain mortgage loan origination activities and practices and the actions of servicers related to escrow accounts, transfers, lender-placed insurance, loss mitigation, error resolution, and other customer communications), the Mortgage Acts and Practices Rule (which prohibits deceptive acts and practices in the marketing of mortgage loans), and similar state laws; • federal laws that require and govern communications with consumers or reporting of public data such as the Gramm-Leach-Bliley Act (“GLBA”), which requires initial and periodic communication with consumers on privacy matters and the maintenance of privacy regarding certain consumer data in our possession, and the Home Mortgage Disclosure Act (“HMDA”), together with its implementing regulations (Regulation C), which requires reporting of certain public loan data; • federal disclosure requirements including those under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to our publicly-traded Class A Common Stock and our MBS, as applicable; • state and federal restrictions on the marketing activities conducted by telephone, mail, email, mobile device, or the internet, including the Telemarketing Sales Rule, the Telephone Consumer Protection Act, state telemarketing laws, federal and state privacy laws, the Controlling the Assault of Non-Solicited Pornography and Marketing Act, and the Federal Trade Commission Act, and their accompanying regulations and guidelines; • federal and state laws requiring company, branch, and individual licensing for the solicitation, brokering, or third-party processing of consumer loans, including the Secure and Fair Enforcement for Mortgage Licensing Act; • the Electronic Fund Transfer Act (which regulates electronic fund transfers to and from individual consumers); • federal and state laws relating to the retention of records; • federal and state laws relating to identity theft and elder abuse; • the Fair Debt Collection Practices Act (the “FDCPA”), which regulates the timing and content of communications on debt collections; • the California Consumer Privacy Act, which provides California consumers with privacy rights and increases the privacy and security obligations of entities handling certain personal information of such consumers; • the Servicemembers’ Civil Relief Act; • the anti-money laundering and counter-terrorist financing provisions of the Bank Secrecy Act, including the USA Patriot Act, which require non-bank lenders to monitor for, detect, and report suspicious activity to the U.S.
We are a leading provider of home equity-based financing solutions for a modern retirement, offering innovative financing tools to help homeowners aged 55 and over make the most of their housing wealth and achieve a more secure retirement. Today, we are principally focused on offering reverse mortgage loan products throughout the U.S.
We are a leading provider of home equity-based financing solutions for a modern retirement, offering innovative financing tools to help homeowners aged 55 and over make the most of their housing wealth and achieve a more secure retirement. We are principally focused on offering reverse mortgage loan products and certain traditional home equity loan products throughout the U.S.
Treasury’s Financial Crimes Enforcement Network; • restrictions imposed by the rules promulgated by the Office of Foreign Assets Control; and • restrictions imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and current or future rules promulgated thereunder, including, but not limited to, limitations on fees charged by mortgage lenders, mortgage broker disclosures, and rules promulgated by the CFPB, which was created pursuant to Title X of the Dodd-Frank Act, also known as the Consumer Financial Protection Act of 2010 (the “CFPA”).
Treasury’s Financial Crimes Enforcement Network; • restrictions imposed by the rules promulgated by the Office of Foreign Assets Control; and 11 • restrictions imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and current or future rules promulgated thereunder, including, but not limited to, limitations on fees charged by mortgage lenders, mortgage broker disclosures, and rules promulgated by the Consumer Financial Protection Bureau (the “CFPB”), which was created pursuant to Title X of the Dodd-Frank Act, also known as the Consumer Financial Protection Act of 2010 (the “CFPA”).
Once implemented, the HMBS 2.0 program will enable us to securitize into HMBS additional HECM that are required to be bought out of pools of HECM securitized pursuant to Ginnie Mae’s existing HMBS program or otherwise not eligible for securitization pursuant to Ginnie Mae’s existing HMBS program (subject to expanded eligibility parameters applicable to the HMBS 2.0 program), increasing the HECM that we are able to securitize into HMBS.
If implemented, the HMBS 2.0 program will enable us to securitize into HMBS additional HECM loans that are required to be bought out of pools of HECM loans securitized pursuant to Ginnie Mae’s existing HMBS program or otherwise not eligible for securitization pursuant to Ginnie Mae’s existing HMBS program (subject to expanded eligibility parameters applicable to the HMBS 2.0 program), increasing the HECM loans that we are able to securitize into HMBS.
As we continue to expand our product offerings and enhance our digital capabilities, we expect to increase the amount of intellectual property that we use and rely upon to operate our business. The digital channel that we are working to build will in particular be reliant upon a combination of new proprietary and third-party intellectual property.
As we continue to expand our product offerings and enhance our digital capabilities, we expect to increase the amount of intellectual property that we use and rely upon to operate our business. The digital capabilities that we continue to build and enhance will in particular be reliant upon a combination of new proprietary and third-party intellectual property.
Our business is generally subject to seasonal trends with activity generally decreasing during the winter months. Our lowest revenue and net income levels during the year have historically been in the first quarter, but this is not indicative of future results. Employees and Human Capital Resources As of December 31, 2024, we had 747 U.S.-based employees.
Our business is generally subject to seasonal trends with activity generally decreasing during the winter months. Our lowest revenue and net income levels during the year have historically been in the first quarter, but this is not indicative of future results. Employees and Human Capital Resources As of December 31, 2025, we had 784 U.S.-based employees.
We make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), available free of charge under the Investor Relations section of our investor oriented website as soon as reasonably practicable after we electronically file the reports with, or furnish them to, the SEC.
We make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, available free of charge under the Investor Relations section of our investor-oriented website as soon as reasonably practicable after we electronically file the reports with, or furnish them to, the SEC.
Cyclicality and Seasonality The volume of reverse mortgage loan originations is affected by consumer demand for reverse mortgage loans and the market for buying, selling, financing, and/or refinancing residential real estate, which in turn, is affected by the national economy, regional trends, property valuations, interest rates, socio-economic trends, and by state and federal regulations and programs which may encourage/accelerate or discourage/slow-down certain real estate trends.
Cyclicality and Seasonality The volume of home-equity based loan originations is affected by consumer demand for home-equity based loans and the market for buying, selling, financing, and/or refinancing residential real estate, which in turn, is affected by the national economy, regional trends, property valuations, interest rates, socio-economic trends, and by state and federal regulations and programs which may encourage/accelerate or discourage/slow-down certain real estate trends.
We also require our entire workforce to periodically complete discrimination and harassment prevention training courses to ensure they understand what constitutes unlawful sexual harassment and discrimination, employees’ rights, and available forums for adjudicating complaints. We send quarterly reminders to employees about the Company’s anonymous hotline and encourage employees to utilize the hotline to report complaints and concerns.
We also require our entire workforce to complete discrimination and harassment prevention training courses on an annual basis to ensure they understand what constitutes unlawful sexual harassment and discrimination, employees’ rights, and available forums for adjudicating complaints. We send quarterly reminders to employees about the Company’s anonymous hotline and encourage employees to utilize the hotline to report complaints and concerns.
The CFPB’s jurisdiction includes those persons originating, brokering, or servicing reverse mortgage loans and those persons performing loan modification or foreclosure relief services in connection with such loans. Investment Company Act Considerations We conduct our operations so that we are not required to register as an investment company under the Investment Company Act.
The CFPB’s jurisdiction includes those persons originating, brokering, or servicing reverse mortgage loans and traditional home equity loan products and those persons performing foreclosure relief services in connection with such loans. Investment Company Act Considerations We conduct our operations so that we are not required to register as an investment company under the Investment Company Act.
For example, in 2023, we launched a non-agency second lien reverse mortgage loan product, second in priority behind the first lien of an existing traditional forward mortgage loan or home equity line of credit collateralized by the same 6 mortgaged property.
For example, we previously launched a non-agency second lien reverse mortgage loan product, second in priority behind the first lien of an existing traditional mortgage loan or home equity line of credit collateralized by the same mortgaged property.
Therefore, a reverse mortgage loan represents a practical solution for a significant portion of the senior population, but only 2% of the population aged 62 and over currently utilizes a reverse mortgage loan according to a report published by Reverse Mortgage Insight from June 2022.
While a reverse mortgage loan represents a practical solution for a significant portion of the senior population, only 2% of the population aged 62 and over utilizes a reverse mortgage loan according to a report published by Reverse Mortgage Insight from June 2022.
Rather, we will be primarily engaged in the non-investment company businesses of our subsidiaries. There can be no assurance that the laws and regulations governing our Investment Company Act status will not change in a manner that adversely affects our operations.
Rather, we will be primarily engaged in the non-investment company businesses of our subsidiaries (i.e. originating and acquiring mortgage loans and mortgage-related assets). There can be no assurance that the laws and regulations governing our Investment Company Act status will not change in a manner that adversely affects our operations.
However, according to data from Statista, over 79% of Americans aged 65 and over own their home. Further, based on quarterly estimates published by the National Reverse Mortgage Lenders Association in conjunction with RiskSpan, Inc., homeowners aged 62 and over have $14 trillion in home equity as of the third quarter of 2024.
Based on quarterly estimates published by the National Reverse Mortgage Lenders Association in conjunction with RiskSpan, Inc., homeowners aged 62 and over have $14.66 trillion in home equity as of the third quarter of 2025. This is further supported by data from Statista, which states that over 79% of Americans aged 65 and over own their home.
These retained investments are a source of growing and recurring interest and other servicing-related income. The Portfolio Management segment primarily generates revenue from the net interest income and fair value changes on portfolio assets, monetized through securitization, sale, or other financing of those assets.
The Portfolio Management segment primarily generates revenue from the net interest income and fair value changes on portfolio assets, monetized through securitization, sale, or other financing of those assets.
Of these, there were 745 full-time and two part-time employees. We had an additional six employees based in the Philippines. As of December 31, 2024, we also employed 8 full-time contractors in the U.S. and 98 part-time contractors in the Philippines. None of our employees are represented by a labor union, and we consider our employee relations to be good.
Of these, there were 782 full-time and two part-time employees. As of December 31, 2025, we also employed 48 contractors in the U.S. and 93 contractors in 9 the Philippines. None of our employees are represented by a labor union, and we consider our employee relations to be good.
Once originated, the loans are transferred to our Portfolio Management segment, and any future fair value adjustments, including interest earned, on these originated loans are reflected in the revenues of our Portfolio Management segment until final disposition.
Once originated, the loans are transferred to our Portfolio Management segment, and any future fair value adjustments, including interest earned, on these originated loans are reflected in the revenues of our Portfolio Management segment until final disposition. 8 Portfolio Management Our Portfolio Management segment provides product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services to the Company.
We are licensed as a loan originator in all 50 states and the District of Columbia and also are licensed as a loan servicer and loan broker in a number of states and jurisdictions in which such licenses are required.
Accordingly, we must comply with state laws and licensing requirements in all of the states in which we conduct business. We are licensed as a loan originator in all 50 states and the District of Columbia and also are licensed as a loan servicer in a number of states and jurisdictions in which such licenses are required.
We have launched several non-agency reverse mortgage loan products to serve the U.S. senior population and have plans for additional innovative products to satisfy this vast and largely underserved market.
We have launched several non-agency reverse mortgage loan products to serve the U.S. senior population. At the same time, we continuously look to develop and launch new products to satisfy this vast and largely underserved market.
We are a leader in this market and we are focused on developing and offering products for borrowers with interest in using a reverse mortgage loan as a retirement planning tool, which we believe will continue to increase our addressable customer base and ultimately raise our origination volumes.
These efforts exemplify our commitment to meet and serve new kinds of borrowers. We are a leader in this market and we are focused on developing and offering products for borrowers with interest in using home equity-based financing solutions as retirement planning tools, which we believe will continue to increase our addressable customer base and ultimately raise our origination volumes.
We both securitize non-agency reverse mortgage loans into mortgage-backed securities sold to investors and sell them as whole loans to investors. We may also decide to strategically hold certain non-agency reverse mortgage loans for investment.
We either securitize non-agency reverse mortgage loans into MBS sold to investors or sell them as whole loans to investors, while retaining the right to service the loans. We may also decide to strategically 7 hold certain non-agency reverse mortgage loans for investment.
The launch and expansion of the second lien product has enabled us to serve borrowers who already have and desire to maintain a low-rate primary mortgage but want the convenience of a flexible second lien with no required monthly principal and interest payments, exemplifying our commitment to meet and serve new kinds of borrowers whose needs are not satisfied by existing available products.
This second lien product has enabled us to serve borrowers who already have and desire to maintain a low-rate primary mortgage but want the convenience of a flexible second lien loan with no required monthly principal and interest payments.
Employee Training and Development In connection with the unification under the “Finance of America” brand, we implemented internal training sessions, development workshops, and messaging to align around and emphasize our core values.
Employee Training and Development We have implemented internal training sessions, development workshops, and messaging to align around and emphasize our core values.
Our strategy and long-term growth initiatives are built upon a few key fundamental factors: • We are focused on growing our core retirement solutions business, which benefits from demographic and economic tailwinds.
Our strategy and long-term growth initiatives are built upon a few key fundamental factors: • We are focused on growing our core retirement solutions business in order to capitalize on the market opportunity described above.
Our consumer-facing business leaders interface directly with the investor-facing professionals in our Portfolio Management segment, facilitating the development of attractive lending solutions for our customers with the confidence that the loans we generate can be efficiently and profitably sold to a deep pool of investors, either directly via whole-loan sales or indirectly via the issuance and sale of mortgage-backed securities.
Our consumer-facing business leaders interface directly with the investor-facing professionals in our Portfolio Management segment, facilitating the development of attractive lending solutions for our customers with the confidence that the loans we generate can be efficiently and profitably monetized through sale or securitization to a deep pool of investors, which minimizes capital at risk, with the Company often retaining a future performance-based participation interest in the underlying cash flows of our monetized loans.
When HECM are not eligible for securitization into HMBS or are required to be bought out of a pool of HECM previously securitized into an HMBS, we securitize them into privately placed mortgage-backed securities or hold them for investment. In November 2024, Ginnie Mae announced the finalized term sheet for its HMBS 2.0 program expected to be implemented in 2025.
When HECM loans are not eligible for securitization into HMBS or are required to be bought out of a pool of HECM loans previously securitized into HMBS, we convey the HECM loans to HUD or liquidate them in accordance with program requirements, securitize them into privately placed MBS, or hold them for investment.
We believe our involvement in the loan process throughout its life cycle coupled with our commitment to our mission gives us the ability to deliver a value proposition unmatched in the industry.
We believe our involvement in the loan process throughout its life cycle coupled with our commitment to our purpose gives us the ability to deliver a value proposition unmatched in the industry. Our Segments Our business operates through two reportable segments: Retirement Solutions and Portfolio Management. A description of the business conducted by each of these segments is provided below.
In 2024, our Company entered into two new warehouse lines of credits with financial institutions that were new to reverse mortgage lending. As of December 31, 2024, we had $1.6 billion of committed or uncommitted loan funding capacity, comprised of 14 lending facilities with 11 different counterparties.
We maintain and monitor our liquidity in order to fund our loan origination business, manage day-to-day operations, and protect against unforeseeable market events. In 2025, our Company entered into two new warehouse lending facilities. As of December 31, 2025, we had $1.7 billion of committed or uncommitted loan funding capacity, comprised of 15 lending facilities with 11 different counterparties.
The direct connections to investors, provided by our Financial Industry Regulatory Authority (“FINRA”) registered broker-dealer, allows us to innovate and manage risk through better price and product discovery. Given our scale, we are able to work directly with investors and, where appropriate, retain assets on the balance sheet for attractive return opportunities.
Our Portfolio Management team acts as the connector between borrowers and investors. The direct connections to investors, provided by our Financial Industry Regulatory Authority (“FINRA”) registered broker-dealer, allows us to innovate and manage risk through better price and product discovery.
From time to time, we use our investor oriented website as a channel of distribution of material Company information.
Additional Information To learn more about Finance of America Companies Inc., please visit our investor-oriented website at www.financeofamericacompanies.com and our consumer-oriented website at www.financeofamerica.com. From time to time, we use our investor-oriented website as a channel of distribution of material Company information.
While the number of Americans at retirement age is increasing and projected to continue to increase, Americans are often not financially prepared for retirement, with the aggregate retirement savings shortfall estimated to be $3.68 trillion, according to an estimate from the Employee Benefit Research Institute.
While the number of Americans at retirement age is increasing, Americans are often not financially prepared for retirement, with the aggregate retirement savings shortfall estimated to be $4 trillion, according to a recent estimate from Athene. Further, according to data recently published by Vanguard, roughly 60% of Americans are not on track to meet their retirement spending needs.
We believe the U.S. home equity market opportunity is strong and that reverse mortgages are a key component in addressing an existing underserved market of seniors in the U.S.
We believe the U.S. home equity-based lending market opportunity is strong and that home equity-based financing solutions are a key component in addressing an existing underserved market of seniors in the U.S. Based on U.S. census data, from 2024 through 2026, 11,400 people per day in the U.S. have turned or will turn 65 years old.
Competition We compete with third-party businesses such as wholesale and retail reverse mortgage origination businesses, including bank and non-bank financial services companies focused on originating reverse mortgages.
Competition We compete with businesses such as wholesale and retail reverse mortgage and traditional home equity loan origination businesses, including bank and non-bank financial services companies focused on originating reverse mortgages and traditional home equity loan products. In reverse mortgage originations, we are and have been a market leader since certain banks exited the space approximately 15 years ago.
FOA was incorporated in Delaware on October 9, 2020 and became a publicly-traded company on the NYSE in April 2021, with trading beginning on April 5, 2021 under the ticker symbol “FOA.” FOA has a controlling financial interest in FOA Equity. FOA Equity owns all of the outstanding equity interests in Finance of America Funding LLC (“FOAF”).
FOA continues to maintain its primary listing on the NYSE and trades under the same “FOA” ticker symbol on both exchanges. FOA has a controlling financial interest in FOA Equity. FOA Equity owns all of the outstanding equity interests in Finance of America Funding LLC (“FOAF”).
We are similarly engaging in efforts to refine the systems used by our mortgage broker partners to improve the efficiency and ease of originations via our TPO channel.
Additionally, in 2025 we engaged in efforts to refine the systems used by our mortgage broker partners to improve the efficiency and ease of originations via our TPO channel. We believe that these efforts will (i) increase brand and product recognition among customers and mortgage brokers, (ii) improve overall customer experience, and (iii) ultimately raise our origination volumes.
Our lending model is supported by a robust funding structure financed by an established and diversified mix of capital partners. We maintain and monitor our liquidity in order to fund our loan origination business, manage day-to-day operations, and protect against unforeseeable market events.
This demonstrates the high quality and liquidity of the loan products we originate, the deep relationships we have with our investors, and the resilience of our business model in many economic environments. Our lending model is supported by a robust funding structure financed by an established and diversified mix of capital partners.
As of December 31, 2024, we had $0.7 billion of liquidity sources 7 available to fund continuing operations, comprised of (i) $47.4 million of cash and cash equivalents and (ii) $0.7 billion of undrawn warehouse lines of credit. We believe that our culture plays a significant role in producing superior outcomes for both our customers and our business.
As of December 31, 2025, we had $0.6 billion of liquidity sources available to fund operations, comprised of (i) $89.5 million of cash and cash equivalents and (ii) $0.5 billion of undrawn warehouse facilities and other lines of credit. We are also undertaking initiatives to enhance our internal servicing capabilities.
Because we are not a depository institution, we generally do not benefit from federal preemption of state mortgage lending, loan servicing, or debt collection licensing and regulatory requirements. Accordingly, we must comply with state laws and licensing requirements in all of the states in which we conduct business.
Furthermore, there may be additional federal or state laws that place additional obligations on originators and servicers of residential loans. 12 Because we are not a depository institution, we generally do not benefit from federal preemption of state mortgage lending, loan servicing, or debt collection licensing and regulatory requirements (though we do benefit from federal interest-rate preemption for certain first-lien, dwelling-secured loans under the Depository Institutions Deregulation and Monetary Control Act).
In the past we have been subject to inquiries from, and in certain instances have entered into settlement agreements with, state regulators that had the power to revoke our license or make our continued licensure subject to compliance with a consent order. Some states have special rules that govern mortgage loan servicing practices, such as California’s Homeowner’s Bill of Rights.
Some states have special rules that govern mortgage loan servicing practices, such as California’s Homeowner’s Bill of Rights. Failure to comply with these rules can result in delays or rescission of foreclosure and subject the servicer to penalties and damages.
The capabilities provided by the Portfolio Management segment allowed us to complete several issuances and sales of mortgage-backed securities backed by our loan products in 2024, including our first issuance and sale of mortgage-backed securities backed exclusively by our non-agency second lien reverse mortgage loan product, demonstrating the high quality and liquidity of the loan products we originate, the deep relationships we have with our investors, and the resilience of our business model in many economic environments.
The capabilities provided by the Portfolio Management segment allowed us to complete several sales and issuances of MBS backed by our loan products in 2025, including a nearly $2 billion securitization of non-agency reverse mortgage loans in September 2025, the largest in Company history.
We originate loans through a retail channel (consisting primarily of a centralized retail platform) and a third-party originator (“TPO”) channel (consisting primarily of a network of mortgage brokers). In 2024, we took steps to streamline and enhance our marketing and originations operations and digital capabilities.
We originate reverse mortgage loans through a retail channel (consisting primarily of a centralized retail platform) and a third-party originator (“TPO”) channel (consisting primarily of a network of mortgage brokers). In 2026, we have also begun originating traditional home equity loans initially through an AI platform provided by the Better Home & Finance Holding Company (“Better”).
The unification of the Finance of America Reverse LLC (FAR) and American Advisors Group (AAG) brands under the single brand name “Finance of America” described below under “Organizational Transformation— Integration of AAG/Bloom Assets; Brand Unification ” fostered a fully unified culture driven by a core set of values adopted across our organization in furtherance of Finance of America’s mission to help people live retirement to the fullest.
We have fostered a fully unified culture driven by a core set of values adopted across our organization in furtherance of Finance of America’s purpose to help homeowners unlock the joy that comes from realizing the full potential of their retirement.
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However, as described under “Organizational Transformation” below, during the fourth quarter of 2022 and calendar year 2023, the Company exited multiple business lines, including its traditional mortgage lending segment, its commercial lending segment, its home improvement lending business, and its lender services businesses, and shifted its focus to developing a streamlined retirement solutions business.
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FOA was incorporated in Delaware on October 9, 2020 and became a publicly-traded company on the New York Stock Exchange (the “NYSE”) in April 2021, with trading beginning on April 5, 2021. On August 15, 2025, FOA’s Class A Common Stock also began trading on NYSE Texas, Inc. (“NYSE Texas”).
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In 2024, the Company focused on unifying and enhancing its streamlined retirement solutions business and solidifying its position as a leading provider of home equity-based financing solutions for a modern retirement.
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We anticipate pursuing partnerships with mortgage servicers in the future to make our second lien reverse mortgage loan product available to their eligible traditional mortgage customers with a streamlined approval process, which we expect to broaden the reach of, and raise originations volumes for, the second lien product.
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We seek to programmatically and profitably monetize our loans, which minimizes capital at risk, while often retaining a future performance-based participation interest in the underlying cash flows of our monetized loans.
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Additionally, in October 2025 we announced that we will begin to originate certain traditional home equity loan products. This marks the first time that we will originate traditional home equity loans and enables us to serve potential borrowers who need higher loan-to-value solutions than those provided by our suite of reverse mortgage loan products.
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Based on U.S. census data, the U.S. population aged 65 and over grew nearly five times faster than the total population from 1920 to 2020, with the decade before 2020 experiencing the fastest increase in the U.S. population aged 65 and over since 1880 to 1890.
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Further, in December 2025, we announced a strategic partnership with funds managed by Blue Owl Capital, Inc. (“Blue Owl”), which includes a joint innovation and product-development initiative focused on the continuous rollout of new, differentiated financial products tailored for people looking to maximize freedom, security, and opportunity throughout their 6 retirement.
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According to data published by the Administration for Community Living (an operating division of the U.S.
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In 2025, we continued to take steps to enhance our marketing and digital capabilities. In the first quarter of 2025, we completed the migration of our telephony platform, and we continued to enhance its performance throughout the year.
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Department of Health and Human Services), this growth resulted in 57.8 million Americans aged 65 and over in 2022, representing more than 1 in every 6 Americans, and the population of Americans aged 65 and over is projected to reach over 78 million by 2040.
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In the second quarter of 2025, we launched and transitioned to our new brand platform, “A Better Way with FOA,” alongside the launch of a national advertising campaign, which integrates a mix of traditional and online mediums.
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In 2024, we invested more capital and resources into the second lien product, including marketing and digital efforts, in order to expand its reach through a leading broker facing platform and expansion of the product to additional states.
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This represents a shift in marketing strategy designed to enhance brand visibility and connect with a new generation of customers through modernized messaging that reflects the real-life goals and aspirations of today’s senior homeowners. We have also continued to enhance our digital capabilities by leveraging automated digital tools to improve efficiency and the overall ease of transacting.
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As described in further detail below under “Organizational Transformation— Integration of AAG/Bloom Assets; Brand Unification ,” we transitioned our sales teams onto one loan origination system, making our origination operations more efficient, and unified under the single brand name “Finance of America,” creating a recognizable identity that clarifies the Company’s offerings in the market.
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For example, in June 2025, we launched a digital pre-qualification tool for certain products that can deliver a three-minute pre-qualification experience, setting a new benchmark for speed and customer engagement in the industry. In the fourth quarter of 2025, we launched “Joy,” our AI-powered customer ambassador chatbot, to provide consumer support over the telephone.
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This brand unification included the launching of new brand assets across the Company’s platforms. Further, in the second quarter of 2024, we modified our go-to-market strategy within our retail channel to focus on our most efficient business lines and stepped away from business lines and campaigns that had been less effective. Additionally, efforts are underway to develop our digital capabilities.
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We are working to expand Joy’s capabilities, including to enable Joy to provide consumer support via the exchange of online instant messages, and have also been working on SMS engagement tools for sales teams.
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Our digital innovation strategy is designed to deliver financial services to seniors in a way that is both modern and user friendly. We are working to build a digital channel that will supplement our existing lines of business and leverage automated digital tools to improve efficiency and the overall ease of transacting.
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We are engaging in strategic partnerships in an effort to expand the reach of our products. In October 2025 we announced a strategic partnership with Better, pursuant to which we will originate traditional home equity loans through Better’s AI platform and serve as Better’s reverse mortgage origination partner, including both HECM loans and non-agency reverse mortgage loans.
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We believe these efforts will increase brand and product recognition and awareness within the addressable market of U.S. seniors and among mortgage brokers, make our marketing efforts and originations processes more efficient and less costly, improve the originations experience for borrowers and mortgage broker partners, expand the number and depth of our relationships with borrowers and mortgage broker partners, and ultimately raise our origination volumes.
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Better will initially leverage traditional platforms to offer these products, however our goal for this collaboration is to allow us to integrate our reverse mortgage products into a unified digital experience.
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Organizational Transformation During the fourth quarter of 2022 and calendar year 2023, the Company entered into a series of transactions, discontinuing certain business lines, while enhancing our reverse mortgage loan business through the acquisition of operational assets from American Advisors Group, now known as Bloom Retirement Holdings Inc. (“AAG/Bloom”).
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Additionally, in November 2025 we announced that FAR and PHH Mortgage Corporation (“PHH”), a subsidiary of Onity Group Inc., entered into an agreement pursuant to which FAR will acquire PHH’s HECM loan servicing portfolio and certain other reverse mortgage assets.
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In 2024, the Company completed the integration of the operational assets acquired from AAG/Bloom and unified its brands under the single brand name “Finance of America.” These efforts, described in further detail below, transformed our business from a vertically integrated lending and complementary services platform to a unified modern retirement solutions platform.
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In connection with the transaction, FAR will also acquire PHH’s pipeline of reverse mortgage loans, bring select members of PHH’s experienced origination team onto FAR’s platform, and enter into a subservicing arrangement with PHH.
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Transactions Relating to Discontinued Business Lines On October 20, 2022, the Board of Directors of the Company authorized a plan to discontinue the operations of the Company’s traditional mortgage lending segment operated by FAH’s subsidiary Finance of America Mortgage LLC (“FAM”), other than its home improvement lending business, which process commenced in the fourth quarter of 2022 and was completed on February 28, 2023.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

293 edited+113 added−52 removed354 unchanged
Biggest changeAs of December 31, 2024, the Company had 425,850 shares of Class A Common Stock issued and unvested and 5,989,639,701 shares of Class A Common Stock authorized but unissued, including 12,016,628 shares of Class A Common Stock issuable upon exchange of Class A LLC Units that are held by FOA Equity unitholders (other than AAG/Bloom and the Company), 1,875,140 shares of Class A Common Stock issuable upon exchange of Class A LLC Units that are held by AAG/Bloom, 714,226 shares of Class A Common Stock issuable upon exchange of Class A LLC Units that are potentially issuable to AAG/Bloom in connection with our acquisition of operational 58 assets from AAG/Bloom, 5,337,928 shares of Class A Common Stock issuable upon exchange of Exchangeable Secured Notes, 720,000 shares of Class A Common Stock issuable upon exchange of Class A LLC Units that are issuable upon exercise of options granted to certain of the Company’s executive officers, 1,298,877 shares of Class A Common Stock issuable upon settlement of outstanding Non-LTIP Restricted Stock Units (“Non-LTIP RSUs”), 899,995 shares of Class A Common Stock issuable upon the occurrence of the First Earnout Achievement Date (or upon exchange of Class A LLC Units that are issuable upon the occurrence of the First Earnout Achievement Date) (72,900 of which would be exchanged to fund the settlement of the Earnout Right Restricted Stock Units (“Earnout Right RSUs”) that vest on the First Earnout Achievement Date), 899,995 shares of Class A Common Stock issuable upon the occurrence of the Second Earnout Achievement Date (or upon exchange of Class A LLC Units that are issuable upon the occurrence of the Second Earnout Achievement Date) (72,900 of which would be exchanged to fund the settlement of the Earnout Right RSUs that vest on the Second Earnout Achievement Date), and 1,437,500 shares of Class A Common Stock issuable upon exercise of certain warrants.
Biggest changeAs of March 11, 2026, the Company had 8,551,931 shares of Class A Common Stock issued and vested, 425,850 shares of Class A Common Stock issued but unvested, and 5,991,022,219 shares of Class A Common Stock authorized but unissued, which authorized but unissued shares include 7,731,821 shares of Class A Common Stock issuable upon exchange of Class A LLC Units that are held by FOA Equity unitholders (other than the Company), 357,113 shares of Class A Common Stock issuable upon exchange of Class A LLC Units that are potentially issuable to AAG/Bloom in connection with our acquisition of operational assets from AAG/Bloom, 5,337,928 shares of Class A Common Stock issuable upon exchange of Exchangeable Secured Notes, 1,428,571 shares of Class A Common Stock issuable upon conversion of the Series A Preferred Stock (based on the conversion price as of March 11, 2026), 2,222,222 shares of Class A Common Stock issuable upon conversion of the Convertible Notes (based on the early conversion price of $18.00 per share applicable prior to the one year anniversary of the issuance date (on which the conversion price increases to $19.00 per share)), 720,000 shares of Class A Common Stock issuable upon exchange of Class A LLC Units that are issuable upon exercise of options granted to certain members of senior management, 770,000 shares of Class A Common Stock directly issuable upon exercise of options granted to certain members of senior management, 1,165,299 shares of Class A Common Stock issuable upon settlement of outstanding Non-LTIP Restricted Stock Units (“Non-LTIP RSUs”), 471,115 shares of Class A Common Stock issuable upon the occurrence of the First Earnout Achievement Date (or upon exchange of Class A LLC Units that are issuable upon the occurrence of the First Earnout Achievement Date) (38,161 of which would be exchanged to fund the settlement of the Earnout Right Restricted Stock Units (“Earnout Right RSUs”) that vest on the First 56 Earnout Achievement Date), 471,115 shares of Class A Common Stock issuable upon the occurrence of the Second Earnout Achievement Date (or upon exchange of Class A LLC Units that are issuable upon the occurrence of the Second Earnout Achievement Date) (38,161 of which would be exchanged to fund the settlement of the Earnout Right RSUs that vest on the Second Earnout Achievement Date), 1,437,500 shares of Class A Common Stock issuable upon exercise of certain warrants, and additional shares of Class A Common Stock issuable upon vesting (which occurs upon the consummation of a Change of Control (as defined in the Finance of America Companies Inc. 2021 Omnibus Incentive Plan)) of 2,000,000 Class B Units of FOA Equity (“Class B Units”) granted to certain of the Company’s executive officers, conversion of such Class B Units into a number of Class A LLC Units having a fair market value equal to the excess (if any) of the fair market value of the Company’s Class A Common Stock as of the vesting date over the closing price of the Company’s Class A Common Stock on the date of grant, and exchange of such resulting Class A LLC Units for shares of Class A Common Stock.
Due to the non-recourse nature of reverse mortgage loans, we may ultimately incur losses on any such loans that we hold to maturity if the decreased value results in the property being sold for less than the loan balance at maturity, though such risk is mitigated in the case of HECM due to our ability to assign HECM to HUD or collect proceeds from FHA loss claims.
Due to the non-recourse nature of reverse mortgage loans, we may ultimately incur losses on any such reverse mortgage loans that we hold to maturity if the decreased value results in the property being sold for less than the loan balance at maturity, though such risk is mitigated in the case of HECM loans due to our ability to assign HECM loans to HUD or collect proceeds from FHA loss claims.
HUD also provided clear guidance regarding both underwriting and servicing of loans involving non-borrower spouses, significantly decreasing the risks of those situations. Borrower counseling by a HUD-approved counseling agency is required on HECM.
HUD also provided clear guidance regarding both underwriting and servicing of loans involving non-borrower spouses, significantly decreasing the risks of those situations. Borrower counseling by a HUD-approved counseling agency is required on HECM loans.
In the case of a HECM, we may also incur losses when a loan matures prior to the completion of repairs following a natural disaster, because we are required to reduce our claim to the FHA by the unrepaired damage amount.
In the case of a HECM loan, we may also incur losses when a loan matures prior to the completion of repairs following a natural disaster, because we are required to reduce our claim to the FHA by the unrepaired damage amount.
In addition, natural catastrophic events often lead to increased delinquencies and increased servicing advances, which create additional risk for us. Natural catastrophic events may also result in longer timelines to liquidate loans at maturity or to assign HECM to HUD.
In addition, natural catastrophic events often lead to increased delinquencies and increased servicing advances, which create additional risk for us. Natural catastrophic events may also result in longer timelines to liquidate loans at maturity or to assign HECM loans to HUD.
FAR originates and acquires non-agency reverse mortgage loans as well as HECM in accordance with the FHA’s HECM program. HECM are insured by the FHA. As an approved non-supervised FHA mortgagee and an approved Ginnie Mae issuer, FAR pools interests in HECM (also known as participations) into HMBS.
FAR originates and acquires non-agency reverse mortgage loans as well as HECM loans in accordance with the FHA’s HECM program. HECM loans are insured by the FHA. As an approved non-supervised FHA mortgagee and an approved Ginnie Mae issuer, FAR pools interests in HECM loans (also known as participations) into HMBS.
However, there can be no assurance such hedges would adequately protect us from the aforementioned interest rate and fair value risks, or that a hedging strategy utilized by us would be well-designed or properly executed to adequately address such risks.
However, there can be no assurance that such hedges would adequately protect us from the aforementioned interest rate and fair value risks, or that such a hedging strategy utilized by us would be well-designed or properly executed to adequately address such risks.
FAR has contracted with Compu-Link Corporation (d/b/a Celink), a Michigan corporation (“Celink”), as a Subservicer to perform reverse mortgage servicing functions on our behalf, and with ServiceMac, LLC, a Delaware limited liability company (“ServiceMac”), as a Subservicer of non-agency hybrid mortgage loans originated prior to the discontinuation of the non-agency hybrid mortgage loan product.
FAR has contracted with Compu-Link Corporation (d/b/a Celink), a Michigan corporation (“Celink”), as Subservicer to perform reverse mortgage servicing functions on our behalf, and with ServiceMac, LLC, a Delaware limited liability company (“ServiceMac”), as a Subservicer of non-agency hybrid mortgage loans originated prior to the discontinuation of the non-agency hybrid mortgage loan product.
Unless more subservicers enter this space, the quality of subservicing practices may deteriorate, and we could have limited options in the event of Subservicer failure. The failure of a Subservicer to effectively service our HECM, non-agency reverse mortgage loans, and/or discontinued non-agency hybrid mortgage loans could have a material and adverse effect on our business and our financial condition.
Unless more subservicers enter this space, the quality of subservicing practices may deteriorate, and we could have limited options in the event of Subservicer failure. The failure of a Subservicer to effectively service our HECM loans, non-agency reverse mortgage loans, and/or discontinued non-agency hybrid mortgage loans could have a material and adverse effect on our business and our financial condition.
A substantial portion of the mortgage loans we service are serviced on behalf of Ginnie Mae. With respect to HECM securitized into HMBS, Ginnie Mae requirements prescribe the related base service fee to compensate us for servicing loans as well as the assessment of fines and penalties that may be imposed upon us for failing to meet servicing standards.
A substantial portion of the mortgage loans we service are serviced on behalf of Ginnie Mae. With respect to HECM loans securitized into HMBS, Ginnie Mae requirements prescribe the related base service fee to compensate us for servicing loans as well as the assessment of fines and penalties that may be imposed upon us for failing to meet servicing standards.
Upon the occurrence and during the continuance of an event of default, the holders of our indebtedness could elect to declare all the funds borrowed to be due and payable.
Upon the occurrence and during the continuance of an event of default, the holders of our indebtedness could elect to declare all the funds borrowed to be due and payable.
Factors affecting the trading price of our securities may include, but are not limited to, the following: • actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; • changes in the market’s expectations about our operating results; • sustained increases in market interest rates that may lead purchasers of our shares to demand higher yield; • success of competitors; • our operating results failing to meet the expectation of securities analysts or investors in a particular period; • changes in financial estimates and recommendations by securities analysts concerning the Company or the reverse mortgage industry or mortgage industry in general; • a ratings action by a rating agency with respect to our Company; • operating and share price performance of other companies that investors deem comparable to us; • our ability to market new and enhanced products on a timely basis; • changes in laws and regulations affecting our business; • our ability to meet compliance requirements; 53 • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of Class A Common Stock available for public sale; • any major change in our Board or management; • sales of substantial amounts of Class A Common Stock by our directors, executive officers, or significant shareholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, interest rate changes, continued inflation, and acts of war or terrorism.
Factors affecting the trading price of our securities may include, but are not limited to, the following: • actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; 53 • changes in the market’s expectations about our operating results; • sustained increases in market interest rates that may lead purchasers of our shares to demand higher yield; • success of competitors; • our operating results failing to meet the expectation of securities analysts or investors in a particular period; • changes in financial estimates and recommendations by securities analysts concerning the Company or the reverse mortgage industry or mortgage industry in general; • a ratings action by a rating agency with respect to our Company; • operating and share price performance of other companies that investors deem comparable to us; • our ability to market new and enhanced products on a timely basis; • changes in laws and regulations affecting our business; • our ability to meet compliance requirements; • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of Class A Common Stock available for public sale; • any major change in our Board or management; • sales of substantial amounts of Class A Common Stock by our directors, executive officers, or significant shareholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, interest rate changes, continued inflation, and acts of war or terrorism.
The risks associated with acquisitions include, among others: • failing to identify or adequately assess the magnitude of certain liabilities, shortcomings, or other circumstances prior to acquiring or investing in a company, including potential exposure to regulatory sanctions or liabilities resulting from an acquisition target’s previous activities, internal controls, and information security environment; • significant costs and expenses, including those related to retention payments, equity compensation, severance pay, intangible asset amortization and asset impairment charges, assumed litigation, and other liabilities, and legal, accounting, and financial advisory fees; • unanticipated issues in integrating information, management style, controls and procedures, servicing practices, communications, and other systems including information technology systems; • unanticipated incompatibility of purchasing, logistics, marketing, and administration methods; • failing to retain key employees or clients; • inaccuracy of valuation and/or operating assumptions supporting our purchase price; and • representation and warranty liability relating to a target’s previous lending activities.
The risks associated with acquisitions include, among others: • failing to identify or adequately assess the magnitude of certain liabilities, shortcomings, or other circumstances prior to acquiring or investing in a company, including potential exposure to regulatory sanctions or liabilities resulting from an acquisition target’s previous activities, internal controls, and information security environment; • significant costs and expenses, including those related to retention payments, equity compensation, severance pay, intangible asset amortization and asset impairment charges, assumed litigation, and other liabilities, and legal, accounting, and financial advisory fees; • unanticipated issues in integrating information, management style, controls and procedures, servicing practices, communications, and other systems including information technology systems; • unanticipated incompatibility of purchasing, logistics, marketing, and administration methods; • failing to retain key employees or clients; 21 • inaccuracy of valuation and/or operating assumptions supporting our purchase price; and • representation and warranty liability relating to a target’s previous lending activities.
To the extent that an examination or other regulatory engagement reveals a failure by us to comply with applicable law, regulations, or licensing requirements, this could lead to (i) loss of our licenses and approvals to engage in our business, (ii) damage to our reputation in the industry and loss of client relationships, (iii) governmental investigations and enforcement actions resulting in administrative fines and penalties, (iv) litigation, (v) civil and criminal liability, including class action lawsuits, and actions to recover incentive and other payments made by 44 governmental entities, (vi) enhanced compliance requirements, (vii) breaches of covenants and representations under our servicing, debt, or other agreements, (viii) inability to raise capital, and (ix) inability to execute on our business strategy.
To the extent that an examination or other regulatory engagement reveals a failure by us to comply with applicable law, regulations, or licensing requirements, this could lead to (i) loss of our licenses and approvals to engage in our business, (ii) damage to our reputation in the industry and loss of client relationships, (iii) governmental investigations and enforcement actions resulting in administrative fines and penalties, (iv) litigation, (v) civil and criminal liability, including class action lawsuits, and actions to recover incentive and other payments made by governmental entities, (vi) enhanced compliance requirements, (vii) breaches of covenants and representations under our servicing, debt, or other agreements, (viii) inability to raise capital, and (ix) inability to execute on our business strategy.
If there is a major earthquake, fire, mudslide or other natural disaster, we face the risk that many of our borrowers may experience uninsured property losses and other adverse economic consequences, which could in turn have a material and adverse impact on our business, as further described under “—Our business is subject to the risks of earthquakes, fires, floods, and other natural catastrophic events, which may increase in frequency or severity as a result of global climate change, and to interruption by man-made issues such as strikes, wars, and civil unrest.” Our capital investments in technology may not achieve anticipated returns.
If there is a major earthquake, fire, mudslide, or other natural disaster, we face the risk that many of our borrowers may experience uninsured property losses and other adverse economic consequences, which could in turn have a material and adverse impact on our business, as further described under “—Our business is subject to the risks of earthquakes, fires, floods, and other natural catastrophic events, which may increase in frequency or severity as a result of global climate change, and to interruption by man-made issues such as strikes, wars, and civil unrest.” 18 Our capital investments in technology may not achieve anticipated returns.
We must comply with a large number of federal, state, and local consumer protection laws including, among others, TILA, as amended, together with its implementing regulations (Regulation Z), the FDCPA, RESPA, as amended, together with its implementing regulations (Regulation X), ECOA, as amended, together with its implementing regulations (Regulation B), FCRA, as amended, together with its implementing regulations (Regulation V), the Fair Housing Act, the Telephone Consumer Protection Act, as amended, GLBA, together with its implementing regulations (Regulation P), the Mortgage Advertising Practices Rules (Regulation N), the Electronic Funds Transfer Act, as amended, together with its implementing regulations (Regulation E), the Servicemembers’ Civil Relief Act, as amended, HMDA, together with its implementing regulations (Regulation C), the Secure and Fair Enforcement for Mortgage Licensing Act, as amended, the Federal Trade Commission Act, the Dodd-Frank Act, as amended, together with its implementing regulations, U.S. federal and state laws prohibiting unfair, deceptive, or abusive acts or practices, and state foreclosure laws.
We must comply with a large number of federal, state, and local consumer protection laws including, among others, TILA, as amended, together with its implementing regulations (Regulation Z), the FDCPA, RESPA, as amended, together with its implementing regulations (Regulation X), ECOA, as amended, together with its implementing regulations (Regulation B), FCRA, as amended, together with its implementing regulations (Regulation V), the Fair Housing Act, the Telephone Consumer Protection Act, as amended, GLBA, together with 38 its implementing regulations (Regulation P), the Mortgage Advertising Practices Rules (Regulation N), the Electronic Funds Transfer Act, as amended, together with its implementing regulations (Regulation E), the Servicemembers’ Civil Relief Act, as amended, HMDA, together with its implementing regulations (Regulation C), the Secure and Fair Enforcement for Mortgage Licensing Act, as amended, the Federal Trade Commission Act, the Dodd-Frank Act, as amended, together with its implementing regulations, U.S. federal and state laws prohibiting unfair, deceptive, or abusive acts or practices, and state foreclosure laws.
Further, if the NYSE delists the Company’s Class A Common Stock from trading on its exchange for failure to meet the listing standards, the Company and its shareholders could face significant material adverse consequences including: • a limited availability of market quotations for our securities; • reduced liquidity for our securities; • a determination that shares of the Class A Common Stock are a “penny stock” which will require brokers trading in the Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; • a limited amount of news and analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
Further, if the NYSE and/or NYSE Texas delists the Company’s Class A Common Stock from trading on its exchange for failure to meet the listing standards, the Company and its shareholders could face significant material adverse consequences including: • a limited availability of market quotations for our securities; • reduced liquidity for our securities; • a determination that shares of the Class A Common Stock are a “penny stock” which will require brokers trading in the Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; • a limited amount of news and analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
See “—Our geographic concentration could materially and adversely affect us if the economic conditions in our current markets should decline or if our current markets are impacted by natural disasters.” Mortgaged properties securing the loans that we originate are required to be covered by hazard insurance customary to the area in which the property is located, however, there could be circumstances where insurance premiums have not been timely paid or the insurance coverage otherwise fails or is insufficient (for example, the National Flood Insurance Program has a cap of $250,000).
See “—Our geographic concentration could materially and adversely affect us if the economic conditions in our current markets should decline or if our current markets are impacted by natural 25 disasters.” Mortgaged properties securing the loans that we originate are required to be covered by hazard insurance customary to the area in which the property is located, however, there could be circumstances where insurance premiums have not been timely paid or the insurance coverage otherwise fails or is insufficient (for example, the National Flood Insurance Program has a cap of $250,000).
If we or one of our subsidiaries fell within the definition of an investment company under the Investment Company Act and failed to qualify for an exclusion or exemption, including, for example, if it was required to and failed to meet the 55% Requirement or the 25% Requirement, it could, among other things, be required either (i) to change the manner in which it conducts operations to avoid being required to register as an investment company or (ii) to register as an investment company, either of which could adversely affect us by, among other things, requiring us to dispose of certain assets or to change the structure of our business in ways that we may not believe to be in our best interests.
If we or one of our subsidiaries fell within the definition of an investment company under the Investment Company Act and failed to qualify for an exclusion or exemption, including, for example, if it was required to and 43 failed to meet the 55% Requirement or the 25% Requirement, it could, among other things, be required either (i) to change the manner in which it conducts operations to avoid being required to register as an investment company or (ii) to register as an investment company, either of which could adversely affect us by, among other things, requiring us to dispose of certain assets or to change the structure of our business in ways that we may not believe to be in our best interests.
Among other things, these provisions: • provide that subject to the rights of the holders of any preferred stock and the rights granted pursuant to the Stockholders Agreement, vacancies and newly created directorships may be filled only by the remaining directors at any time the principal stockholders beneficially own less than 30% of the total voting power of all then outstanding shares of the Company’s capital stock entitled to vote generally in the election of directors; • allow the Company to authorize the issuance of shares of one or more series of preferred stock, including in connection with a stockholder rights plan, financing transactions, or otherwise, the terms of which series may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock; • prohibit stockholder action by written consent from and after the date on which the principal stockholders beneficially own at least 30% of the total voting power of all then outstanding shares of the Company’s 57 capital stock entitled to vote generally in the election of directors unless such action is recommended by all directors then in office; • provide for certain limitations on convening special stockholder meetings; and • establish advance notice requirements for nominations for elections to our Board or for proposing matters that can be acted upon by stockholders at stockholder meetings.
Among other things, these provisions: • provide that subject to the rights of the holders of any preferred stock and the rights granted pursuant to the Stockholders Agreement, vacancies and newly created directorships may be filled only by the remaining directors at any time the principal stockholders beneficially own less than 30% of the total voting power of all then outstanding shares of the Company’s capital stock entitled to vote generally in the election of directors; 60 • allow the Company to authorize the issuance of shares of one or more series of preferred stock, including in connection with a stockholder rights plan, financing transactions, or otherwise, the terms of which series may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock; • prohibit stockholder action by written consent from and after the date on which the principal stockholders beneficially own at least 30% of the total voting power of all then outstanding shares of the Company’s capital stock entitled to vote generally in the election of directors unless such action is recommended by all directors then in office; • provide for certain limitations on convening special stockholder meetings; and • establish advance notice requirements for nominations for elections to our Board or for proposing matters that can be acted upon by stockholders at stockholder meetings.
If our marketing and disclosure documentation is alleged or found to contain material inaccuracies or omissions, we may be liable under federal and state securities laws (or under other 32 laws) for damages to third parties that invest in these securitization transactions, including in circumstances where we relied on a third-party in preparing accurate disclosures, or we may incur other expenses and costs in connection with disputing these allegations or settling claims.
If our marketing and disclosure documentation is alleged or found to contain material inaccuracies or omissions, we may be liable under federal and state securities laws (or under other laws) for damages to third parties that invest in these securitization transactions, including in circumstances where we relied on a third-party in preparing accurate disclosures, or we may incur other expenses and costs in connection with disputing these allegations or settling claims.
Moreover, the proliferation of social media websites as well as the personal use of social media by our employees and others, including personal blogs and social network profiles, also may increase the risk that negative, inappropriate, or unauthorized information may be posted or released publicly that could harm our reputation or 24 have other negative consequences, including as a result of our employees interacting with our customers in an unauthorized manner in various social media outlets.
Moreover, the proliferation of social media websites as well as the personal use of social media by our employees and others, including personal blogs and social network profiles, also may increase the risk that negative, inappropriate, or unauthorized information may be posted or released publicly that could harm our reputation or have other negative consequences, including as a result of our employees interacting with our customers in an unauthorized manner in various social media outlets.
See “—Our failure to comply with the requirements of our outstanding indebtedness could result in an event of default that could materially and adversely affect our financial condition and ultimately force us into liquidation or bankruptcy.” The agreements that govern our warehouse facilities and lines of credit typically contain covenants relating to our financial condition and we may experience difficulties in complying with such financial covenants.
See “—Our failure to comply with the requirements of our outstanding indebtedness could result in 49 an event of default that could materially and adversely affect our financial condition and ultimately force us into liquidation or bankruptcy.” The agreements that govern our warehouse facilities and lines of credit typically contain covenants relating to our financial condition and we may experience difficulties in complying with such financial covenants.
Even unproven allegations that our activities have not complied or do not comply with all applicable laws and regulations may have a material adverse effect on our business, financial condition, and results of operations. See “—We are subject to legal proceedings, federal or state governmental examinations, and enforcement investigations from time to time.
Even unproven allegations that our activities have not complied or do not comply with all applicable laws and 40 regulations may have a material adverse effect on our business, financial condition, and results of operations. See “—We are subject to legal proceedings, federal or state governmental examinations, and enforcement investigations from time to time.
While our Company handles these legal claims in the ordinary course, the volume of claims and the amount of associated expenses, costs, damages, penalties, and fines that we could incur in connection with these claims could have an adverse effect on our financial condition and results of our operations and could cause reputational harm to us or otherwise result in management distraction.
While our Company handles legal proceedings in the ordinary course, the volume of claims and the amount of associated expenses, costs, damages, penalties, and fines that we could incur in connection with these claims could have an adverse effect on our financial condition and results of our operations and could cause reputational harm to us or otherwise result in management distraction.
We cannot assure you that we will be able to attract and retain key personnel or members of our executive management team, which may impede our ability to implement our current strategy or take advantage of strategic acquisitions or other growth opportunities that may be presented to us, which could materially affect our business, financial condition, and results of operations.
We cannot assure you that we will be able to attract and retain key personnel or members of our executive management team, which may 20 impede our ability to implement our current strategy or take advantage of strategic acquisitions or other growth opportunities that may be presented to us, which could materially affect our business, financial condition, and results of operations.
There can be no guarantee that HUD/the FHA will retain Congressional authorization to continue the HECM program, which provides FHA government insurance for qualifying HECM, that any or all of these entities will continue to participate in the reverse mortgage industry, or that they will not make material changes to the laws, regulations, rules, or practices applicable to reverse mortgage programs.
There can be no guarantee that HUD/the FHA will retain Congressional authorization to continue the HECM program, which provides FHA government insurance for qualifying HECM loans, that any or all of these entities will continue to participate in the reverse mortgage industry, or that they will not make material changes to the laws, regulations, rules, or practices applicable to reverse mortgage programs.
Among other things, the CCPA requires covered companies to provide new disclosures to 39 California residents, including consumers, employees, and contractors, provide such individuals new data protection and privacy rights, including the ability to opt-out of the sale of personal information or the sharing of personal information for cross-context behavioral advertising, and create additional requirements to limit the retention of personal information.
Among other things, the CCPA requires covered companies to provide new disclosures to California residents, including consumers, employees, and contractors, provide such individuals new data protection and privacy rights, including the ability to opt-out of the sale of personal information or the sharing of personal information for cross-context behavioral advertising, and create additional requirements to limit the retention of personal information.
These licensing and other requirements may impact our ability to operate our business and impose compliance costs that may adversely affect our financial performance. We believe that we and our Subservicers maintain all material licenses and permits required for our current operations and are in substantial compliance with all applicable federal, state, and local laws, rules, regulations, and ordinances.
These licensing and other requirements may impact our ability to operate our business and impose compliance costs that may adversely affect our financial performance. 42 We believe that we and our Subservicers maintain all material licenses and permits required for our current operations and are in substantial compliance with all applicable federal, state, and local laws, rules, regulations, and ordinances.
The number of legal proceedings we are involved in may increase in the future, including certified class or mass actions. Further, because we originate and service a significant number of HECM insured by the FHA, there is the possibility that we could be subject to litigation brought by HUD pursuant to the False Claims Act.
Further, because we originate and service a significant number of HECM loans insured by the FHA, there is the possibility that we could be subject to litigation brought by HUD pursuant to the False Claims Act. The number of legal proceedings we are involved in may increase in the future, including certified class or mass actions.
Similarly, the A&R LLC Agreement permits FOA Equity to issue an unlimited number of additional limited liability company interests of FOA Equity with designations, preferences, rights, powers, and duties that are different from, and may be senior to, those applicable to the Class A LLC Units, and which may be exchangeable for shares of Class A Common Stock.
Similarly, the Second A&R LLC Agreement permits FOA Equity to issue an unlimited number of additional limited liability company interests of FOA Equity with designations, preferences, rights, powers, and duties that are different from, and may be senior to, those applicable to the Class A LLC Units, and which may be exchangeable for shares of Class A Common Stock.
Furthermore, our employees operate under a hybrid workforce model and such model may be more vulnerable to security breaches. 22 We rely on encryption and other information security technologies licensed from third parties to provide security controls necessary to help in securing online transmission of confidential information pertaining to customers, employees, and other aspects of our business.
Furthermore, our employees operate under a hybrid workforce model and such model may be more vulnerable to security breaches. We rely on encryption and other information security technologies licensed from third parties to provide security controls necessary to help in securing online transmission of confidential information pertaining to customers, employees, and other aspects of our business.
Unfavorable rulings could result in adverse impacts on our business, financial condition, or results of operations. 41 Conducting our business in a manner so that we are exempt from registration under, and in compliance with, the Investment Company Act, may reduce our flexibility and could limit our ability to pursue certain opportunities.
Unfavorable rulings could result in adverse impacts on our business, financial condition, or results of operations. Conducting our business in a manner so that we are exempt from registration under, and in compliance with, the Investment Company Act, may reduce our flexibility and could limit our ability to pursue certain opportunities.
Any failure by FAR to maintain the Ginnie Mae equity capital waiver or any loss of FAR’s status as an approved non-supervised FHA mortgagee or an approved Ginnie Mae issuer, could have a material adverse effect on our overall business and our financial position, results of operations, and cash flows.
Any failure by FAR to maintain the Ginnie Mae equity capital waiver or any loss of FAR’s status as an approved non-supervised FHA 28 mortgagee or an approved Ginnie Mae issuer, could have a material adverse effect on our overall business and our financial position, results of operations, and cash flows.
In accordance with Accounting Standards Codification (“ASC”) 350, Intangibles-Goodwill and Other, to the extent goodwill and intangible assets are recorded on the statement of financial condition, the Company is required to test goodwill and any other intangible assets with an indefinite life for possible impairment on an annual basis and on an interim basis if there are indicators of a possible impairment.
In accordance with Accounting Standards Codification 350, Intangibles-Goodwill and Other, to the extent goodwill and intangible assets are recorded on the statement of financial condition, the Company is required to test goodwill and any other intangible assets with an indefinite life for possible impairment on an annual basis and on an interim basis if there are indicators of a possible impairment.
The election of a new U.S. president for a term that commenced in 2025, coupled with a consolidation of party control of both chambers of Congress, has led to new legislative and regulatory initiatives and the roll-back of certain initiatives of the previous presidential administration, which may impact our business in unpredictable ways.
The election of a new U.S. president for a term that commenced in 2025, coupled with a consolidation of party control of both chambers of Congress, led to new legislative and regulatory initiatives and the roll-back of certain initiatives of the previous presidential administration, which may impact our business in unpredictable ways.
Compliance with public company requirements is costly and time-consuming. For example, the Company has adopted corporate governance requirements and best practices as well as internal controls and disclosure controls and procedures, all of which have expenses associated with them. In addition, expenses associated with SEC reporting requirements are incurred in the ordinary course of business.
Compliance with public company requirements is costly and time-consuming. For example, the Company has adopted corporate governance requirements and best practices as 58 well as internal controls and disclosure controls and procedures, all of which have expenses associated with them. In addition, expenses associated with SEC reporting requirements are incurred in the ordinary course of business.
We must comply with state licensing requirements and varying compliance requirements in all 50 states and the District of Columbia, and we are sensitive to regulatory changes that may increase our costs through stricter licensing laws, disclosure laws, or increased fees or that may impose conditions to licensing that we or our personnel are unable to meet.
Accordingly, we must comply with state licensing requirements and varying compliance requirements in all 50 states and the District of Columbia, and we are sensitive to regulatory changes that may increase our costs through stricter licensing laws, disclosure laws, or increased fees or that may impose conditions to licensing that we or our personnel are unable to meet.
The first lien mortgage loan lender and servicer are responsible for monitoring to ensure the borrower is meeting their obligations under the first lien mortgage loan, including making required tax, insurance, and/or property charge payments and repairs that are also required to be made pursuant to the terms of our second lien mortgage loan.
The first lien mortgage loan lender and servicer are responsible for monitoring to ensure the borrower is 36 meeting their obligations under the first lien mortgage loan, including making required tax, insurance, and/or property charge payments and repairs that are also required to be made pursuant to the terms of our second lien mortgage loan.
When a lender seeks to rely on this exception, it must be prepared to demonstrate that the services or facilities for which compensation is paid are separate and distinct from any referral and the amount paid is reasonable. If the 37 amount paid exceeds the reasonable value, the excess could be attributable to the referral.
When a lender seeks to rely on this exception, it must be prepared to demonstrate that the services or facilities for which compensation is paid are separate and distinct from any referral and the amount paid is reasonable. If the amount paid exceeds the reasonable value, the excess could be attributable to the referral.
The private right of action may increase the likelihood of, and risks associated with, data breach litigation. In addition, laws in all 50 U.S. states and territories require businesses to provide notice to consumers whose personal information has been disclosed as a result of a data breach.
The private right of action may increase the likelihood of, and risks associated with, data breach litigation. In 41 addition, laws in all 50 U.S. states and territories require businesses to provide notice to consumers whose personal information has been disclosed as a result of a data breach.
Additionally, along with others in our industry, we are subject to (and many continue to receive in the future) repurchase and indemnification claims regarding, among other things, alleged breaches of representations and warranties relating to the sale of mortgage loans, the placement of mortgage loans into securitization trusts, or the servicing of securitized mortgage loans.
Additionally, along with others in our industry, we are subject to (and many continue to receive in the future) repurchase and indemnification claims regarding, among other things, alleged breaches of representations and warranties relating to the sale of mortgage loans, the placement of mortgage loans into securitization trusts, or the servicing of mortgage loans.
The AAG/Bloom Registration Statement was declared effective by the SEC on September 1, 2023. Additionally, on October 31, 2024, FOAF issued $146,793,000 of 10.000% Exchangeable Senior Secured Notes due 2029 (the “Exchangeable Secured Notes”). The Exchangeable Secured Notes are exchangeable into shares of Class A Common Stock.
The AAG/Bloom Registration Statement was declared effective by the SEC on September 1, 2023. On October 31, 2024, FOAF issued $146,793,000 of 10.000% Exchangeable Senior Secured Notes due 2029 (the “Exchangeable Secured Notes”). The Exchangeable Secured Notes are exchangeable into shares of Class A Common Stock.
Negative perceptions or publicity regarding these matters—even if related to seemingly isolated incidents, or even if related to practices not specific to the origination or servicing of loans, such as debt collection—could erode trust and confidence and damage our reputation among existing and potential clients.
Negative perceptions or publicity regarding these matters—even if related to seemingly isolated incidents, or even if related to practices not specific to the origination or servicing of loans, such as debt collection—could erode trust and 24 confidence and damage our reputation among existing and potential clients.
Each subsidiary is a distinct legal entity and under certain circumstances may not be able to, or may not be permitted due to legal or contractual restrictions to, make distributions or repay 46 intercompany loans to enable the applicable entity in our corporate structure to make payments in respect of its indebtedness.
Each subsidiary is a distinct legal entity and under certain circumstances may not be able to, or may not be permitted due to legal or contractual restrictions to, make distributions or repay intercompany loans to enable the applicable entity in our corporate structure to make payments in respect of its indebtedness.
A public trading market having the desired characteristics of depth, liquidity, and orderliness depends upon the presence in the marketplace of willing buyers and sellers of our securities at any given time, which 54 presence is dependent upon the individual decisions of investors, over which we have no control.
A public trading market having the desired characteristics of depth, liquidity, and orderliness depends upon the presence in the marketplace of willing buyers and sellers of our securities at any given time, which presence is dependent upon the individual decisions of investors, over which we have no control.
The A&R Charter authorizes the Company to issue these shares of Class A Common Stock and options, rights, warrants, and appreciation rights relating to Class A Common Stock for the consideration and on the terms and conditions established by the Board in its sole discretion, whether in connection with acquisitions or otherwise.
The A&R Charter authorizes the Company to issue these shares of Class A Common Stock and options, rights, warrants, preferred stock, and appreciation rights relating to Class A Common Stock for the consideration and on the terms and conditions established by the Board in its sole discretion, whether in connection with acquisitions or otherwise.
Because absent an event of default, reverse mortgage loans only become due and payable upon the death of the borrower, and the estate or heirs may not be engaged in the post-termination resolution of the reverse mortgage, reverse mortgages end with foreclosure more often than traditional mortgages.
Because absent an event of default, reverse mortgage loans only become due and payable upon the 23 death of the borrower, and the estate or heirs may not be engaged in the post-termination resolution of the reverse mortgage, reverse mortgages end with foreclosure more often than traditional mortgages.
In turn, this could decrease the demand for our products, increase regulatory scrutiny, and detrimentally effect our business, financial condition, and results of operations. Climate change, climate change-related regulation, and focus on environmental, social, and governance (“ESG”) issues may adversely affect our business and financial results and damage our reputation.
In turn, this could decrease the demand for our products, increase regulatory scrutiny, and detrimentally affect our business, financial condition, and results of operations. Climate change, climate change-related regulation, and focus on environmental, social, and governance (“ESG”) issues may adversely affect our business and financial results and damage our reputation.
See “—Our failure to comply with the requirements of our outstanding indebtedness could result in an event of default that could materially and adversely affect our financial condition and ultimately force us into liquidation or bankruptcy.” We are required to repay certain debt facilities in whole or in part in 2025 and such payments will require access to capital, which may not be available from cash flows resulting from our subsidiaries’ operations or from third-party sources on favorable terms, or at all, at the time of repayment, especially in light of current market conditions, which could adversely affect our financial position.
See “—Our failure to comply with the requirements of our outstanding indebtedness could result in an event of default that could materially and adversely affect our financial condition and ultimately force us into liquidation or bankruptcy.” We are required to repay certain debt facilities in whole or in part in 2026 and such payments will require access to capital, which may not be available from cash flows resulting from our subsidiaries’ operations or from third-party sources on favorable terms, or at all, at the time of repayment, especially in light of current market conditions, which could adversely affect our financial position.
However, no assurance can be given as whether the Company will be successful in its servicing strategy and minimizing losses in respect of loans impacted by natural disasters. Further, certain natural disasters are not covered by standard hazard insurance, such as earthquakes.
However, no assurance can be given as to whether the Company will be successful in its servicing strategy and minimizing losses in respect of loans impacted by natural disasters. Further, certain natural disasters are not covered by standard hazard insurance, such as earthquakes.
Allegations may relate to past conduct and/or past business operations, such as the prior 38 activity of acquired entities, and certain legislative actions and judicial decisions can give rise to the initiation of lawsuits against us for activities we conducted in the past.
Allegations may relate to past conduct and/or past business operations, such as the prior activity of acquired entities, and certain legislative actions and judicial decisions can give rise to the initiation of lawsuits against us for activities we conducted in the past.
However, when a large scale disaster occurs, the demand for inspectors, appraisers, contractors, and building supplies may exceed availability, insurers and mortgage servicers may be overwhelmed with inquiries, mail service and other communications channels may be disrupted, borrowers may suffer loss of employment and unexpected expenses which cause them to default on payments and/or renders them unable to pay deductibles required under the insurance policies, and widespread casualties may also affect the ability of borrowers or others who are needed to effect the process of repair or reconstruction or to execute documents.
However, when a large scale disaster occurs, the demand for inspectors, appraisers, contractors, and building supplies may exceed availability, insurers and mortgage servicers may be overwhelmed with inquiries, mail service and other communications channels may be disrupted, borrowers may suffer loss of employment and unexpected expenses which cause them to default on payments and/or render them unable to pay deductibles required under the insurance policies, and widespread casualties may also affect the ability of borrowers or others who are needed to effect the process of repair or reconstruction or to execute documents.
If the HMBS 2.0 program is not enacted or is delayed or if the final terms of the HMBS 2.0 program do not provide the anticipated financial relief, it may adversely affect the reverse mortgage market as well as the Company and its future strategies and results of operations.
If the HMBS 2.0 program is not enacted or if the final terms of the HMBS 2.0 program do not provide the anticipated financial relief, it may adversely affect the reverse mortgage market as well as the Company and its future strategies and results of operations.
The Company’s ability to expand its customer base and to acquire and originate reverse mortgage loans efficiently also depends in part upon its ability to communicate its product offerings to the U.S. senior population and mortgage broker partners and its ability to engage and transact with interested customers and mortgage broker partners.
The Company’s ability to expand its customer base and to acquire and originate loans efficiently also depends in part upon its ability to communicate its product offerings to the U.S. senior population and mortgage broker partners and its ability to engage and transact with interested customers and mortgage broker partners.
The Company will also be required to evaluate amortizable intangible assets and fixed assets for impairment if there are indicators of a possible impairment. There is significant judgment required in the analysis of a potential impairment of indefinite and definite-lived assets.
The Company will also be required to evaluate amortizable intangible assets and fixed assets for impairment if there are indicators of a possible impairment. There 26 is significant judgment required in the analysis of a potential impairment of indefinite and definite-lived assets.
With respect to our non-agency second lien reverse mortgage loan product, our lien is second in priority behind the first lien of a traditional forward mortgage loan or home equity line of credit collateralized by the same mortgaged property.
With respect to our non-agency second lien reverse mortgage loan product, our lien is second in priority behind the first lien of a traditional mortgage loan or home equity line of credit collateralized by the same mortgaged property.
Due to the non-recourse nature of reverse mortgage loans, we may ultimately incur losses on the loan if the damage results in the property being sold for less than the loan balance at loan maturity.
Due to the non-recourse nature of reverse mortgage loans, we may ultimately incur losses on a reverse mortgage loan if damage results in the property being sold for less than the loan balance at loan maturity.
The Ginnie Mae HMBS guide imposes a mandatory repurchase requirement on a HECM issuer to repurchase a pooled HECM when such HECM reaches 98% of its maximum claim amount (which is the maximum FHA insurance amount available for a HECM).
The Ginnie Mae HMBS guide imposes a mandatory repurchase requirement on a HECM loan issuer to repurchase a pooled HECM loan when such HECM loan reaches 98% of its maximum claim amount (which is the maximum FHA insurance amount available for a HECM loan).
Most state 40 licensing laws require that before a “change of control” can occur, including in connection with a merger, acquisition, or initial public offering, applicable state banking departments must approve the change.
Most state licensing laws require that before a “change of control” can occur, including in connection with a merger, acquisition, or initial public offering, applicable state banking departments must approve the change.
There cannot be any assurance that the ultimate resolution of our litigation and regulatory matters will not involve losses, which may be material, in excess of our recorded accruals or estimates of reasonably probable losses.
There cannot be any 46 assurance that the ultimate resolution of our litigation and regulatory matters will not involve losses, which may be material, in excess of our recorded accruals or estimates of reasonably probable losses.
In the CFPB’s Fall 2022 Supervisory Highlights, the CFPB indicated that its supervisory division had created a Repeat Offender Unit to increase its focus on repeat offenders who violate agency or court orders.
Further, in the CFPB’s Fall 2022 Supervisory Highlights, the CFPB indicated that its supervisory division had created a Repeat Offender Unit to increase its focus on repeat offenders who violate agency or court orders.
Further, 27 defaults may ultimately result in losses, particularly if property values are depressed and it becomes difficult to recover the outstanding loan balance via foreclosure and sale of the mortgaged property.
Further, defaults may ultimately result in losses, particularly if property values are depressed and it becomes difficult to recover the outstanding loan balance via foreclosure and sale of the mortgaged property.
We are also subject to the regulatory, supervisory, and examination authority of the CFPB, which has oversight of federal and state non-depository lending and servicing institutions, including reverse mortgage loan originators and loan servicers.
We are also subject to the regulatory, supervisory, and examination authority of the CFPB, which has oversight of federal and state non-depository lending and servicing institutions, including mortgage loan originators and mortgage loan servicers.
Further, even if a subsidiary does generate cash flow, our ability to use such cash to service our indebtedness depends on their ability to make such cash available to the applicable entity required to make an applicable debt service payment.
Further, even if a subsidiary does generate cash flow, our ability to use such cash to service our indebtedness depends on their ability to make such cash available to the applicable entity required to make an 47 applicable debt service payment.
Additionally, if we failed to comply with these restrictions, an event of default could occur and the holders of our indebtedness could elect to declare all the funds borrowed to be 48 due and payable.
Additionally, if we failed to comply with these restrictions, an event of default could occur and the holders of our indebtedness could elect to declare all the funds borrowed to be due and payable.
The amount due and payable in those circumstances is determined based on certain assumptions, including an assumption that any Class A LLC Units that have not been exchanged are deemed exchanged for the market value of Class A Common Stock at the time of the termination or the change of control and an assumption that the Company would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax Receivable Agreements.
The amount due and payable in those circumstances is determined based on certain assumptions, including an assumption that any Class A LLC Units that have not been exchanged are deemed exchanged for the market value of Class A Common Stock at the time of the termination or the change of control and an assumption that the Company would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax Receivable Agreement.
See “—Risks Related to Our Lending Business—If we are unable to obtain sufficient capital to meet the financing requirements of our business, or if we fail to comply with our debt agreements, our business, financing activities, financial condition, and results of operations will be adversely affected.” Additionally, in circumstances where the unpaid principal balance (“UPB”) of a HECM securitized into an HMBS issued pursuant to Ginnie Mae’s existing HMBS program reaches 98% of the maximum claim amount (which is the maximum FHA insurance amount available for a HECM), the Company is required under Ginnie Mae guidelines to repurchase such HECM from the securitization, which requires the Company to maintain additional liquidity or access to capital (in the form of financing capacity or otherwise).
See “—Risks Related to Our Lending Business—If we are unable to obtain sufficient capital to meet the financing requirements of our business, or if we fail to comply with our debt agreements, our business, financing activities, financial condition, and results of operations will be adversely affected.” Additionally, in circumstances where the unpaid principal balance (“UPB”) of a HECM loan securitized into HMBS issued pursuant to Ginnie Mae’s existing HMBS program reaches 98% of the maximum claim amount (which is the maximum FHA insurance amount available for a HECM loan), the Company is required under Ginnie Mae guidelines to repurchase such HECM loan from the securitization, which requires the Company to 14 maintain additional liquidity or access to capital (in the form of financing capacity or otherwise).
Our security measures are reasonably designed to protect against security breaches and cyber-attacks, but our failure to prevent such security breaches and cyber-attacks could subject us to liability, regulatory action, decrease our profitability, and damage our reputation.
Our security measures are reasonably designed to protect against 22 security breaches and cyber-attacks, but our failure to prevent such security breaches and cyber-attacks could subject us to liability, regulatory action, decrease our profitability, and damage our reputation.
In particular, a change in the value of any of our assets could negatively affect our ability to avoid registration under 42 the Investment Company Act and cause the need for a restructuring of our investment portfolio.
In particular, a change in the value of any of our assets could negatively affect our ability to avoid registration under the Investment Company Act and cause the need for a restructuring of our investment portfolio.
Adverse changes in the California 18 economy may be caused by inflation, recession, unemployment, state or local real estate laws and regulations, or other factors beyond our control.
Adverse changes in the California economy may be caused by inflation, recession, unemployment, state or local real estate laws and regulations, or other factors beyond our control.
We have sold or transferred a substantial portion of our traditional mortgage and commercial mortgage MSR over the course of 2023 and 2024, which has reduced our exposure to the Traditional Servicer and the Commercial Servicer.
We have sold or transferred a substantial portion of our traditional mortgage and commercial mortgage MSR over the course of 2023, 2024, and 2025, which has reduced our exposure to the Traditional Servicer and the Commercial Servicer.
However, the proceeds of the ultimate 35 foreclosure sale will be allocated first to the first lien mortgage loan lender until the first lien mortgage loan is paid in full, and only then to the holder of the second lien mortgage loan.
However, the proceeds of the ultimate foreclosure sale will be allocated first to the first lien mortgage loan lender until the first lien mortgage loan is paid in full, and only then to the holder of the second lien mortgage loan.
In the event of a breach, we may be required to repurchase a mortgage loan or indemnify the purchaser, and any subsequent loss on the mortgage loan may be borne by us.
In the event of a breach, we may be required to repurchase a mortgage loan or 32 indemnify the purchaser, and any subsequent loss on the mortgage loan may be borne by us.
It is accordingly dependent upon distributions from FOA Equity to pay taxes, make payments under the Tax Receivable Agreements, and pay dividends.” If we are unable to meet our debt service obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, which could cause us to default on our debt obligations and impair our liquidity.
It is accordingly dependent upon distributions from FOA Equity to pay taxes, make payments under the Tax Receivable Agreement, and pay dividends.” If we are unable to meet our debt service obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, which could cause us to default on our debt obligations and impair our liquidity.
Further, subject to the limits contained in the agreements that govern our warehouse facilities and lines of credit, the indentures that govern the Senior Secured Notes, the Exchangeable Secured Notes, and the 2025 Unsecured Notes, and the applicable agreements governing our other existing indebtedness, we may be able to enter into additional arrangements and incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes.
Further, subject to the limits contained in the agreements that govern our warehouse facilities and lines of credit, the indentures that govern the Senior Secured Notes and the Exchangeable Secured Notes, and the applicable agreements governing our other existing indebtedness, we may be able to enter into additional arrangements and incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes.
As a result of such events, we could ultimately be forced into bankruptcy or liquidation. Risks Related to Our Organizational Structure The Company is a holding company and its only material asset is its interest in FOA Equity. It is accordingly dependent upon distributions from FOA Equity to pay taxes, make payments under the Tax Receivable Agreements, and pay dividends.
As a result of such events, we could ultimately be forced into bankruptcy or liquidation. Risks Related to Our Organizational Structure The Company is a holding company and its only material asset is its interest in FOA Equity. It is accordingly dependent upon distributions from FOA Equity to pay taxes, make payments under the Tax Receivable Agreement, and pay dividends.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the applicable listing standards of the NYSE.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the applicable listing standards of the NYSE and NYSE Texas.
In these situations, the Company’s obligations under the Tax Receivable Agreements could have a substantial negative impact on its liquidity and could have the effect of delaying, deferring, or preventing certain mergers, asset sales, other forms of business combination, or other changes of control due to the additional transaction costs a potential acquirer may attribute to satisfying such obligations.
In these situations, the Company’s obligations under the Tax Receivable Agreement could have a substantial negative impact on its liquidity and could have the effect of delaying, deferring, or preventing certain mergers, asset sales, other forms of business combination, or other changes of control due to the additional transaction costs a potential acquirer may attribute to satisfying such obligations.
Further, if we are unable to repay, refinance, or restructure our indebtedness under our secured debt upon an event of default, including our warehouse facilities, lines of credit, or senior secured 49 notes, the holders of such debt could elect to terminate their commitments thereunder, cease making loans, and institute foreclosure proceedings against our assets.
Further, if we are unable to repay, refinance, or restructure our indebtedness under our secured debt upon an event of default, including our warehouse facilities, lines of credit, or senior secured notes, the holders of such debt could elect to terminate their commitments thereunder, cease making loans, and 50 institute foreclosure proceedings against our assets.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRobertson currently advises several companies in the Cyber Security Industry and is active in a number of information security communities and groups. Prior to his 60 appointment as CISO in October 2021, he served as our Deputy CISO. Before joining the Company, Mr. Robertson worked for the National Security Agency and the U.S.
Biggest changePrior to his appointment as CISO in October 2025, he had served as our interim CISO since June 2025 and as our Deputy CISO since 2024. Before joining the Company, Mr. Brouch worked for Morgan Stanley, the National Security Agency, and the U.S. Marine Corps, where he held various leadership positions, including in cybersecurity. Mr.
Risk Factors— Risks Related to the Business of the Company — A security breach or a cyber-attack could adversely affect our results of operations and financial condition.” Cybersecurity Governance Board of Directors Oversight The Board of Directors oversees the risks to the Company from cybersecurity threats by periodically reviewing information technology security reports from management, including our Chief Information Security Officer (“CISO”), as well as reports from the Audit Committee of the Board of Directors.
Risk Factors— Risks Related to the Business of the Company — A security breach or a cyber-attack could adversely affect our results of operations and financial condition.” 62 Cybersecurity Governance Board of Directors Oversight The Board of Directors oversees the risks to the Company from cybersecurity threats by periodically reviewing information technology security reports from management, including our Chief Information Security Officer (“CISO”), as well as reports from the Audit Committee of the Board of Directors.
The 59 Company also has a data incident response plan in place that outlines expected actions in the event of a data security incident. The Company prioritizes protecting and informing customers, clients, and employees in the event of a data security incident, as is appropriate.
The Company also has a data incident response plan in place that outlines expected actions in the event of a data security incident. The Company prioritizes protecting and informing customers, clients, and employees in the event of a data security incident, as is appropriate.
The Company applies cybersecurity assessment tools that analyze the Company’s ability to identify, protect from, detect, respond to, and recover from cybersecurity threats and that analyze the various controls put into place by the Company’s information security program.
The Company applies cybersecurity assessment tools that analyze the Company’s ability to identify, protect from, detect, respond to, govern, and recover from cybersecurity threats and that analyze the various controls put into place by the Company’s information security program.
Management Oversight We have a dedicated enterprise security team responsible for assessing and managing our material risks from cybersecurity threats. Our enterprise security team is led by our CISO, Drew Robertson, who has extensive experience in cybersecurity. In addition to acting as our CISO, Mr.
Management Oversight We have a dedicated enterprise security team responsible for assessing and managing our material risks from cybersecurity threats. Our enterprise security team is led by our CISO, Chris Brouch, who has extensive experience in cybersecurity.
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Army, where he held various leadership positions in computer network defense, computer network exploitation, and intelligence oversight. Mr. Robertson holds a BA in Organizational Management, an MS in Cybersecurity Policy, and an MBA.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate, operations, and branch real estate portfolio consists of 70,000 square feet of leased office and retail space which is used to support our unified modern retirement solutions platform. Our headquarters is in Plano, Texas. We maintain additional office space for other various corporate use and operations in Oklahoma, Minnesota, and California.
Biggest changeItem 2. Properties Our corporate, operations, and branch real estate portfolio consists of 55,000 square feet of leased office and retail space which is used to support our home equity-based financing solutions business. Our headquarters is in Plano, Texas. We maintain additional office space for other various corporate use and operations in Oklahoma, Minnesota, and California.
We regularly evaluate current and projected space requirements, considering the constraints of our existing lease agreements and the expected scale of our business. We operate through a hybrid workforce model which combines remote work for substantially all of our workforce and in-office when required.
We regularly evaluate current and projected space requirements, considering the constraints of our existing lease agreements and the expected scale of our business. We operate through a hybrid workforce model that combines remote work for substantially all of our workforce with in-office work when required.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information O ur Class A Common Stock has been traded on the NYSE under the ticker symbol “FOA” since April 5, 2021.
Biggest changeItem 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock O ur Class A Common Stock has been traded on the NYSE since April 5, 2021. On August 15, 2025, FOA’s Class A Common Stock also began trading on NYSE Texas.
For our Class A Common Stock, the actual number of shareholders is greater than this number of record holders and includ es shareholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. There is no public market for our Class B Common Stock.
For our Class A Common Stock, the actual number of shareholders is greater than this number of record holders and includ es shareholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
As of March 11, 2025, there were 20 stockholders of record of our Class A Common Stock and 14 stockholders of record of our Class B Common Stock.
As of March 11, 2026, there were 15 stockholders of record of our Class A Common Stock and 12 stockholders of record of our Class B Common Stock.
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FOA continues to maintain its primary listing on the NYSE and trades under the same “FOA” ticker symbol on both exchanges. There is no public trading market for our Class B Common Stock.
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Dividends We expect to retain future earnings, if any, for future operations, expansion, debt repayment, and the payment of quarterly dividends on our Series A Preferred Stock and have no current plans to pay any cash dividends on our Class A Common Stock for the foreseeable future.
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Any decision to declare and pay dividends on our Class A Common Stock in the future will be made at the discretion of our Board and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions, and other factors that our Board may deem relevant.
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In addition, our ability to pay dividends on our Class A Common Stock may be limited by covenants of any existing and future outstanding indebtedness we or our subsidiaries incur, by covenants set forth in the Certificate of Designations, and by covenants relating to any future series or class of preferred stock that we may issue.
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Securities Authorized for Issuance under Equity Compensation Plans Refer to Note 26 - Equity in the Notes to Consolidated Financial Statements for additional information related to our compensation plans under which equity securities are authorized for issuance.
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Issuer Purchases of Equity Securities On August 4, 2025, the Company entered into the Repurchase Agreement, which was subsequently amended and restated by the Amended and Restated Repurchase Agreement on November 13, 2025.
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On December 4, 2025, pursuant to the Amended and Restated Repurchase Agreement, the Company repurchased shares of Class A Common S tock and Class A LLC Units . Refer to Note 23 - Related Party Transactions in the Notes to Consolidated Financial Statements for additional information.
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Period Number of Shares and Units Repurchased Average Repurchase Price per Share or Unit Number of Shares and Units Repurchased Under the Publicly Announced Repurchase Agreement Maximum Number of Shares and Units Yet to Be Repurchased Under the Repurchase Agreement 10/1/2025 to 10/31/2025 — $ — — 8,029,817 11/1/2025 to 11/30/2025 — — — 8,029,817 12/1/2025 to 12/31/2025 4,014,909 10.00 4,014,909 4,014,908 Total 4,014,909 4,014,909

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeNet fair value changes in our Portfolio Management segment include fair value adjustments primarily related to the following assets and liabilities: • Loans held for investment, subject to HMBS related obligations, at fair value • Loans held for investment, subject to nonrecourse debt, at fair value • Loans held for investment, at fair value • Loans held for sale, at fair value • HMBS related obligations, at fair value; and • Nonrecourse debt, at fair value. 75 Key Metrics The following table provides a summary of the assets and liabilities under management by our Portfolio Management segment (in thousands) : December 31, 2024 December 31, 2023 Cash and cash equivalents $ 29,355 $ 32,245 Restricted cash 254,335 178,319 Loans held for investment, subject to HMBS related obligations, at fair value 18,669,962 17,548,763 Loans held for investment, subject to nonrecourse debt, at fair value 9,288,403 8,272,393 Loans held for investment, at fair value 520,103 575,228 Other assets, net 115,120 166,153 Total earning assets 28,877,278 26,773,101 HMBS related obligations, at fair value 18,444,370 17,353,720 Nonrecourse debt, at fair value 8,954,068 7,904,200 Other financing lines of credit 918,247 928,479 Payables and other liabilities 55,746 107,664 Total financing of portfolio 28,372,431 26,294,063 Net carrying value of earning assets $ 504,847 $ 479,038 The following tables provide a summary of our Portfolio Management segment’s key metrics (dollars in thousands): December 31, 2024 December 31, 2023 Reverse Mortgages Loan count 90,340 91,888 Active UPB $ 26,477,354 $ 24,923,313 Due and payable 415,400 371,913 Foreclosure 504,675 524,988 Claims pending 79,138 130,928 Ending UPB $ 27,476,567 $ 25,951,142 Average UPB $ 304 $ 282 Weighted average coupon 7.11 % 7.35 % Weighted average age (in months) 45 40 Percentage in foreclosure 1.8 % 2.0 % For the year ended December 31, 2024 For the year ended December 31, 2023 Investment and Capital Markets Number of structured deals 8 5 Structured deals (size in notes) $ 3,617,495 $ 1,925,699 Revenues In the table below is a summary of the components of our Portfolio Management segment’s total revenues (in thousands): 76 For the year ended December 31, 2024 For the year ended December 31, 2023 Portfolio interest income: Interest income $ 1,905,214 $ 1,628,877 Interest expense (1,637,286) (1,360,998) Net portfolio interest income 267,928 267,879 Other income (expense): Gain on securitization of HECM tails, net 45,535 25,583 Fair value changes from model amortization (201,101) (228,391) Fair value changes from market inputs or model assumptions 55,924 58,696 Net fair value changes on loans and related obligations (99,642) (144,112) Fee income 3,183 10,283 Gain (loss) on sale and other income from loans held for sale, net 378 (18,691) Net other income (expense) (96,081) (152,520) Total revenues $ 171,847 $ 115,359 Certain of our financial instruments are valued utilizing a process that combines the use of a discounted cash flow (“DCF”) model and analysis of current market data to arrive at an estimate of fair value.
Biggest changeThis increase was partially offset by a $4.4 million decrease in General and administrative expenses during the year ended December 31, 2025 primarily due to cost-cutting measures implemented in 2024 and continued into 2025 to align expenses with our focus on providing home equity-based financing solutions for a modern retirement . • Total salaries, benefits, and related expenses increased $8.6 million or 10.3% primarily due to higher compensation resulting from increased loan production, partially offset by a decrease in average headcount during the year ended December 31, 2025 when compared to the 2024 period. 74 Portfolio Management Segment The following table presents our Portfolio Management segment’s results (in thousands): Year ended December 31, 2025 2024 Portfolio interest income: Interest income $ 1,919,970 $ 1,905,214 Interest expense (1,659,210) (1,637,286) Net portfolio interest income 260,760 267,928 Other income (expense): Gains on securitization of HECM tails, net 45,365 45,535 Fair value changes from model amortization (153,656) (201,101) Fair value changes from market inputs or model assumptions 146,963 55,924 Net fair value changes on loans and related obligations 38,672 (99,642) Fee income 3,072 3,561 Net other income (expense) 41,744 (96,081) Total revenues 302,504 171,847 Total expenses 104,150 87,449 NET INCOME BEFORE INCOME TAXES $ 198,354 $ 84,398 The following table presents the assets and liabilities in our Portfolio Management segment (in thousands) : December 31, 2025 December 31, 2024 Cash and cash equivalents $ 33,028 $ 29,355 Restricted cash 234,885 254,335 Loans held for investment, subject to HMBS related obligations, at fair value 19,135,403 18,669,962 Loans held for investment, subject to nonrecourse debt, at fair value 10,026,177 9,288,403 Loans held for investment, at fair value 870,081 520,103 Other assets, net 158,944 115,120 Total earning assets 30,458,518 28,877,278 HMBS related obligations, at fair value 18,912,226 18,444,370 Nonrecourse debt, at fair value 9,736,493 8,954,068 Other financing lines of credit 1,187,699 918,247 Payables and other liabilities 55,524 55,746 Total financing of portfolio 29,891,942 28,372,431 Net carrying value of earning assets $ 566,576 $ 504,847 75 Key Metrics The following tables present our Portfolio Management segment’s key metrics (dollars in thousands): December 31, 2025 December 31, 2024 Reverse Mortgage Loans Active UPB $ 27,833,679 $ 26,477,354 Due and payable 516,618 415,400 Foreclosure 559,300 504,675 Claims pending 98,477 79,138 Ending UPB $ 29,008,074 $ 27,476,567 Loan count 88,493 90,340 Average UPB $ 328 $ 304 Weighted average coupon 6.71 % 7.11 % Weighted average age (in months) 50 45 Percentage of UPB in foreclosure 1.9 % 1.8 % Year ended December 31, 2025 2024 Capital Markets Transactions Number of securitizations 6 8 Notes issued $ 5,369,224 $ 3,617,495 Revenues The following table presents the components of our Portfolio Management segment’s total revenues (in thousands): Year ended December 31, 2025 2024 Portfolio interest income: Interest income $ 1,919,970 $ 1,905,214 Interest expense (1,659,210) (1,637,286) Net portfolio interest income 260,760 267,928 Other income (expense): Gains on securitization of HECM tails, net 45,365 45,535 Fair value changes from model amortization (153,656) (201,101) Fair value changes from market inputs or model assumptions 146,963 55,924 Net fair value changes on loans and related obligations 38,672 (99,642) Fee income 3,072 3,561 Net other income (expense) 41,744 (96,081) Total revenues $ 302,504 $ 171,847 The majority of our financial instruments are valued utilizing a process that combines the use of a discounted cash flow (“DCF”) model and analysis of current market data to arrive at an estimate of fair value.
Our Portfolio Management segment provides structuring and product development expertise as well as broker/dealer and institutional asset management capabilities, which facilitates innovation and the successful monetization of our loans. We securitize HECM into HMBS, which Ginnie Mae guarantees, and sell the HMBS in the secondary market while retaining the rights to service the HECM.
Our Portfolio Management segment provides structuring and product development expertise as well as broker/dealer and institutional asset management capabilities, which facilitates innovation and the successful monetization of our loans. We securitize HECM loans into HMBS, which Ginnie Mae guarantees, and sell HMBS in the secondary market while retaining the rights to service the HECM loans.
Retirement Solutions Our Retirement Solutions segment conducts all of our Company’s loan origination activity, including the origination and acquisition of HECM and non-agency reverse mortgage loans through both the retail and TPO channels.
Retirement Solutions Our Retirement Solutions segment conducts all of our Company’s loan origination activity, including the origination and acquisition of HECM loans and non-agency reverse mortgage loans through both the retail and TPO channels.
The interest recognized on these financial instruments is recorded in Interest income or Interest expense in the Consolidated Statements of Operations. The interest on our notes payable is recorded in Non-funding interest expense, net, in the Consolidated Statements of Operations.
The interest recognized on these financial instruments is recorded in Interest income or Interest expense in the Consolidated Statements of Operations. The interest on our notes payable is recorded in Non-funding interest income (expense), net, in the Consolidated Statements of Operations.
Equity-based compensation, excluding forfeitures and accelerations associated with restructuring activities, which are included in certain non-recurring costs. 5. Certain non-recurring costs and adjustments that management believes should be excluded as these do not relate to a recurring part of the core business operations.
Equity-based compensation, excluding forfeitures and accelerations associated with restructuring activities, which are included in certain non-recurring costs. 5. Certain non-recurring costs and adjustments that management believes should be excluded as these do not relate to a recurring part of the core business operations.
Our primary uses of funds for liquidity include: (i) funding of borrower advances and draws on outstanding loans; (ii) originations of loans; (iii) payment of operating expenses; and (iv) repayment of borrowings and repurchases or redemptions of outstanding indebtedness.
Our primary uses of funds for liquidity include: (i) originations of loans; (ii) funding of borrower advances and draws on outstanding loans; (iii) payment of operating expenses; and (iv) repayment of borrowings and repurchases or redemptions of outstanding indebtedness.
Holders of participating interests in the HMBS have no recourse against assets other than the underlying HECM loans, remittances, or collateral on those loans while they are in the securitization pools, except for standard representations and warranties and our contractual obligation to service the HECM and the HMBS.
Holders of participating interests in the HMBS have no recourse against assets other than the underlying HECM loans, remittances, or collateral on those loans while they are in the securitization pools, except for standard representations and warranties and our contractual obligation to service the HECM loans and the HMBS.
The transactions are structured as secured borrowings with the loan assets and liabilities, respectively, included in the Consolidated Statements of Financial Condition as Loans held for investment, subject to nonrecourse debt, at fair value, and Nonrecourse debt, at fair value.
The transactions are structured as secured borrowings, with the loan assets and liabilities included in the Consolidated Statements of Financial Condition as Loans held for investment, subject to nonrecourse debt, at fair value, and Nonrecourse debt, at fair value, respectively.
Management believes these key financial measures provide an additional view of our performance over the long-term and provide useful information that we use in order to maintain and grow our business. These non-GAAP financial measures should not be considered as an alternative to net income (loss), operating cash flows, or any other performance measures determined in accordance with U.S. GAAP.
Management believes these key financial measures provide an additional view of our performance over the long-term and provide useful information that we use in order to maintain and grow our business. These non-GAAP financial measures should not be considered as an alternative to net income, operating cash flows, or any other performance measures determined in accordance with U.S. GAAP.
This supplemental metric is utilized by our management team to assess the underlying key drivers and operational performance of the continuing operations of the business. In addition, analysts, investors, and creditors may use this measure when analyzing our operating performance and comparability to peers. Adjusted net income (loss) is not a presentation made in accordance with U.S.
This supplemental metric is utilized by our management team to assess the underlying key drivers and operational performance of the continuing operations of the business. In addition, analysts, investors, and creditors may use this measure when analyzing our operating performance and comparability to peers. Adjusted net income is not a presentation made in accordance with U.S.
Management considers adjusted earnings (loss) per share important in evaluating the Company as a whole. This supplemental metric is utilized by our management team to assess the underlying key drivers and operational performance of the continuing operations of the business. In addition, analysts, investors, and creditors may use this measure when analyzing our operating performance and comparability to peers.
Management considers adjusted earnings per share important in evaluating the Company as a whole. This supplemental metric is utilized by our management team to assess the underlying key drivers and operational performance of the continuing operations of the business. In addition, analysts, investors, and creditors may use this measure when analyzing our operating performance and comparability to peers.
We include an adjustment for the significant market or model input components of the change in fair value because, while based on real observable and/or predicted changes in drivers of the valuation of assets, they may be mismatched in any given period with the actual change in the underlying economics or when they will be realized in actual cash flows.
We include an adjustment for the significant market or model input components of the change in fair value because, while based on real observable and/or predicted changes in drivers of the valuation of assets or liabilities, they may be mismatched in any given period with the actual change in the underlying economics or when they will be realized in actual cash flows.
Since the advances to us are generally for less than 100% of the principal balance of the loans, we are required to use working capital to fund the remaining portion of the principal balance of the loans . Upon expiration, management believes it will either renew its existing facilities or obtain sufficient additional lines of credit.
Since the advances to us are generally for less than 100% of the principal balance of the mortgage loans, we are required to use working capital to fund the remaining portion of the principal balance of the loans . Upon expiration, management believes it will either renew its existing facilities or obtain sufficient additional lines of credit.
GAAP, and our definition and use of this measure may vary from other companies in our industry. Adjusted net income (loss) provides visibility to the underlying operating performance by excluding the impact of certain items that management does not believe are representative of our core earnings.
GAAP, and our definition and use of this measure may vary from other companies in our industry. Adjusted net income provides visibility to the underlying operating performance by excluding the impact of certain items that management does not believe are representative of our core earnings.
As a result, the Company accounts for HECM loans transferred into HMBS securitizations as well as its HECM buyout and non-agency reverse mortgage securitizations as secured borrowings and continues to recognize the loans as held for investment, subject to HMBS related obligations or nonrecourse debt, along with the corresponding liability for the HMBS related obligations or nonrecourse debt.
As a result, the Company accounts for HECM loans transferred into HMBS as well as its HECM buyout and non-agency reverse mortgage loan securitizations as secured borrowings and continues to recognize the loans as held for investment, subject to HMBS related obligations or nonrecourse debt, along with the corresponding liability for the HMBS related obligations or nonrecourse debt.
Adjusted net income (loss) may also include other adjustments, as applicable, based upon facts and circumstances, consistent with our intent of providing a supplemental means of evaluating our operating performance. Adjusted EBITDA We define adjusted EBITDA as net income (loss) from continuing operations adjusted for: 1. Income taxes 2.
Adjusted net income may also include other adjustments, as applicable, based upon facts and circumstances, consistent with our intent of providing a supplemental means of evaluating our operating performance. Adjusted EBITDA We define adjusted EBITDA as net income from continuing operations adjusted for: 1. Income taxes 2.
When we draw on these facilities, we generally must transfer and pledge eligible assets to the lender and comply with various financial and other covenants. Under our facilities, we generally transfer the assets at a haircut, which serves as the primary credit enhancement for the lender.
When we draw on these facilities, we generally must transfer and pledge eligible assets to the lender and comply with various financial and other covenants. Under the facilities, we generally transfer the assets at a haircut, which serves as the primary credit enhancement for the lender.
We estimate the fair value of these loans using a process that combines the use of a DCF model and analysis of current market data. The cash flow assumptions and prepayment assumptions used in the model are based on various factors.
We estimate the fair value of these loans using a process that combines the use of a DCF model and analysis of current market data. The cash flow assumptions and prepayment and repayment assumptions used in the model are based on various factors.
We estimate the fair value of these obligations using a process that combines the use of a DCF model and analysis of current market data. The cash flow assumptions and prepayment assumptions used in the model are based on various factors.
We estimate the fair value of these obligations using a process that combines the use of a DCF model and analysis of current market data. The cash flow assumptions and prepayment and repayment assumptions used in the model are based on various factors.
We estimate the fair value of this debt using a process that combines the use of a DCF model and analysis of current market data. The cash flow assumptions and prepayment assumptions used in the model are based on various factors.
We estimate the fair value of this debt using a process that combines the use of a DCF model and analysis of current market data. The cash flow assumptions and prepayment and repayment assumptions used in the model are based on various factors.
The changes in fair value due to portfolio runoff and realization of modeled income and expenses are recorded in Fair value changes from model amortization in the Consolidated Statements of Operations, and other fair value changes are recorded in Fair value changes from market inputs or model assumptions in the Consolidated Statements of Operations.
The changes in fair value due to portfolio runoff and realization of modeled income and expenses are recorded in Fair value changes from model amortization in the Consolidated Statements of Operations, and other fair 76 value changes are recorded in Fair value changes from market inputs or model assumptions in the Consolidated Statements of Operations.
We have determined that HECM loans transferred under the current Ginnie Mae HMBS securitization program do not meet the requirements for sale accounting and are not derecognized upon date of transfer.
We have determined that HECM loans transferred under the current Ginnie Mae HMBS program do not meet the requirements for sale accounting and are not derecognized upon date of transfer.
Deterioration in the financial condition, earnings, 84 or cash flow of FOA Equity and its subsidiaries for any reason could limit or impair FOA Equity’s ability to make such distributions.
Deterioration in the financial condition, earnings, or cash flow of FOA Equity and its subsidiaries for any reason could limit or impair FOA Equity’s ability to make such distributions.
The Senior Secured Notes bear interest at a rate of 7.875% per year until the first anniversary of the Issue Date and 8.875% per year from the first anniversary of the Issue Date to the Scheduled Maturity Date.
The Senior Secured Notes bore interest at a rate of 7.875% per year until the first anniversary of the Issue Date and bear interest at a rate of 8.875% per year from the first anniversary of the Issue Date to the Scheduled Maturity Date.
Our warehouse facilities require our borrowing subsidiaries to comply with various customary operating and financial covenants, including, without limitation, the following tests: • minimum tangible or adjusted tangible net worth; 88 • maximum leverage ratio of total liabilities (which may include off-balance sheet liabilities) or indebtedness to tangible or adjusted tangible net worth; • minimum liquidity or minimum liquid assets; and • minimum profitability.
Our warehouse facilities require our borrowing subsidiaries to comply with various customary operating and financial covenants, including, without limitation, the following tests: • minimum tangible or adjusted tangible net worth; • minimum liquidity or minimum liquid assets; 87 • maximum leverage ratio of total liabilities (which may include off-balance sheet liabilities) or indebtedness to tangible or adjusted tangible net worth; and • minimum profitability.
Accordingly, our business may not generate sufficient cash flow from operations and future borrowings may not be available from additional indebtedness or otherwise to meet our liquidity needs. If we decide to pursue one or more significant acquisitions, we may incur additional debt or sell additional equity to finance such acquisitions, which would result in additional expenses or dilution.
Accordingly, our business may not generate sufficient cash flow from operations and future borrowings may not be available from additional indebtedness or otherwise to meet our liquidity needs. If we decide to pursue one or more significant acquisitions, we may incur additional debt or sell additional equity to finance such acquisitions, which could result in additional expenses or dilution.
If FOAF elects the extension, the Senior Secured Notes will bear interest at a rate of 9.875% per year from the Scheduled Maturity Date until the Extended Maturity Date. FOAF will pay interest semi-annually in arrears on May 30 and November 30 of each year, beginning on November 30, 2024.
If FOAF elects the extension, the Senior Secured Notes will bear interest at a rate of 9.875% per year from the Scheduled Maturity Date until the Extended Maturity Date. FOAF pays interest semi-annually in arrears on May 30 and November 30 of each year, beginning on November 30, 2024.
Interest is payable either at the time the loan or securities are settled off the line or monthly in arrears, and principal is payable upon receipt of asset sale or securitization proceeds, principal distributions on the underlying pledged securities or transfer of assets to another line of credit, and upon the maturity of the facility.
Interest is generally payable at the time the loan or securities are settled off the line or monthly in arrears, and the principal is payable upon receipt of asset sale or securitization proceeds, upon principal distributions on the underlying pledged securities, upon transfer of assets to another line of credit, or upon maturity of the facility.
Refer to Note 19 - Commitments and Contingencies in the Notes to Consolidated Financial Statements for additional information. Critical Accounting Estimates Various elements of our accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions, and other subjective assessments.
Refer to Note 15 - Commitments and Contingencies in the Notes to Consolidated Financial Statements for additional information. Critical Accounting Estimates Various elements of our accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions, and other subjective assessments.
The Ginnie Mae 91 HMBS securitization program includes certain terms that do not meet the participating interest requirements and require or provide an option for the Company to reacquire the loans prior to maturity. Due to these terms, the transfer of the loans does not meet the requirements of sale accounting.
The Ginnie Mae HMBS program includes certain terms that do not meet the participating interest requirements and require or provide an option for the Company to reacquire the loans prior to maturity. Due to these terms, the transfer of the loans does not meet the requirements of sale accounting.
Refer to Note 6 - Fair Value in the Notes to Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques utilized to measure fair value. We use various internal financial models that use market participant data to value these loans.
Refer to Note 5 - Fair Value in the Notes to Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques utilized to measure fair value. We use various internal financial models that use market participant data to value these loans.
General and administrative expenses General and administrative expenses include communications and data processing costs, professional and consulting fees, occupancy, equipment rentals, other office related expenses, and other expenses. Refer to Note 22 - General and Administrative Expenses in the Notes to Consolidated Financial Statements for additional information.
General and administrative expenses General and administrative expenses include communications and data processing costs, professional and consulting fees, occupancy, equipment rentals, office related expenses, and other expenses. Refer to Note 18 - General and Administrative Expenses in the Notes to Consolidated Financial Statements for additional information.
FAR’s actual ratio of tangible net worth to total assets was below the Ginnie Mae requirement due to the Company’s determination that HECM loans transferred into HMBS securitizations as well as its HECM buyout and non-agency reverse mortgage securitizations do not meet the requirements of sale accounting and are not derecognized upon date of transfer.
FAR’s actual ratio of adjusted net worth to total assets was below the Ginnie Mae requirement due to the Company’s determination that HECM loans transferred into HMBS as well as its HECM buyout and non-agency reverse mortgage loan securitizations do not meet the requirements of sale accounting and are not derecognized upon date of transfer.
New Accounting Pronouncements Refer to Note 2 - Summary of Significant Accounting Policies within the Notes to Consolidated Financial Statements for a summary of recently adopted and recently issued accounting standards and their related effects or anticipated effects in the consolidated financial statements. 92
New Accounting Pronouncements Refer to Note 2 - Summary of Significant Accounting Policies within the Notes to Consolidated Financial Statements for a summary of recently adopted and recently issued accounting standards and their related effects or anticipated effects in the consolidated financial statements. 91
Interest is generally payable at the time the loan is settled off the line or monthly in arrears and the principal is payable upon receipt of loan sale or securitization proce eds or transfer of a loan to another line of credit.
Interest is generally payable at the time the loan is settled off the line or monthly in arrears, and the principal is payable upon receipt of loan sale or securitization proce eds, upon transfer of a loan to another line of credit, or upon maturity of the facility.
For further discussion on the potential impacts of the Federal Reserve’s monetary policies, see “Risks Related to the Business of the Company” and “Our business is significantly impacted by changes in interest rates.
For further discussion on the potential impacts of the Federal Reserve’s monetary policies and macroeconomic conditions, see “Risks Related to the Business of the Company” and “Our business is significantly impacted by changes in interest rates.
The interest rate on all outstanding facilities is the Secured Overnight Financing Rate (“SOFR”), plus applicable margin.
The interest rate on all outstanding facilities is the Secured Overnight Financing Rate, plus applicable margin.
Because of these limitations, adjusted net income (loss), adjusted EBITDA, and adjusted earnings (loss) per share should not be considered as measures of discretionary cash available to us to invest in the growth of our business or distribute to shareholders. We compensate for these limitations by relying primarily on our U.S.
Because of these limitations, adjusted net income, adjusted EBITDA, adjusted earnings per share, and tangible equity should not be considered as measures of discretionary cash available to us to invest in the growth of our business or distribute to shareholders. We compensate for these limitations by relying primarily on our U.S.
Change in fair value of deferred purchase price obligations - We are obligated to pay contingent consideration to sellers of acquired businesses based on future performance of acquired businesses (earnouts) as well as realization of tax benefits from certain exchanges of Class A LLC Units into Class A Common Stock (TRA obligation).
Change in fair value of deferred purchase price liabilities - We are obligated to pay contingent consideration to sellers of acquired businesses based on future performance of acquired businesses, as well as realization of tax benefits from certain exchanges of Class A LLC Units into Class A Common Stock (TRA obligation).
As a result, the Company accounts for HECM loans transferred into HMBS securitizations as secured borrowings and continues to recognize the loans as held for investment, along with the corresponding liability for the HMBS related obligations.
As a result, the Company accounts for HECM loans transferred into HMBS as secured borrowings and continues to recognize the loans as held for investment, subject to HMBS related obligations, along with the corresponding liability for the HMBS related obligations.
The maturity of the HMBS related obligations is directly affected by the liquidation of the reverse loans or liquidation of real estate owned properties and events of default as stipulated in the reverse loan agreements with borrowers. As an HMBS issuer, FAR assumes certain obligations related to each security it issues.
The maturity of the HMBS related obligations is directly affected by the liquidation of the reverse mortgage loans and real estate owned properties, as well as by events of default stipulated in the reverse mortgage loan agreements with borrowers. As an HMBS issuer, FAR assumes certain obligations related to each security it issues.
Remittances received on the reverse loans, if any, proceeds received from the sale of real estate owned, and our funds used to repurchase reverse loans are used to reduce the HMBS related obligations by making payments to the securitization pools, which then remit the payments to the beneficial interest holders of the HMBS.
Remittances received on the reverse mortgage loans, proceeds received from the sale of real estate owned, and our funds used to repurchase reverse mortgage loans are used to reduce the HMBS related obligations by making payments to the securitization pools, which then remit the payments to the beneficial interest holders of the HMBS.
Adjusted net income (loss), adjusted EBITDA, and adjusted earnings (loss) per share have important limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.
Adjusted net income, adjusted EBITDA, adjusted earnings per share, and tangible equity have important limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.
GAAP, excluding the period-to-date estimated impact of the change in fair value attributable to current period additions and the change in fair value attributable to post-origination loan advances, accretion, and model amortization (i.e., portfolio run-off), net of hedge gains and losses, and any securitization expenses incurred in securitizing our mortgage loans held for investment, subject to nonrecourse debt.
GAAP, excluding the estimated impact of the change in fair value attributable to net origination gains and the change in fair value attributable to post-origination loan advances, accretion, and model amortization (i.e., portfolio run-off), net of hedge gains and losses, and any securitization expenses incurred in securitizing our mortgage loans held for investment, subject to nonrecourse debt.
We believe that the judgment, estimates, and assumptions used in the preparation of the consolidated financial statements are appropriate given the factual circumstances at the time.
We believe that the judgments, estimates, and assumptions used in the preparation of the consolidated financial statements are appropriate given the factual circumstances at the time.
Once implemented, the HMBS 2.0 program will enable us to securitize into HMBS additional HECM that are required to be bought out of pools of HECM securitized pursuant to Ginnie Mae’s existing HMBS program or otherwise not eligible for securitization pursuant to Ginnie Mae’s existing HMBS program (subject to expanded eligibility parameters applicable to the HMBS 2.0 program), increasing the HECM that we are able to securitize into HMBS.
If implemented, the HMBS 2.0 program will enable us to securitize into HMBS additional HECM loans that are required to be bought out of pools of HECM loans securitized pursuant to Ginnie Mae’s existing HMBS program or otherwise not eligible for securitization pursuant to Ginnie Mae’s existing HMBS program (subject to expanded eligibility parameters applicable to the HMBS 2.0 program), increasing the HECM 66 loans that we are able to securitize into HMBS.
Change in fair value related to the exchange of our senior notes - We accounted for the exchange of our senior notes as an extinguishment of the 2025 Unsecured Notes and the issuance of the Senior Secured Notes and Exchangeable Secured Notes (collectively, the “Secured Notes”). The Secured Notes are initially recorded at fair value.
Change in fair value related to the exchange of our senior notes - We accounted for the exchange of our senior notes as an extinguishment of the senior unsecured notes and the issuance of the senior secured notes and exchangeable senior secured notes (collectively, the “Secured Notes”). The Secured Notes were initially recorded at fair value.
As a result, the transfers of the HECM do not qualify for sale accounting, and we, therefore, account for these transfers as financings.
As a result, the transfers of the HECM loans do not qualify for sale accounting, and therefore, we account for these transfers as secured financings.
In particular, we have identified several policies that, due to the judgment, estimates, and assumptions inherent in those policies, are critical to an understanding of the consolidated financial statements. These policies relate to fair value measurements, particularly those determined to be Level 3 as discussed in Note 6 - Fair Value in the Notes to Consolidated Financial Statements.
In particular, we have identified several policies that, due to the judgments, estimates, and assumptions inherent in those policies, are critical to an understanding of the consolidated financial statements. These policies relate to fair value measurements, particularly those determined to be Level 3 as discussed in Note 5 - Fair Value in the Notes to Consolidated Financial Statements.
These items include amounts recognized for settlement of legal and regulatory matters, acquisition or divestiture-related expenses, and other one-time charges. 6. Income tax benefit (provision) adjustments to apply an effective combined corporate tax rate to adjusted net income (loss) before income taxes. Management considers adjusted net income (loss) important in evaluating our Company as a whole.
These items include amounts recognized for settlement of legal and regulatory matters, acquisition or divestiture-related expenses, and other one-time charges. 79 6. Income tax provision adjustments to apply an effective combined federal and state corporate tax rate to adjusted net income before income taxes. Management considers adjusted net income important in evaluating our Company as a whole.
Under the facilities, loans are generally transferred and/or pledged at an advance rate less than the principal balance of the loans (the “haircut”), which serves as the primary credit enhancement for the lender.
Under the facilities, mortgage loans are generally transferred and/or pledged at an advance rate that is less than the principal balance of the loans (the “haircut”), which serves as the primary credit enhancement for the lender.
Refer to Note 14 - Other Financing Lines of Credit in the Notes to Consolidated Financial Statements for additional information. Notes Payable Senior Notes Exchange On November 5, 2020, FOAF issued $350 million aggregate principal amount of senior unsecured notes due November 15, 2025.
Refer to Note 10 - Other Financing Lines of Credit in the Notes to Consolidated Financial Statements for additional information. Notes Payable Senior Notes Exchange On November 5, 2020, FOAF issued $350 million aggregate principal amount of senior unsecured notes due November 15, 2025 (the “2025 Unsecured Notes”).
Volatility in market conditions resulting from the foregoing events have caused and may continue to cause credit spreads to widen, which reduces, among other things, availability of credit to our Company on favorable terms, liquidity in the market, the fair value of the assets on our balance sheet, and price transparency of real estate related or asset-backed assets.
Volatility in market conditions resulting from the foregoing policies may cause credit spreads to widen, which reduces, among other things, availability of credit to our Company on favorable terms, liquidity in the market, the fair value of assets on our balance sheet, and price transparency of real estate-related or asset-backed assets.
Fair value changes from market inputs or model assumptions Fair value changes from market inputs or model assumptions represent other changes to fair value of portfolio-related assets and liabilities not related to new originations, portfolio runoff, or realization of modeled income and expenses. These changes are driven primarily by updates to market inputs or model changes.
Fair value changes from market inputs or model assumptions Fair value changes from market inputs or model assumptions represent changes to the fair value of portfolio-related assets and liabilities that are not related to new originations, portfolio runoff, or realization of modeled income and expenses. These changes are driven primarily by updates to market inputs or changes in model assumptions.
Existing noteholders, representing 97.892% of the aggregate principal amount outstanding of the 2025 Unsecured Notes, exchanged their respective 2025 Unsecured Notes in consideration for (i) the issuance of (a) $195,783,947 of FOAF’s new 7.875% Senior Secured Notes due November 89 30, 2026, with FOAF’s option to extend until November 30, 2027, (b) $146,793,000 of FOAF’s new 10.000% Exchangeable Senior Secured Notes due November 30, 2029, and (ii) cash consideration of $856,555.
Existing noteholders, representing 97.892% of the aggregate principal amount outstanding of the 2025 Unsecured Notes, exchanged their respective 2025 Unsecured Notes in consideration for (i) the issuance of (a) $195,783,947 of FOAF’s new 7.875% Senior Secured Notes due November 30, 2026, with FOAF’s option to extend until November 30, 2027 (subsequently 88 amended as described below), (b) $146,793,000 of FOAF’s new 10.000% Exchangeable Senior Secured Notes due November 30, 2029, and (ii) cash consideration of $856,555.
In addition to the above contractual obligations, we have also been involved with several securitizations of HECM loans, which were structured as secured borrowings. These structures resulted in us carrying the securitized loans in the Consolidated Statements of Financial Condition and recognizing the asset-backed certificates acquired by third parties as HMBS related obligations.
In addition to the contractual obligations above, we have also been involved in securitizations of HECM loans that were structured as secured borrowings. These structures resulted in us recording the securitized loans in the Consolidated Statements of Financial Condition and recognizing the asset-backed certificates acquired by third parties as HMBS related obligations.
The adjustment for changes in fair value of loans and securities held for investment and related obligations due to market inputs or model assumptions is calculated based on changes in fair value associated with the above assets and liabilities calculated in accordance with U.S.
The adjustment for changes in fair value of loans, retained bonds, and related obligations due to market inputs or model assumptions is calculated based on changes in fair value associated with the above assets and liabilities calculated in accordance with U.S.
Outstanding reverse mortgage loans held for investment, at fair value, include originated or purchased reverse mortgage loans that are expected to be sold or securitized in the secondary market, reverse mortgage loans that were previously securitized into either an HMBS or private securitization, or repurchased reverse loans out of Ginnie Mae securitization pools.
Loans held for investment, at fair value, include originated or purchased reverse mortgage loans that are expected to be securitized in the secondary market, 90 reverse mortgage loans that were previously securitized into either an HMBS or a private securitization, and reverse mortgage loans that were purchased out of Ginnie Mae securitization pools.
Gain on securitization of HECM tails, net Gain on securitization of HECM tails, net, is the fair value gain we recognize based on tail securitizations, net of Ginnie Mae guarantee fees. Fair value changes from model amortization Fair value changes from model amortization are from portfolio runoff and realization of modeled income and expenses.
Gains on securitization of HECM tails, net Gains on securitization of HECM tails, net, are the fair value gains we recognize from tail securitizations, net of Ginnie Mae guarantee fees. 68 Fair value changes from model amortization Fair value changes from model amortization are from portfolio runoff and realization of modeled income and expenses.
The most significant obligation is the requirement to purchase loans out of the Ginnie Mae securitization pools once they reach certain limits set at loan origination for the maximum UPB allowed. Performing repurchased loans are generally conveyed to HUD, and nonperforming repurchased loans are generally liquidated in accordance with program requirements.
The most significant obligation is the requirement to purchase loans out of the Ginnie Mae securitization pools once they reach the maximum UPB limits that were established at loan origination. Performing repurchased loans are generally conveyed to HUD, and nonperforming repurchased loans are generally liquidated in accordance with program requirements.
Changes in fair value of loans and securities held for investment and related obligations include changes in fair value and related hedge gains and losses for the following: 1. Loans held for investment, subject to HMBS related obligations, at fair value; 2. Loans held for investment, subject to nonrecourse debt, at fair value; 83 3.
Changes in fair value of loans, retained bonds, and related obligations include changes in fair value and related hedge gains and losses for the following: 1. Loans held for investment, subject to HMBS related obligations, at fair value; 2. Loans held for investment, subject to nonrecourse debt, at fair value; 3. Loans held for investment, at fair value; 4.
Our Company is actively monitoring these events and their effects on the Company’s financial condition, liquidity, operations, industry, and workforce. These continuing economic impacts may cause additional volatility in the financial markets and may have an adverse effect on the Company’s results of future operations, financial position, intangible assets, and liquidity in 2025 and beyond. See Results of Operations.
Our Company is actively monitoring these events and their effects on the Company’s financial condition, liquidity, operations, industry, and workforce. These continuing economic impacts may cause additional volatility in the financial markets and may have an adverse effect on the Company’s results of future operations, financial condition, and liquidity in 2026 and beyond. See the Results of Operations section below.
FOA Equity may make distributions to its holders of Class A LLC Units, including FOA, in an amount sufficient to cover all applicable taxes at assumed tax rates, payments under the TRA, and dividends, if any, declared by FOA.
FOA has no independent means of generating revenue. FOA Equity may make distributions to its holders of Class A LLC Units, including FOA, in an amount sufficient to cover all applicable taxes at assumed tax rates, payments under the TRA obligation, and dividends, if any, declared by FOA.
Other Secured Lines of Credit As of December 31, 2024, we collectively had $524.9 million in additional secured facilities with $479.9 million aggregate principal amount drawn through credit agreements or master repurchase agreements with six funding facility arrangements and five active lenders. These facilities are secured by, among other things, eligible asset-backed securities, HECM MSR, and unsecuritized tails.
Other Secured Lines of Credit As of December 31, 2025, we collectively had $495.0 million in additional secured facilities with $450.3 million aggregate principal amount drawn through credit agreements or master repurchase agreements with six funding facility arrangements and five active lenders. These facilities are secured by, among other things, eligible asset-backed securities, HECM MSR, and unsecuritized tails.
The transactions provide us with access to liquidity for these assets, ongoing servicing fees, and potential residual returns for the residual securities we retain at the time of securitization.
The transactions provide investors with the ability to invest in these pools of assets. The transactions provide us with access to liquidity for these assets, ongoing servicing fees, and potential residual returns for the residual securities we retain at the time of securitization.
Under these facilities, we are generally required to comply with various customary operating and financial covenants. The financial covenants are similar to those under the warehouse lines of credit. The Company was in compliance with or has received waivers for all financial covenants as of December 31, 2024.
Under these facilities, we are generally required to comply with various customary operating and financial covenants. The financial covenants are similar to those under the warehouse lines of credit. The Company was in compliance with all financial covenants as of December 31, 2025.
(2) Tails consist of subsequent borrower draws, mortgage insurance premiums, service fees, and other advances, which we are able to subsequently securitize.
(2) Tails consist of subsequent borrower draws, mortgage insurance premiums, service fees, and other advances, which are added to the balance of the reverse mortgage loans and which we are able to subsequently securitize.
Loans held for investment, at fair value; 4. Retained bonds, at fair value; 5. MSR, at fair value; 6. HMBS related obligations, at fair value; and 7. Nonrecourse debt, at fair value.
Loans held for sale, at fair value; 5. Retained bonds, at fair value; 6. HMBS related obligations, at fair value; and 7. Nonrecourse debt, at fair value.
Compliance Requirements As an issuer of HMBS, FAR is subject to net worth, liquidity, and leverage requirements as established and defined by Ginnie Mae as follows: Minimum Net Worth • $5.0 million plus 1% of FAR’s outstanding HMBS and unused commitment authority from Ginnie Mae. • Tangible net worth is defined as total equity less goodwill, intangible assets, affiliate receivables, and certain pledged assets.
Compliance Requirements As an issuer of HMBS, FAR is subject to minimum net worth, liquidity, and leverage requirements as well as minimum insurance coverage established and defined by Ginnie Mae as follows: Minimum Net Worth • $5.0 million plus 1% of FAR’s outstanding HMBS and unused commitment authority from Ginnie Mae. • Adjusted net worth is defined as total equity less certain unacceptable assets, including affiliate receivables.
Senior Secured Notes The Senior Secured Notes will mature on November 30, 2026 (the “Scheduled Maturity Date”), provided that such Scheduled Maturity Date may be extended at the election of FOAF until November 30, 2027 (the “Extended Maturity Date”).
Senior Secured Notes In accordance with the amendments as described below, the Senior Secured Notes will mature on November 30, 2026 (the “Scheduled Maturity Date”), provided that such Scheduled Maturity Date may be extended at the election of FOAF until November 30, 2027 (the “Extended Maturity Date”).
Sources and Uses of Cash Our primary sources of funds for liquidity include: (i) payments received from the sale or securitization of loans; (ii) payments from the liquidation or securitization of our outstanding participating interests in loans; and (iii) advances on warehouse facilities, other secured borrowings, and our senior and working capital promissory notes.
Sources and Uses of Cash Our primary sources of funds for liquidity include: (i) payments received from the sale or securitization of loans; (ii) proceeds from payments on our outstanding participating interests in loans; and (iii) advances on warehouse facilities, other secured borrowings, our various notes, and other financing transactions.
The timing of the principal payments on this nonrecourse debt is dependent on the payments received on the underlying mortgage loans and liquidation of real estate owned properties. The outstanding principal balance of loans held for investment, subject to HMBS related obligations, was $17.7 billion as of December 31, 2024.
The timing of the principal payments on this nonrecourse debt depends on the payments received on the underlying mortgage loans and the liquidation of real estate owned properties. The outstanding principal balance of loans held for investment, subject to HMBS related obligations, was $18.0 billion as of December 31, 2025.
Refer to Note 6 - Fair Value in the Notes to Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques utilized to measure fair value. HMBS Related Obligations, at Fair Value We have elected to account for all outstanding HMBS related obligations at fair value.
Refer to Note 5 - Fair Value in the Notes to Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques utilized to measure fair value. HMBS Related Obligations, at Fair Value The Company elected the fair value option for all HMBS related obligations.
We are a leader in this market and we are focused on developing and offering products for borrowers with interest in using a reverse mortgage loan as a retirement planning tool, which we believe will continue to increase our addressable customer base and ultimately raise our origination volumes.
We are a leader in this market and we are focused on developing and offering products for borrowers with interest in using home equity-based financing solutions as retirement planning tools, which we believe will continue to increase our addressable customer base and ultimately raise our origination volumes.
Refer to Note 6 - Fair Value in the Notes to Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques utilized to measure fair value. Nonrecourse Debt, at Fair Value We have elected to account for all outstanding nonrecourse debt at fair value.
Refer to Note 5 - Fair Value in the Notes to Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques utilized to measure fair value. Nonrecourse Debt, at Fair Value The Company elected the fair value option for all nonrecourse debt.
Revenues generated on inter-segment services performed are valued based on estimated market value. Expenses directly attributable to the operating segments are expensed as incurred. Other expenses are allocated to individual segments based on the estimated value of services performed, total revenue contributions, personnel headcount, or the equity invested in each segment based on the type of expense allocated.
Expenses directly attributable to the operating segments are expensed as incurred. Other expenses are allocated to individual segments based on the estimated value of services performed, total revenue contributions, personnel headcount, or the equity invested in each segment based on the type of expense allocated. The allocation methodology is reviewed annually.
When we draw on these facilities, we generally must transfer and/or pledge eligible loans to the lender and comply with various financial and other covenants. The facilities generally have one-year terms and expire at various times during 2025 and 2026.
When we draw on these facilities, we generally must transfer and/or pledge eligible mortgage loans to the lender and comply with various financial and other covenants. The facilities generally have one-year maturity terms.
Non-funding interest expense, net Non-funding interest expense, net, includes our non-portfolio interest income and the interest expense associated with the Company’s non-funding debt. Refer to Note 21 - Interest Income and Interest Expense in the Notes to Consolidated Financial Statements for additional information.
Non-funding interest income (expense), net Non-funding interest income (expense), net, includes our non-portfolio interest income, the interest expense associated with the Company’s non-funding debt, and a gain on the exchange of our senior notes. Refer to Note 17 - Interest Income and Interest Expense in the Notes to Consolidated Financial Statements for additional information.
Changes in fair value of loans and securities held for investment and related obligations due to market inputs or model assumptions, deferred purchase price obligations, contingent earnout, warrant liability, minority investments, and the exchange of our senior notes. 3. Amortization or impairment of intangibles and impairment of certain other long-lived assets. 4.
Changes in fair value of loans, retained bonds, and related obligations due to market inputs or model assumptions, deferred purchase price liabilities, warrant liability, convertible notes, and the exchange of our senior notes. 3. Amortization or impairment of intangibles and impairment of certain other long-lived assets. 4.
Changes in fair value of loans and securities held for investment and related obligations due to market inputs or model assumptions, deferred purchase price obligations, contingent earnout, warrant liability, minority investments, and the exchange of our senior notes. 3. Amortization or impairment of intangibles and impairment of certain other long-lived assets. 4.
Changes in fair value of loans, retained bonds, and related obligations due to market inputs or model assumptions, deferred purchase price liabilities, warrant liability, convertible notes, and the exchange of our senior notes. 3. Amortization or impairment of intangibles and impairment of certain other long-lived assets. 4.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed7 unchanged
Biggest changeIn reality, changes in one factor may lead to changes in other factors, which could impact the hypothetical effects. 93 The following table summarizes the estimated change in the fair value of our significant assets and liabilities sensitive to interest rates as of December 31, 2024 (in thousands): December 31, 2024 Down 25 bps Up 25 bps Increase (decrease) in assets Loans held for investment, subject to HMBS related obligations $ 31,649 $ (31,580) Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 130,724 (128,008) Loans held for investment: Reverse mortgage loans 4,556 (4,465) Total assets $ 166,929 $ (164,053) Increase (decrease) in liabilities HMBS related obligations $ 27,273 $ (27,089) Nonrecourse debt 55,867 (67,435) Total liabilities $ 83,140 $ (94,524) 94
Biggest changeIn reality, changes in one factor may lead to changes in other factors, which could impact the hypothetical effects. 92 The following table presents the estimated change in the fair value of our significant assets and liabilities sensitive to interest rates as of December 31, 2025 (in thousands): Down 25 bps Up 25 bps Increase (decrease) in assets Loans held for investment, subject to HMBS related obligations $ 31,707 $ (31,608) Loans held for investment, subject to nonrecourse debt 148,931 (145,200) Loans held for investment 8,468 (8,249) Total assets $ 189,106 $ (185,057) Increase (decrease) in liabilities HMBS related obligations $ 27,280 $ (27,099) Nonrecourse debt 98,896 (99,021) Total liabilities $ 126,176 $ (126,120) 93
Refer to Note 6 - Fair Value in the Notes to Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques utilized to measure fair value. Our total market risk is impacted by a variety of other factors including market spreads and the liquidity of the markets.
Refer to Note 5 - Fair Value in the Notes to Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques utilized to measure fair value. Our total market risk is impacted by a variety of other factors including market spreads and the liquidity of the markets.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Our principal market risk is interest rate risk, primarily to changes in long-term Treasury rates and mortgage interest rates due to their impact on mortgage-related assets. Changes in short-term interest rates will also have an impact on our financing lines of credit.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Our principal market risk is interest rate risk, primarily to changes in long-term U.S. Treasury rates and mortgage interest rates due to their impact on mortgage-related assets. Changes in short-term interest rates will also have an impact on our financing lines of credit.

Other FOA 10-K year-over-year comparisons