Finance Of America Acquires AAG

Plano, Texas-based Finance of America Companies Inc. (FOA) said Monday it closed March 31 on its previously announced deal to acquire the assets of American Advisors Group (AAG), a direct-to-consumer reverse mortgage lender. 

FOA also announced changes in its executive suite, naming Graham A. Fleming as its chief executive officer and promoting Finance of America Reverse (FAR) President Kristen Sieffert to president of FOA. Both changes take effect April 5.

In a news release, FOA said the acquisition and C-suite changes herald “a new chapter in the company’s strategy to create a retirement solutions platform that helps older homeowners achieve financial goals in retirement.”

According to terms of the deal disclosed in documents filed Monday with the Securities and Exchange Commission, FOA and AAG agreed to reduce the cash considerations to $5.5 million from the $10 million set in the original purchase agreement. Under the new agreement, FAR will also issue to AAG “a promissory note with an aggregate principal amount of $4.5 million.

The acquisition is expected to be immediately accretive to tangible book value and earnings, FOA said.

AAG will continue to operate, but as a part of Finance of America, the companies said. A majority of AAG employees will remain with the company, which conducted three rounds of layoffs last year.

FOA is one of the largest reverse mortgage lenders in the U.S., while AAG is the top provider of home equity conversion loans (HECMs), according to Reverse Market Insight.. 

In announcing the completed acquisition, FOA said its board of directors chose Fleming and Seiffert to “drive the company’s strategic vision.”

Fleming is a 25-year veteran of the mortgage industry. He joined Finance of America in 2013 and served as president from late 2020 until he was named interim CEO in June 2022. 

Sieffert has nearly 20 years of experience in the reverse mortgage channel and has served as president of Finance of America Reverse since 2015. FOA credited her with ushering in FAR’s “industry-leading suite of proprietary products designed to fill gaps in the marketplace and meet the demands of today’s borrowers.”

The FOA platform includes options to finance aging in place, as well as “an expanding suite of solutions designed to support a thriving later life and bring enhanced quality and dignity to retirees in various aspects of their lives in and out of the home,” the company said.

This includes home improvement and remodeling, homesharing, and the core reverse mortgage business that provides access to home equity, it said. 

With the AAG acquisition, FOA is now one of the largest reverse mortgage lenders in the U.S. The acquisition adds a direct-to-consumer retail channel whose advertising reaches more than 10 million consumers annually, the company said. 

FOA said the transaction highlights its strategic vision “to become the preeminent destination for Americans who can benefit from a modern, enhanced retirement approach that centers on unlocking the potential of the home to deliver an incredible array of advantages.”

Fleming said he is proud to lead FOA “as we bring a differentiated offering to the industry that will help even more Americans embrace a modern retirement and understand the value and benefits of home equity.”

He continued, “We have long been the largest provider of proprietary reverse products and a leader in education for the industry. Our recent acquisition adds a new direct-to-consumer channel to our capabilities and expands our reach to millions of consumers.”

“I am excited to work with so many talented individuals focused on helping Americans live well, longer,” Seiffert added. “We believe the home can act as a shelter and a springboard for today’s modern retirees to achieve their goals and thrive. By making the home the centerpiece of longevity and retirement, Finance of America is committed to becoming a lifelong resource that empowers customers with innovative tools to build a remarkable, fulfilled and most importantly, sustainable financial future.”