Finance of America posts $35.2M Q1 profit as originations rise

Finance of America on Monday reported first-quarter net income of $35.2 million, swinging from a loss in the prior quarter as the reverse mortgage lender benefited from higher origination activity, improved operating leverage and gains tied to portfolio valuations.

The Plano, Texas-based company said it earned $1.93 per basic share for the quarter ended March 31, compared with a loss of $1.30 per share in the fourth quarter of 2025.

A year earlier, the company reported earnings of $3.17 per share.

Adjusted earnings were $1.10 per share, up from 69 cents in the previous quarter and 52 cents a year earlier. The company said adjusted earnings exceeded consensus analyst estimates.

Revenue totaled $120.1 million, up 62% from the fourth quarter but down 28% from the same period last year.

Funded loan volume increased 6% year over year to $596 million, though it declined 4% from the prior quarter. The company said volume accelerated during March as demand for home equity-based retirement products strengthened.

“From a production standpoint, we funded $596 million in the quarter, up 6% year-over-year,” said CEO Graham Fleming during the company’s earnings call.

In a separate statement, Fleming said, “The first quarter of 2026 was an outstanding quarter, with operational momentum in originations driving an acceleration in volumes and steady improvement in our financial results, liquidity, and capital position.”

During the call, Fleming addressed the pending PHH Mortgage Corp. deal, announced in November 2025. During Onity Group’s Tuesday earnings call, the parent company of PHH said it had revised its previously announced transaction with Finance of America and submitted the deal to Ginnie Mae for approval.

“Regarding the previously announced PHH transaction, the transaction has been modified to close in two distinct phases. The first phase, consisting of the origination, marketing of our products, and sub-servicing components, is expected to close in May,” Fleming told investors. “The second phase, which includes the purchase of HECM servicing rights, will follow as we continue to work with our primary regulator, Ginnie Mae, on the related approval.”

Performance by segment

Finance of America President Kristen Sieffert said first-quarter submissions — applications with completed supporting documentation — reached a record $918 million, up 20% from a year earlier.

“Submissions represent customers who’ve completed their application and provided all supporting paperwork,” Sieffert said. “They’re one of our clearest leading indicators of future funded volume and why we remain confident in our volume guidance.”

The company highlighted continued growth in proprietary reverse mortgage products, including its HomeSafe Second offering, which increased 32% year over year during the quarter. Finance of America also rolled out a new second-lien reverse mortgage line of credit product aimed at homeowners seeking to preserve low-rate first mortgages while accessing home equity.

Fleming said proprietary reverse mortgage products are expanding the addressable market beyond traditional government-insured HECMs by serving younger borrowers and offering higher balances and alternative structures.

“These proprietary products significantly expand the market by making reverse mortgages available to borrowers aged 55 and older in certain states, compared to age 62 for government-insured products,” Fleming said.

The company said Americans age 62 and older now hold about $14.6 trillion in home equity, which management views as a long-term growth opportunity for the reverse mortgage sector.

Finance of America’s retirement solutions segment, which includes its reverse mortgage origination business, generated $67 million in revenue, up 29% from a year earlier. Pretax income in the segment rose to $10 million from $3 million a year ago.

The company’s portfolio management segment posted pretax income of $36 million, compared with a $4 million loss in the previous quarter. Revenue in the segment rose to $66 million from $16 million in the fourth quarter, helped by improved portfolio economics and higher accreted yield.

Finance of America ended the quarter with $108 million in cash and cash equivalents, up 108% from a year earlier. Total equity increased 11% year over year to $438 million, while tangible equity rose 43% to $268 million.

The company also completed the repurchase of Blackstone’s equity interest in Finance of America in February.