FOA reverse volume up 21% as home equity demand expands

Finance of America grew its reverse mortgage business significantly in the second quarter, despite posting a $29 million loss during the period.

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Funded volume increased 21% year over year to $730 million for the Texas-based reverse mortgage company, meanwhile its net income fell 136% from $80 million in the second quarter of last year, although that doesn’t tell the whole story, the lender said on an earnings call Tuesday.

On an adjusted basis, FOA totaled a net income of $19 million, or $0.84 per share, still well below the S&P Capital IQ Pro consensus estimate of $1.10 per share. The difference primarily reflects non-cash fair value adjustments, combined with one-time impacts during the quarter. The company recorded $84 million of negative fair value adjustments in the period, Chief Financial Officer Matt Engel said on the call.

“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,” CEO Graham Fleming said on the call. “Demand is strengthening, conversion and sales productivity are improving and our proprietary products are expanding the ways we can serve older homeowners.”

Revenue fell 48% quarter over quarter 65% year over year to $62 million, according to the earnings report.

FOA’s retirement solutions produced $15 million in adjusted net income, up slightly from $14 million last quarter and consistent with the same period a year ago. Submission volume exceeded $1 billion for the first time since 2022, even in a rising rate environment, according to the report.

Its portfolio management generated $18 million in adjusted net income, down 26% from the first quarter but up 13% year over year. FOA also completed the acquisition of Onity’s servicing portfolio for $5.2 billion in June.

The lender launched a new reverse mortgage line of credit during the quarter as well. HomeSafe Second Line of Credit allows homeowners 55 and older to draw funds as needed after an initial draw of 25% at time of origination. The product preserves the borrower’s first mortgage, and its potentially lower rate, without requiring the new monthly payments of a traditional home equity line of credit, the company said in a press release. 

The line of credit is currently only available in California, while HomeSafe Second is now available in 19 states and Washington, D.C., FOA announced last month.

FOA’s future outlook

For the rest of 2026, FOA expects demand growth in its reverse mortgage business and a stable yield from its expanding portfolio. It reaffirmed its full-year guidance for origination volumes at $2.8 billion to $3.1 billion and adjusted earnings per share at $4.50 to $5.

The lender hopes to retire the remaining $150 million of its senior secured notes this November, which will reduce nonfunding debt, lower financing costs and improve recurring earnings, Engel said. 

“We believe Finance of America is well positioned to capture the long-term opportunity in home equity and create durable shareholder value,” Fleming said.