Finance Of America Posted It’s 4th Straight Quarterly Loss. Is The Slowly Imploding Finance of America Going The Way Of The Dinosaurs?
Finance of America posted its fourth consecutive quarterly loss on Wednesday. The company had already announced it was working toward closing its forward mortgage origination business.
Finance of America posted a net loss of $302 million. This equates to $1.35 per diluted share. This is almost double the $168 million or 70 cents per diluted share from the second quarter.
FOA’s last profitable quarter was over a year ago. In June 2021, the company posted a net income of $50 million.
The company announced in October that it will close Finance of America Mortgage LLC. FOA Mortgage was its retail mortgage division. The company also announced it was shutting down its forward wholesale channel.
FOA said the mortgage originations segment reported revenue of $61 million for the third quarter. This is down 41% from $103 million in the second quarter.
FOA also expects costs related to the shutdown of FOA Mortgage to total between $145 million and $165 million. This also includes $130 million to $138 million in noncash expenses. He added that $129 million of the overall shutdown costs were incurred during the third quarter.
FOA also expects to incur cash expenses totaling between $15 million and $26 million related to the shutdown,
The company stated that Finance of America Reverse entered into an agreement with Morningstar to become its first reverse mortgage education provider. FAR’s educational tools are available to 150,000 financial advisors nationwide through Morningstar Advisor Workstation.
The reverse originations segment generates revenue from fees earned on the origination of reverse mortgage loans. The segment’s third-quarter revenue of $72 million was also down 10% from the second quarter.
The company funded $1.14 billion in reverse mortgage volume in the quarter. This is also down 28% from the second quarter.