Layla Zulfa
Finance of America Companies Inc. (FOA) announced a robust 21% year-over-year increase in its reverse mortgage and home equity funding volume for the second quarter of 2026, reaching $730 million. This growth occurred even as the company reported a net loss of $29 million for the period from April through June, primarily driven by non-cash fair value adjustments within its portfolio business. The Texas-based lender’s performance reflects a strategic push in its core origination segments, juxtaposed with the volatility inherent in its portfolio management activities.
The reported funded volume of $730 million for the quarter ending June 30, 2026, marks a significant uptick from the $602 million recorded in the corresponding period of 2025. This upward trajectory extended to the first half of the year, with total funded volume reaching $1.33 billion, an increase of 14% from $1.16 billion in the first half of 2025. This sustained growth underscores the company’s expanding market presence in key retirement-focused lending products.
Despite the impressive origination figures, FOA’s reported net income presented a mixed picture. The company posted basic earnings per share of $0.10, translating to $1 million in net income attributable to Class A common shareholders for the quarter. However, on a diluted basis, the company reported a loss of $1.28 per share, or a $29 million net loss. This discrepancy is directly attributable to the impact of non-cash fair value adjustments on its portfolio holdings, a factor that requires careful consideration when evaluating the company’s overall financial health.
On an adjusted basis, Finance of America Companies presented a more optimistic financial outlook. The company reported adjusted earnings per share of $0.84, or $19 million in adjusted net income, signifying a substantial 53% year-over-year improvement. Furthermore, adjusted EBITDA for the quarter reached $35 million, contributing to a first-half adjusted EBITDA of $79 million. These adjusted figures suggest that the company’s core operational performance and profitability remain strong, despite the accounting impacts on its balance sheet.
Graham Fleming, CEO of Finance of America Companies, expressed confidence in the company’s strategic direction, stating, "The second quarter of 2026 reinforced what we’ve been communicating over the past several quarters: that the operational improvements and investments we have made are now translating into a stronger, more scalable business." Fleming attributed this positive momentum to a confluence of factors, including strengthening demand for the company’s products, improved conversion rates and sales productivity, and a notable growth in proprietary solutions designed to serve the specific financial needs of older homeowners. These proprietary offerings, often tailored to the unique circumstances of seniors, are becoming increasingly crucial in a market segment characterized by evolving consumer preferences and regulatory landscapes.
Retirement Solutions Segment Drives Origination Growth
The bedrock of Finance of America’s recent performance lies within its Retirement Solutions segment, which encompasses the origination of reverse mortgages and other home equity-focused financial products. This segment continued its impressive growth trajectory, with second-quarter funded volume rising 21% year over year to $730 million. This performance is particularly noteworthy given the competitive nature of the reverse mortgage market and the increasing demand for financial products that enable seniors to leverage their home equity.
Total revenue within the Retirement Solutions segment saw a healthy increase of 19% from the prior year, reaching $74 million. The company reported that its revenue margins remained stable, hovering near 10.1%, indicating efficient operational management and pricing strategies. Pretax income for the segment stood at $10 million for the quarter, which, while flat compared to the same period in 2025, demonstrates a consistent level of profitability. On an adjusted net income basis, the segment also mirrored the prior year’s performance, reporting $15 million.
Looking at the first half of 2026, the Retirement Solutions segment exhibited even stronger growth in profitability. Pretax income for the first six months of the year climbed 43% year over year to $20 million, while adjusted net income saw a 21% increase, reaching $29 million. This sustained improvement in profitability over a longer period highlights the segment’s increasing contribution to the company’s overall financial success. The focus on proprietary products and enhancements in sales processes appear to be yielding tangible results, positioning FOA to capitalize on the growing retirement finance market.
Portfolio Management Segment Faces Valuation Headwinds
In contrast to the robust performance of its origination business, Finance of America’s Portfolio Management segment experienced a significant swing in its financial results, primarily due to valuation adjustments. This segment is responsible for generating net interest income and managing fair value changes on portfolio assets, including securitized reverse mortgage collateral. During the second quarter of 2026, the segment reported a pretax loss of $26 million. This stands in stark contrast to the pretax profit of $108 million recorded in the second quarter of 2025 and a $36 million profit in the first quarter of 2026.
The company attributed this quarterly loss predominantly to negative non-cash fair value adjustments on retained interests in securitizations. These adjustments, while not impacting the company’s cash flow in the short term, reflect changes in the market valuation of certain assets. These negative impacts were partially offset by higher accreted yields on residual interests, which represent the residual economic rights in securitized assets after senior tranches have been paid.
Despite the quarterly loss, the year-to-date performance of the Portfolio Management segment showed resilience. Adjusted net income for the first half of 2026 improved by 24% compared to the same period in 2025, reaching $46 million, up from $37 million. However, total segment revenue for the quarter experienced a substantial decline, falling to $1 million from $130 million in the second quarter of 2025. This sharp decrease in revenue is a direct consequence of the valuation adjustments and the nature of the segment’s revenue streams, which can be highly sensitive to market conditions and accounting methodologies.
Balance Sheet Strength and Servicing Expansion
Finance of America Companies demonstrated a strengthening cash position as of June 30, 2026, reporting $85 million in cash and cash equivalents. This represents an impressive 85% increase from the $46 million held a year earlier, although it was down from $108 million at the end of March. The company indicated that strong cash generation from its origination activities and capital markets operations was instrumental in funding a significant portion of its recently completed acquisition of Onity Mortgage Corp.’s servicing portfolio of Home Equity Conversion Mortgages (HECMs).
The company’s total assets also saw substantial growth, rising 24% year over year to $37.3 billion. This expansion was largely driven by an increase in securitized loans held for investment, particularly those tied to HECM and other nonrecourse obligations, which grew by 25% to $36 billion. Assets under management within the Portfolio Management segment mirrored this trend, climbing 24% year over year to $37 billion. This growth in assets under management is a testament to the company’s expanding footprint in the servicing of reverse mortgage loans.
Total equity stood at $407 million at the close of the second quarter of 2026, a decrease from $473 million recorded a year prior. Equity attributable to common stock was $297 million, resulting in a book value of $33.20 per common share. Tangible equity, a measure that excludes intangible assets, totaled $246 million, or $13.31 per share. These figures provide a snapshot of the company’s equity position and its underlying asset values.
Strategic Acquisitions and Future Outlook
The acquisition of Onity Mortgage Corp.’s servicing portfolio, which closed on July 1, 2026, represents a significant strategic move for Finance of America Companies. Company leaders elaborated on the implications of this acquisition during the earnings call. Graham Fleming highlighted the strength of the company’s cash generation in the quarter as a key enabler for strategic investments. He stated, "The Onity transaction represents more than the acquisition of servicing assets. It diversifies our servicing footprint, broadens the population of homeowners we can serve, and creates additional opportunities to introduce our proprietary solutions."
Fleming further disclosed that the transaction included approximately 13 staff members from Onity, encompassing both origination and operations personnel, who have been integrated into FOA. The acquired assets carried a book value of roughly $70 million, with expectations of earning yields in the mid-teens. This move to diversify its subservicing platform, which now includes partnerships with Celink and Onity, is viewed as beneficial for both FOA and the broader industry, aiming to deliver best-in-class service to consumers.
Kristen Sieffert, President of Finance of America Companies, echoed the positive sentiment regarding the growing opportunity to serve senior homeowners. She pointed out that this demographic holds nearly $15 trillion in home equity and constitutes a significant portion of current homebuyers and sellers. Sieffert expressed increased confidence in the company’s strategic direction, stating, "Last quarter, I said we were reaching an inflection point in the platform. The second quarter gives us greater confidence in that view." She emphasized a shift from solely relying on generating new top-of-funnel opportunities to enhancing production from the existing pipeline, indicating improved efficiency and conversion capabilities.
Sieffert also addressed the rising demand for private-label reverse mortgages. She noted that these proprietary products often offer superior cash flow benefits to consumers, driving demand towards channels that best suit individual customer needs. "Whatever is best suited for the customer is where that demand lands, and right now that’s with the proprietary channel," Sieffert remarked.
Looking ahead, Sieffert conveyed optimism about the market opportunity, describing it as large and underpenetrated. She concluded by stating, "The market opportunity ahead of us is still large and underpenetrated, but the real story this quarter is conviction. We’re building a stronger, more valuable business, not simply a bigger one." This statement suggests a focus on sustainable growth and value creation, rather than purely on expanding scale. The company’s strategic initiatives, including the expansion of its servicing capabilities and the continued development of proprietary products, position it to navigate the evolving landscape of the retirement finance market effectively. The ability to manage the volatility of its portfolio business while capitalizing on the growing demand for reverse mortgages and home equity solutions will be critical for Finance of America Companies in the coming quarters.
