Key Points
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Funded volume grew: Finance of America funded $748 million in Q3, up 24% year over year, with year-to-date production up 17%. Retail productivity improved, and digital activity and wholesale submissions also increased.
Higher rates pressured margins and GAAP results: Retirement Solutions’ revenue margin fell to 9%, while non-cash fair-value changes contributed to a $130 million GAAP pre-tax loss. Adjusted net income was $6 million, or $0.28 per share.
Outlook reflects near-term pressure and a 2027 recovery: The company withdrew its 2026 adjusted EPS guidance but expects 2027 funded volume of $3.1 billion to $3.4 billion and a second-half adjusted EPS run rate of about $4 to $5.
Finance of America Companies (NYSE:FOA) reported higher third-quarter funded volume and improved retail productivity, while rising interest rates pressured revenue margins and contributed to a GAAP pre-tax loss driven largely by non-cash fair-value changes.
Chief Executive Officer Graham Fleming said the company funded $748 million during the quarter, up from $730 million in the second quarter and $603 million a year earlier. Year-to-date production through September was about $2.1 billion, compared with $1.8 billion in the first nine months of 2025, representing 17% year-over-year growth.
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“Our volume this quarter grew 24% year-over-year,” Fleming said, adding that the company expects continued growth in 2027 and beyond based on demographic trends and product development.
Rising Rates Pressure Margins and Valuations
The company said the third quarter’s interest-rate environment created pressure on both portfolio valuations and origination economics. Fleming said 10-year Treasury yields rose more than 75 basis points during the period amid the Federal Reserve’s shift from cutting rates to raising them and continued elevated inflation.
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Finance of America recorded $167 million of unfavorable non-cash fair-value changes on portfolio assets and liabilities during the first nine months of 2026. That compared with $161 million in positive fair-value changes during the same period of 2025. Fleming characterized the impact primarily as a discount-rate effect rather than a change in expected cash flows from the assets.
Revenue margin in the company’s Retirement Solutions segment fell to 9% in the third quarter, from 11.3% in the prior-year quarter and below its historical average of 10.7% since the beginning of 2024.
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Fleming said higher rates made it harder to reprice customers already in the company’s pipeline, putting near-term pressure on margins and inventory. The company made product and pricing changes during October, including adjustments to loan-to-value ratios and interest rates, and expects margins to return to historical levels during the first half of 2027.
“We’re agnostic to the interest rate environment,” Fleming said during the question-and-answer session. “We’ll adjust our products, our rates, and our LTVs to yield the revenue margin, the historical revenue margin that we’ve had.”
GAAP Loss, Positive Adjusted Earnings and Cash Generation
Chief Financial Officer Matt Engel said Finance of America recognized a GAAP pre-tax loss of $130 million during the quarter, primarily reflecting non-cash fair-value changes on residual assets. The loss was partly offset by a reduction in the fair-value liability associated with the company’s convertible notes.
Adjusted net income totaled $6 million, or $0.28 per share. Engel said lower Retirement Solutions revenue margins were the main driver of reduced adjusted earnings.
Portfolio Management generated $11 million in adjusted net income despite lower fair values, according to Engel. The portfolio continued to accrue a yield in the mid-teens against retained beneficial interests of about $500 million.
Finance of America generated $33 million of cash during the quarter and $145 million year to date from originations and capital-markets activities. Cash and cash equivalents were $118 million as of Sept. 30.
The company used cash generated during the year for capital actions including the repurchase of Blackstone’s remaining equity position and the acquisition of Onity’s HECM servicing portfolio. It also plans to repay $60 million of senior secured notes during November and extend the maturity of approximately $90 million of remaining notes to November 2027.
Engel said the company expects cash generated from operations, call-and-reissue activity on prior securitizations, and potential financing of its HECM mortgage servicing rights asset to support repayment of the remaining $90 million.
Retail Productivity and Digital Activity Increase
President Kristen Sieffert said the company’s retail channel funded $303 million during the quarter, up 11% sequentially and 54% from a year earlier. Production per loan officer averaged $1.2 million per month, increasing nearly 9% from the second quarter and more than 40% year over year.
Retail headcount was essentially unchanged from a year earlier, Sieffert said, indicating the productivity improvement was not solely the result of a reduced workforce. The company deliberately shifted its retail strategy toward higher-quality opportunities, with opportunities declining 12% from the second quarter while submissions remained steady and funded loans rose 9%.
Wholesale remained the company’s largest channel, accounting for nearly 60% of funded volume. The channel funded $444 million in the third quarter, up 10% from a year earlier, while submissions reached $625 million, the highest level in seven quarters.
HECM volume increased 14% year over year.
HomeSafe first-lien volume increased 15% year over year.
HomeSafe Second volume increased 63% year over year.
Prequalification starts rose 89% in the third quarter.
Digital opportunities increased 61%, while lead-to-application time declined to less than six days from roughly 20 days.
Sieffert said Finance of America expects to launch a line-of-credit version of HomeSafe Second soon and plans additional product-suite expansion next year. The company also expects a new website in the first half of 2027 to support further funnel conversion improvements.
2026 and 2027 Outlook
Finance of America expects to reach the low end of its prior 2026 funded-volume guidance range of $2.8 billion to $3.1 billion. However, the company withdrew its prior full-year adjusted earnings-per-share guidance of $4.50 to $5.00 because of third-quarter margin compression and the time required for product changes to move through its pipeline.
Engel said fourth-quarter adjusted earnings are expected to approximate third-quarter results. For 2027, the company expects funded volume of $3.1 billion to $3.4 billion, supported by demographics, product breadth and conversion improvements.
The company expects an annualized adjusted EPS run rate of approximately $4.00 to $5.00 during the second half of 2027, driven by higher volumes and normalized margins, partly offset by lower Portfolio Management earnings resulting from higher discount rates.
Fleming said potential share repurchases and dividends could become “likely outcomes” after the company retires its remaining $90 million of unsecured debt.
About Finance of America Companies (NYSE:FOA)
Finance of America Companies Inc (NYSE:FOA) is a financial services company focused on helping homeowners access and manage home equity. Its primary business is conducted through Finance of America Reverse, which provides reverse mortgage products and related services to older homeowners.
The company offers federally insured Home Equity Conversion Mortgages (HECMs), proprietary reverse mortgage products and reverse mortgage refinancing solutions. These products generally allow eligible homeowners to convert a portion of their home equity into funds while continuing to live in their homes, subject to applicable loan terms, taxes, insurance and maintenance requirements.
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The article “What Finance of America Companies (FOA) Said on Its Q3 Earnings Call” was originally published by MarketBeat.
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