Finance of America Companies Inc. (FOA) told federal regulators Tuesday it plans to sell certain “operational assets” of Finance of America Commercial (FACO) to Roc Capital Holdings LLC.
The deal was announced in a filing with the Securities and Exchange Commission.
Under terms of the deal, Roc Capital, also known as Roc360, will pay up to $30 million over a three-year period, with the total to be determined based on the performance of the purchased assets, according to the SEC filing.
The deal is subject to certain customary conditions, FAO said, and includes the right for either party to terminate it on June 1, 2023, “if the transactions contemplated thereby have not yet closed.” The transaction is expected to close in the first quarter of 2023, the company said.
FAO also said the deal does not include “FACO’s financial assets as of closing comprised of loans and securitization assets, which will continue to be sold or otherwise paid in full or liquidated in the ordinary course of business.”
It added that, following the closing of the transaction, Finance of America Mortgage (FAM) “will no longer operate in the business of originating business purpose loans to residential real estate investors. Upon closing of the FACO transaction, the company will no longer have a reportable commercial originations segment.”
Roc360 is a New York City-based vertically integrated digital platform for residential real estate investors. Its brands include direct lender Haus Lending, as well as Wimba Title, a title insurance company, and Tamarisk Appraisal, an appraisal management company.
Eric Abramovich, the co-founder of Roc Holdings, said FACO will join its other brands.
"Upon closing of the transaction, we do intend for Finance of America Commercial to be a subsidiary of Roc360, just like many of our other platform companies and brands," he said, adding that Roc Holdings would have more to say about the deal once it closes.
FOA issued a news release about the deal that included a statement from Interim CEO Graham A. Fleming, who described the deal as “another step taken by the company as it executes on its long-term strategy.”
Fleming continued, “By streamlining our focus and growing our core businesses, which benefit from a shared set of demographic and economic tailwinds, FOA can more effectively dispatch our innovative suite of solutions to help Americans achieve their retirement goals through the use of home equity.”
The announcement comes four months after FOA told the SEC in October 2022 it would close Finance of America Mortgage, its retail mortgage division, following the reported demise of a deal to sell it to Guaranteed Rate.
In a notice filed with the SEC dated Oct. 20, 2022, the company said its board of directors had authorized a plan to “discontinue the operations of the company’s mortgage originations segment, other than its home improvement channel.”
At the time, FOA stated that closing its retail channel would allow it to implement what it called a “Resource Optimization Plan,” in which it would “strategically optimize and invest” in its reverse mortgage and commercial mortgage originations segments, as well as its lender services and portfolio management segments.
Fleming said in October that closing the forward mortgage origination segment “will allow FOA to optimize its resources and prioritize businesses that have a distinct market opportunity and greater growth potential.”
The sale of its commercial lending business follows FOA’s announcement on Feb. 2 that its subsidiary, Incenter LLC, would sell Agents National Title Holding Co. and Boston National Holdings LLC to Essent Group Ltd. for $100 million.
Agents National Title, based in Missouri, is a title insurance underwriter with 44 state licenses, and issues title insurance products through a network of title insurance agents. Boston National Title is an independent title agency based in North Carolina that provides title and settlement services, with licenses in 40 states and the District of Columbia.
The closing of that transaction is subject to regulatory approvals.
