Finance of America increased its retail reverse-mortgage fundings by 33% in the second quarter without expanding its sales capacity, according to results released Aug. 4.
The lender funded 1,268 retail loans during the quarter, up from 955 in the first quarter. Retail opportunities increased a comparatively modest 9%, while submissions rose 19%.
Funded loans per call-center loan originator climbed nearly 30% from the first quarter, according to the company’s earnings presentation.
“Historically, growth depended more heavily on generating additional top-of-funnel opportunities,” President Kristen Sieffert told analysts. “Now we’re demonstrating our ability to generate more production from the pipeline we already have.”
For reverse-mortgage originators, the results point to an increasingly important competitive divide. In a specialized market where borrower education and loan structure can lengthen the sales cycle, better conversion may matter as much as generating more leads.
Proprietary Products Gain Ground
Finance of America funded $730 million in reverse mortgages during the second quarter, up 22% from the first quarter and 21% from $602 million one year earlier.
Submission volume reached $1.02 billion, exceeding $1 billion for the first time since 2022. Submissions increased 11% sequentially and 19% year over year.
But the company’s product mix may be as significant as its overall production growth. Proprietary product submissions increased approximately 20% during the quarter, while proprietary fundings rose about 25%.
Sieffert said demand has recently favored proprietary products because they can provide more proceeds to some borrowers than a federally insured Home Equity Conversion Mortgage.
“We’ve seen growing demand for proprietary products recently, mostly as a function of the proprietary products offering better cash flow to the consumer,” Sieffert said. “It’s typically whatever is best suited for the customer is where that demand lands. And right now, that’s with the proprietary channel.”
The shift gives originators another reason to evaluate HECMs and private-label reverse products side by side rather than treating proprietary loans solely as alternatives for borrowers who do not meet HECM parameters.
Finance of America has been widening that product reach. In July, the lender expanded HomeSafe Second into four additional markets, bringing the second-lien reverse mortgage to 19 states and Washington, D.C.
The product allows qualifying homeowners to access equity without refinancing an existing first mortgage or adding a required monthly principal-and-interest payment. That proposition has become more relevant for older homeowners holding low-rate first mortgages.
Homeowners age 62 and older held a record $14.92 trillion in housing wealth during the first quarter, according to the National Reverse Mortgage Lenders Association and RiskSpan.
Retail Feeds Wholesale Growth
Finance of America is positioning retail and wholesale as complementary parts of the same origination platform.
Its retail channel gives the company direct access to homeowners and visibility into how borrowers move through the application process. Its national broker network then provides broader geographic distribution for the proprietary products developed from those insights.
“Together, they create multiple avenues for profitable growth while leveraging the same product platform and operating infrastructure,” Sieffert said.
Finance of America’s retail growth is also functioning as a product-development and conversion-testing operation. Products and sales processes proven through the direct channel can be extended to brokers without requiring the company to reproduce the underlying infrastructure.
Technology is central to that strategy. FOA said approximately 10,000 visitors used its digital prequalification engine in June, reaching its year-end monthly target six months early. Monthly prequalification offers increased nearly 90% from the first quarter, while the time required to move from prequalification to application improved approximately 57%.
Sieffert attributed the gains in originator productivity and the digital funnel to the company’s technology platform and AI-enabled tools, which FOA uses to identify borrower needs, match homeowners with products, and move files through origination.
Operating Growth, Accounting Loss
Finance of America’s underlying origination business improved even as market-related accounting adjustments pushed the company to a consolidated GAAP net loss of $29 million.
The company recorded $84 million in negative fair-value adjustments during the quarter. That included a $24 million adjustment tied to its convertible notes because FOA’s rising share price increased the recorded value of the associated liability.
Adjusted net income totaled $19 million, up from $14 million a year earlier, while adjusted EBITDA increased 17% to $35 million.
Within its Retirement Solutions segment, revenue rose 19% year over year to $74 million. The segment’s revenue margin remained relatively stable at 10.1%, and pretax income held at $10 million despite the higher production.
FOA did not translate its 21% volume growth into higher quarterly pretax income in the origination segment. Management said it continued spending more on personnel and marketing to support future production.
Interest-rate volatility also pressured expected execution on proprietary securitizations. Chief Financial Officer Matthew Engel said FOA does not always reprice its pipeline immediately when rates move sharply because doing so could disrupt borrowers, a choice that can create short-term margin volatility.
Onity Portfolio Becomes A Second Sales Funnel
FOA also completed its acquisition of the servicing rights to approximately 20,000 HECMs with $5.2 billion in unpaid principal balance from Onity Group on June 30. PHH Mortgage will continue subservicing the loans under a three-year agreement.
FOA said the acquired asset had a book value of approximately $70 million and is expected to generate a yield in the mid-teens during the second half of 2026.
But servicing income is only part of the strategy. The portfolio gives FOA relationships with roughly 20,000 additional reverse-mortgage borrowers who could potentially be evaluated for other home-equity products.
“The Onity transaction represents more than the acquisition of servicing assets,” CEO Graham Fleming said. “It diversifies our servicing footprint, broadens the population of homeowners we can serve, and creates additional opportunities to introduce our proprietary solutions to customers who may benefit from them.”
FOA generated $58 million in cash from originations and capital-markets activities during the quarter. Management said its next capital priority is retiring $150 million of senior secured notes in November, which it expects will lower financing costs and improve recurring earnings.
The company reaffirmed its full-year guidance of $2.8 billion to $3.1 billion in funded volume and adjusted earnings of $4.50 to $5 per share.
For originators, however, the more immediate takeaway is operational: FOA’s quarter was not built simply on more reverse-mortgage demand. It was built on converting more of that demand, directing more borrowers toward proprietary products, and using retail, wholesale, technology, and servicing as interconnected sources of production.
