Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 06, 2024 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-40308 | |
Entity Registrant Name | FINANCE OF AMERICA COMPANIES INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-3474065 | |
Entity Address, Address Line One | 5830 Granite Parkway | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Plano | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75024 | |
City Area Code | 877 | |
Local Phone Number | 202-2666 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Central Index Key | 0001828937 | |
Common Class A | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Class A Common Stock, par value $0.0001 per share | |
Trading Symbol | FOA | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding | 98,809,099 | |
Warrants to Purchase | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Warrants to purchase shares of Class A Common Stock | |
Trading Symbol | FOA.WS | |
Security Exchange Name | NYSE | |
Common Class B | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 15 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | |
ASSETS | |||
Cash and cash equivalents | $ 48,229 | [1] | $ 46,482 |
Restricted cash | 195,349 | [1] | 178,319 |
Loans held for investment, subject to Home Equity Conversion Mortgage-Backed Securities (“HMBS”) related obligations, at fair value | 18,050,772 | 17,548,763 | |
Loans held for investment, subject to nonrecourse debt, at fair value | 8,407,602 | 8,272,393 | |
Loans held for investment, at fair value | 535,910 | 575,228 | |
Intangible assets, net | 244,233 | 253,531 | |
Other assets, net | 194,183 | 226,153 | |
Assets of discontinued operations | 7,290 | 6,721 | |
TOTAL ASSETS | 27,683,568 | 27,107,590 | |
LIABILITIES AND EQUITY | |||
HMBS related obligations, at fair value | 17,827,060 | 17,353,720 | |
Nonrecourse debt, at fair value | 7,897,896 | 7,904,200 | |
Other financing lines of credit | 1,071,191 | 928,479 | |
Notes payable, carrying value | 436,193 | 410,911 | |
Payables and other liabilities | 174,858 | 219,569 | |
Liabilities of discontinued operations | 20,647 | 18,304 | |
TOTAL LIABILITIES | 27,427,845 | 26,835,183 | |
Commitments and Contingencies (Note 13) | |||
EQUITY (Note 19) | |||
Additional paid-in capital | 950,588 | 946,929 | |
Accumulated deficit | (721,921) | (714,383) | |
Accumulated other comprehensive loss | (266) | (249) | |
Noncontrolling interest | 27,312 | 40,100 | |
TOTAL EQUITY | 255,723 | 272,407 | |
TOTAL LIABILITIES AND EQUITY | 27,683,568 | 27,107,590 | |
Common Class A | |||
EQUITY (Note 19) | |||
Common stock, value | 10 | 10 | |
Common Class B | |||
EQUITY (Note 19) | |||
Common stock, value | $ 0 | $ 0 | |
[1] (1) Amounts presented contain results from both continuing and discontinued operations. Refer to Note 4 - Discontinued Operations for additional information regarding cash flow associated with the results of discontinued operations. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Condition - Parenthetical - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Notes payable, related party amount | $ 436,193 | $ 410,911 |
Working Capital Promissory Notes | Related Party | ||
Notes payable, related party amount | $ 84,630 | $ 59,130 |
Common Class A | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 6,000,000,000 | 6,000,000,000 |
Common stock, shares issued (in shares) | 100,820,259 | 100,599,241 |
Common stock, shares outstanding (in shares) | 96,561,759 | 96,340,741 |
Common Class B | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, shares issued (in shares) | 15 | 15 |
Common stock, shares outstanding (in shares) | 15 | 15 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Financial Condition - Variable Interest Entities - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | |
Restricted cash | $ 195,349 | [1] | $ 178,319 |
Loans held for investment, subject to nonrecourse debt, at fair value | 8,407,602 | 8,272,393 | |
TOTAL ASSETS | 27,683,568 | 27,107,590 | |
Nonrecourse debt, at fair value | 7,897,896 | 7,904,200 | |
TOTAL LIABILITIES | 27,427,845 | 26,835,183 | |
Variable Interest Entity, Primary Beneficiary | |||
Restricted cash | 183,490 | 168,010 | |
Loans held for investment, subject to nonrecourse debt, at fair value | 8,026,026 | 7,881,566 | |
Other assets, net | 56,386 | 68,178 | |
TOTAL ASSETS | 8,265,902 | 8,117,754 | |
Nonrecourse debt, at fair value | 7,536,990 | 7,531,412 | |
Payables and other liabilities | 501 | 546 | |
TOTAL LIABILITIES | 7,537,491 | 7,531,958 | |
NET CARRYING VALUE OF ASSETS SUBJECT TO NONRECOURSE DEBT | $ 728,411 | $ 585,796 | |
[1] (1) Amounts presented contain results from both continuing and discontinued operations. Refer to Note 4 - Discontinued Operations for additional information regarding cash flow associated with the results of discontinued operations. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
REVENUES | |||
Net fair value gains on loans and related obligations | $ 92,635 | $ 176,394 | |
Fee income | 6,236 | 6,352 | |
Gain (loss) on sale and other income from loans held for sale, net | 86 | (12,426) | |
Net interest expense: | |||
Interest income | 4,266 | 2,091 | |
Interest expense | (28,541) | (31,556) | |
Net interest expense | (24,275) | (29,465) | |
TOTAL REVENUES | 74,682 | 140,855 | |
EXPENSES | |||
Salaries, benefits, and related expenses | 39,023 | 40,814 | |
Loan portfolio expenses | 8,613 | 7,992 | |
Loan servicing expenses | 8,218 | 6,636 | |
Marketing and advertising expenses | 8,512 | 1,956 | |
Depreciation and amortization | 9,678 | 10,105 | |
General and administrative expenses | 17,271 | 16,274 | |
TOTAL EXPENSES | 91,315 | 83,777 | |
IMPAIRMENT OF OTHER ASSETS | (600) | 0 | |
OTHER, NET | 1,453 | 936 | |
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (15,780) | 58,014 | |
Provision for income taxes from continuing operations | 0 | 2,532 | |
NET INCOME (LOSS) FROM CONTINUING OPERATIONS | (15,780) | 55,482 | |
NET LOSS FROM DISCONTINUED OPERATIONS | (4,524) | (40,890) | |
NET INCOME (LOSS) | [1] | (20,304) | 14,592 |
Net income (loss) from continuing operations attributable to noncontrolling interest | (10,145) | 36,755 | |
Net loss from discontinued operations attributable to noncontrolling interest | (2,621) | (25,217) | |
NET INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO CONTROLLING INTEREST | (5,635) | 18,727 | |
NET LOSS FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO CONTROLLING INTEREST | (1,903) | (15,673) | |
NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST | $ (7,538) | $ 3,054 | |
EARNINGS PER SHARE (Note 18) | |||
Basic weighted average shares outstanding (in shares) | 96,485,585 | 64,016,845 | |
Basic net income (loss) per share from continuing operations (in USD per share) | $ (0.06) | $ 0.29 | |
Basic net income (loss) per share (in usd per share) | $ (0.08) | $ 0.05 | |
Diluted weighted average shares outstanding (in shares) | 96,485,585 | 190,301,012 | |
Diluted net income (loss) per share from continuing operations (in usd per share) | $ (0.06) | $ 0.22 | |
Diluted net income (loss) per share (in USD per share) | $ (0.08) | $ 0.07 | |
[1] (1) Amounts presented contain results from both continuing and discontinued operations. Refer to Note 4 - Discontinued Operations for additional information regarding cash flow associated with the results of discontinued operations. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Statement of Comprehensive Income [Abstract] | |||
NET INCOME (LOSS) | [1] | $ (20,304) | $ 14,592 |
COMPREHENSIVE INCOME ITEM: | |||
Impact of foreign currency translation adjustment | (17) | 64 | |
TOTAL COMPREHENSIVE INCOME (LOSS) | (20,321) | 14,656 | |
Less: Comprehensive income (loss) attributable to noncontrolling interest | (10) | 11,580 | |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST | $ (20,311) | $ 3,076 | |
[1] (1) Amounts presented contain results from both continuing and discontinued operations. Refer to Note 4 - Discontinued Operations for additional information regarding cash flow associated with the results of discontinued operations. |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock Common Class A | Common Stock Common Class B | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | |
Beginning balance (in shares) at Dec. 31, 2022 | 63,423,356 | 14 | 124,453,301 | |||||
Beginning balance at Dec. 31, 2022 | $ 404,841 | $ 6 | $ 0 | $ 888,488 | $ (634,295) | $ (273) | $ 150,915 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 14,592 | [1] | 3,054 | $ 11,538 | ||||
Equity-based compensation, net | 8,109 | 8,109 | ||||||
Conversion of LLC Units for Class A Common Stock (Note 19 - Equity) (in shares) | 3,601 | (3,601) | ||||||
Conversion of LLC Units for Class A Common Stock (Note 19 - Equity) | 0 | 4 | $ (4) | |||||
Settlement of long-term incentive plan (“LTIP”) restricted stock units (“RSUs”), net (Note 19 - Equity) (in shares) | 582,698 | (582,698) | ||||||
Settlement of long-term incentive plan (“LTIP”) restricted stock units (“RSUs”), net (Note 19 - Equity) | 91 | $ 1 | 748 | $ (658) | ||||
Settlement of other RSUs (in shares) | 123,604 | |||||||
Cancellation of shares to fund employee tax withholdings (Note 19 - Equity) (in shares) | (292,360) | |||||||
Cancellation of shares to fund employee tax withholdings (Note 19 - Equity) | (437) | (437) | ||||||
Issuance of shares (Note 17 - Related-Party Transactions) (in shares) | 21,739,132 | |||||||
Issuance of shares (Note 17 - Related-Party Transactions) | 30,000 | $ 2 | 29,998 | |||||
Issuance of units (Note 3 - Acquisitions and Note 19 - Equity) (in shares) | 1 | 19,692,990 | ||||||
Issuance of units (Note 3 - Acquisitions and Note 19 - Equity) | 33,172 | $ 33,172 | ||||||
Foreign currency translation adjustment | 64 | 64 | ||||||
Ending balance (in shares) at Mar. 31, 2023 | 85,580,031 | 15 | 143,559,992 | |||||
Ending balance at Mar. 31, 2023 | 490,432 | $ 9 | $ 0 | 926,910 | (631,241) | (209) | $ 194,963 | |
Beginning balance (in shares) at Dec. 31, 2023 | 96,340,741 | 15 | 132,970,816 | |||||
Beginning balance at Dec. 31, 2023 | 272,407 | $ 10 | $ 0 | 946,929 | (714,383) | (249) | $ 40,100 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (20,304) | [1] | (7,538) | $ (12,766) | ||||
Equity-based compensation, net | 3,769 | 3,769 | ||||||
Conversion of LLC Units for Class A Common Stock (Note 19 - Equity) (in shares) | 618 | (618) | ||||||
Conversion of LLC Units for Class A Common Stock (Note 19 - Equity) | 0 | |||||||
Settlement of long-term incentive plan (“LTIP”) restricted stock units (“RSUs”), net (Note 19 - Equity) (in shares) | 88,289 | (88,289) | ||||||
Settlement of long-term incentive plan (“LTIP”) restricted stock units (“RSUs”), net (Note 19 - Equity) | 0 | 22 | $ (22) | |||||
Settlement of other RSUs (in shares) | 271,841 | |||||||
Cancellation of shares to fund employee tax withholdings (Note 19 - Equity) (in shares) | (139,730) | |||||||
Cancellation of shares to fund employee tax withholdings (Note 19 - Equity) | (132) | (132) | ||||||
Foreign currency translation adjustment | (17) | (17) | ||||||
Ending balance (in shares) at Mar. 31, 2024 | 96,561,759 | 15 | 132,881,909 | |||||
Ending balance at Mar. 31, 2024 | $ 255,723 | $ 10 | $ 0 | $ 950,588 | $ (721,921) | $ (266) | $ 27,312 | |
[1] (1) Amounts presented contain results from both continuing and discontinued operations. Refer to Note 4 - Discontinued Operations for additional information regarding cash flow associated with the results of discontinued operations. |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Operating Activities | |||
Net income (loss) | [1] | $ (20,304) | $ 14,592 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | [1] | (111,939) | 207,226 |
Net cash provided by (used in) operating activities | [1] | (132,243) | 221,818 |
Investing Activities | |||
Purchases and originations of loans held for investment | [1] | (684,204) | (875,292) |
Proceeds/payments received on loans held for investment | [1] | 551,350 | 407,024 |
Purchases and originations of loans held for investment, subject to nonrecourse debt | [1] | (10,522) | (26,981) |
Proceeds/payments on loans held for investment, subject to nonrecourse debt | [1] | 188,219 | 332,659 |
Proceeds on sale of mortgage servicing rights (“MSR”) | [1] | 4,733 | 80,149 |
Acquisition of American Advisors Group net assets | [1] | 0 | (140,854) |
Acquisition of fixed assets | [1] | (461) | (1,923) |
Other investing activities, net | [1] | 358 | (1,539) |
Net cash provided by (used in) investing activities | [1] | 49,473 | (226,757) |
Financing Activities | |||
Proceeds from issuance of HMBS related obligations | [1] | 468,520 | 293,669 |
Payments on HMBS related obligations | [1] | (482,739) | (384,618) |
Proceeds from issuance of nonrecourse debt | [1] | 128,185 | 662,101 |
Payments on nonrecourse debt | [1] | (181,113) | (208,909) |
Proceeds from other financing lines of credit | [1] | 1,277,218 | 1,335,415 |
Payments on other financing lines of credit | [1] | (1,134,506) | (1,677,418) |
Changes in notes payable | [1] | 26,265 | 9,790 |
Other financing activities, net | [1] | (266) | (837) |
Net cash provided by financing activities | [1] | 101,564 | 59,193 |
Effect of exchange rate changes on cash and cash equivalents | (17) | 64 | |
Net decrease in cash and cash equivalents and restricted cash | 18,777 | 54,318 | |
Cash and restricted cash, beginning of period | [1] | 224,801 | 277,436 |
Cash and restricted cash, end of period | [1] | 243,578 | 331,754 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract] | |||
Cash and cash equivalents | [1] | 48,229 | 103,141 |
Restricted cash | [1] | 195,349 | 228,613 |
Total cash, cash equivalents, and restricted cash | [1] | 243,578 | 331,754 |
Supplementary Cash Flows Information | |||
Cash paid for interest | 100,346 | 72,110 | |
Loans transferred to loans held for sale, at fair value, from loans held for investment, at fair value | 3,787 | 2,151 | |
Common Class A | |||
Financing Activities | |||
Issuance of Class A Common Stock | [1] | $ 0 | $ 30,000 |
[1] (1) Amounts presented contain results from both continuing and discontinued operations. Refer to Note 4 - Discontinued Operations for additional information regarding cash flow associated with the results of discontinued operations. |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business Finance of America Companies Inc. (“FoA,” the “Company,” “we,” “us,” or “our”) was incorporated in Delaware on October 9, 2020. FoA is a financial services holding company which, through its operating subsidiaries, is a leading provider of home equity-based financing solutions for a modern retirement. In addition, FoA offers capital markets and portfolio management capabilities primarily to optimize the distribution of its originated loans to investors. FoA has a controlling financial interest in Finance of America Equity Capital LLC (“FoA Equity”). FoA Equity owns all of the outstanding equity interests in Finance of America Funding LLC (“FOAF”). FOAF wholly owns Finance of America Holdings LLC (“FAH”) and Incenter LLC (“Incenter” and collectively, with FoA Equity, FOAF, and FAH, known as “holding company subsidiaries”). The Company, through its FAH holding company subsidiary, operates a lending company, Finance of America Reverse LLC (“FAR”). Through FAR, the Company originates, purchases, sells, securitizes, and services home equity conversion mortgages (“HECM”), which are insured by the Federal Housing Administration (“FHA”), and non-agency reverse mortgages. The Company, through its Incenter holding company subsidiary, has operating service companies (the “operating service subsidiaries” and together with FAR, the “operating subsidiaries”) which provide capital markets and portfolio management capabilities such as secondary markets advisory services, mortgage trade brokerage, and capital management services. Organizational Transformation and Realignment of Segments During the fourth quarter of 2022 and calendar year 2023, the Company entered into a series of transactions, discontinuing certain business lines while enhancing our reverse mortgage loan business, as described in further detail below, in order to transform our business from a vertically integrated, diversified lending and complementary services platform to a modern retirement solutions platform. This transformation included the wind-down of the previously reported Mortgage Originations segment and sale of the previously reported Commercial Originations and Lender Services segments. During the quarter ended March 31, 2023, to more closely align with the business strategy, the Company restructured the reporting segments into the following: Retirement Solutions and Portfolio Management. Refer to Note 15 - Business Segment Reporting for additional information. Transactions Relating to Discontinued Business Lines On October 20, 2022, the Board of Directors (the “Board”) of the Company authorized a plan to discontinue the operations of the Company’s previously reported Mortgage Originations segment, other than its home improvement lending business, which commenced in the fourth quarter of 2022 and was completed on February 28, 2023. Refer to Note 4 - Discontinued Operations for additional information. On August 31, 2023, the Company’s indirect subsidiary, Finance of America Mortgage LLC (“FAM”), entered into an agreement to sell certain operational assets of the home improvement lending business. This transaction closed on September 15, 2023. In connection with such transaction, the Company began the process of winding down the operations of the home improvement lending business, which was substantially complete as of March 31, 2024. The wind-down of the home improvement lending business is not considered by the Company to be a strategic shift that has or will have a major effect on our operations and financial results. Therefore, the operations of the home improvement lending business are reported as part of the Company’s Retirement Solutions segment rather than as discontinued operations. On February 1, 2023, Incenter entered into an agreement to sell one hundred percent of (i) the issued and outstanding shares of capital stock of Agents National Title Holding Company (“ANTIC”), a direct subsidiary of Incenter and an indirect subsidiary of the Company, and (ii) the issued and outstanding membership interests of Boston National Holdings LLC (“BNT”), a direct subsidiary of Incenter and an indirect subsidiary of the Company. The closing of the ANTIC and BNT sale was completed on July 3, 2023. The Company historically included the operations of ANTIC and BNT in its previously reported Lender Services segment. On March 30, 2023, the FoA Equity Board authorized a plan to sell assets making up the remainder of the Company’s previously reported Lender Services segment, with the exception of its Incenter Solutions LLC operating service subsidiary. The Company completed the sale of such assets on June 30, 2023. Refer to Note 4 - Discontinued Operations for additional information. During the quarter ended September 30, 2023, the Company ceased the operations of the Company’s Incenter Solutions LLC operating service subsidiary. The wind-down of Incenter Solutions LLC was substantially complete as of December 31, 2023. The wind-down of Incenter Solutions LLC is not considered by the Company to be a strategic shift that has or will have a major effect on our operations and financial results. Therefore, the operations of Incenter Solutions LLC are reported within Corporate and Other in Note 15 - Business Segment Reporting, rather than as discontinued operations. On February 19, 2023, FAH and FAM entered into an agreement to sell certain commercial originations operational assets of FAM, operating under the brand Finance of America Commercial (“FACo”). This transaction closed on March 14, 2023. The Company historically included the commercial originations operations of FACo in its previously reported Commercial Originations segment. In connection with the transaction, the Company discontinued the operations of and wound-down its Commercial Originations segment. Refer to Note 4 - Discontinued Operations for additional information. American Advisors Group Transaction On March 31, 2023, FAR acquired a majority of the assets and certain of the liabilities of American Advisors Group, now known as Bloom Retirement Holdings Inc. (“AAG/Bloom” or “Seller”), including, among other things, certain residential reverse mortgage loans and the right to service certain HECM (such acquisition, the “AAG Transaction”). These assets and liabilities were acquired pursuant to an Asset Purchase Agreement, a Servicing Rights Purchase and Sale Agreement, and a Loan Sale Agreement entered into on December 6, 2022 with AAG/Bloom. The assets, liabilities, and operations acquired by the Company as a result of the AAG Transaction are included in the Company’s Retirement Solutions segment reporting. Refer to Note 3 - Acquisitions for additional information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements comprise the financial statements of FoA and its controlled subsidiaries. The condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial statements and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). The accompanying financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of its financial condition as of March 31, 2024 and its results of operations and cash flows for the three months ended March 31, 2024 and 2023 . The Condensed Consolidated Statement of Financial Condition at December 31, 2023 was derived from audited financial statements but does not contain all of the footnote disclosures from the annual financial statements. Operating results for the interim periods are not necessarily indicative of the results that may be expected for any future period or for the full year. The condensed consolidated financial statements, including the significant accounting policies, should be read in conjunction with the consolidated financial statements and notes as of and for the year ended December 31, 2023 within the Company’s Annual Report on Form 10-K. The significant accounting policies, together with the other Notes to Condensed Consolidated Financial Statements, are an integral part of the condensed consolidated financial statements. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates regarding loans held for investment, subject to HMBS related obligations, loans held for investment, subject to nonrecourse debt, loans held for investment, HMBS related obligations, and nonrecourse debt are particularly subject to change. Actual results may differ from those estimates and assumptions due to factors such as changes in the economy, interest rates, secondary market pricing, prepayment assumptions, home prices, or discrete events affecting specific borrowers, and such differences could be material. Recently Issued Accounting Guidance, Not Yet Adopted as of March 31, 2024 Standard Description Date of Planned Adoption Effect on Condensed Consolidated Financial Statements Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07 which requires disclosures of significant reportable expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. We are currently evaluating the impact that this guidance will have on the disclosures within our financial statements, and expect to adopt this ASU for the year ending December 31, 2024. This ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09 that enhances income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and by requiring disclosure of the amount of income taxes paid disaggregated by federal, state, and foreign taxes, as well as disaggregated by material individual jurisdictions. We are currently evaluating the impact that this guidance will have on the disclosures within our financial statements, and expect to adopt this ASU for the year ending December 31, 2025. This ASU is effective for annual periods beginning after December 15, 2024. Adoption of this ASU should be applied on a prospective basis, but retrospective application is permitted. Early adoption is permitted. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | 3. Acquisitions Asset Acquisition On March 31, 2023, the Company completed the acquisition of the assets and liabilities associated with the AAG Transaction for a total purchase consideration of $215.4 million. The Company determined that the AAG Transaction should be considered an asset acquisition, because substantially all of the fair value of the acquired assets was concentrated in a single group of similar assets. Under the accounting for asset acquisitions, the acquisition is recorded using a cost accumulation and allocation model under which the cost of the acquisition is allocated on a relative fair value basis to the assets acquired and liabilities assumed. Acquisition-related transaction costs are capitalized as a component of the cost of the assets acquired. Consequently, no goodwill was recognized as part of this transaction. The following table summarizes the fair value of the consideration transferred and the major classes of assets acquired and liabilities assumed in relation to the March 31, 2023 acquisition (in thousands): Consideration transferred: FoA Class B Common Stock (1) (Note 19 - Equity) $ — Cash consideration (2) 3,100 Notes payable to Seller 4,500 Pay off indebtedness (2) 136,984 Initial equity consideration – Class A LLC Units (3) (Note 19 - Equity) 24,419 Deferred equity consideration – Class A LLC Units (4) (Note 19 - Equity) 13,137 Other liabilities assumed 8,429 Buyer transaction expenses (2) 770 Forgiveness of bridge working capital notes payable 24,034 Total cost $ 215,373 Assets acquired: Loans held for investment, subject to HMBS related obligations $ 5,448,712 Loans held for investment 138,270 Fixed assets and leasehold improvements 2,400 Right-of-use leased assets 491 Other assets 6,270 Total assets acquired $ 5,596,143 Liabilities assumed: HMBS related obligations $ 5,354,372 Operating lease liabilities 492 Payables and other liabilities 25,906 Total liabilities assumed 5,380,770 Net identifiable assets acquired $ 215,373 (1) The Seller owns one share of FoA Class B Common Stock. Class B Common Stock has no economic rights but entitles each holder of at least one such share (regardless of the number of shares held) to a number of votes that is equal to the aggregate number of units of FoA Equity (“Class A LLC Units”) held by the holder on all matters on which Class A Common Stockholders are entitled to vote. The fair value of the Class B Common Stock was determined to be negligible as there are no economic rights associated with the Class B Common Stock. (2) Amounts represent the cash portion of the consideration paid to acquire the net assets of AAG/Bloom. Total cash consideration was $140.9 million. (3) At the closing of the AAG Transaction, FoA Equity issued 19,692,990 Class A LLC Units to the Seller, which hold 1:1 conversion rights for Class A Common Stock of FoA. At the closing date, the fair value of these Class A LLC Units were equal to the Class A Common Stock share price of $1.24 per share. (4) The deferred equity consideration is comprised of two forms of issuable Class A LLC Units; 7,058,416 units with a fair value of $8.7 million that are equity classified and indemnity holdback units totaling up to 7,142,260 units as of the acquisition date with a fair value of $4.4 million that are liability classified. The deferred equity consideration that is liability classified is recorded in payables and other liabilities in the Condensed Consolidated Statements of Financial Condition. two |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 4. Discontinued Operations During the fourth quarter of 2022 and calendar year 2023, the Company entered into a series of transactions, discontinuing certain business lines while enhancing our reverse mortgage loan business, in order to transform our business from a vertically integrated, diversified lending and complementary services platform to a modern retirement solutions platform. This transformation included the wind-down of the previously reported Mortgage Originations segment and sale of the previously reported Commercial Originations and Lender Services segments. This constitutes a strategic shift that has or will have a major effect on our operations and financial results. The following table summarizes the major classes of assets and liabilities classified as discontinued operations as of March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Assets Other assets, net $ 7,290 $ 6,721 Liabilities Payables and other liabilities 20,647 18,304 The following table summarizes the major components of net loss from discontinued operations (in thousands): For the three months ended March 31, 2024 For the three months ended March 31, 2023 Revenues Net fair value gains on loans and related obligations $ — $ 308 Fee income — 32,628 Gain on sale and other income from loans held for sale, net — 396 Net interest expense: Interest income — 517 Interest expense — (820) Net interest expense — (303) Total revenues — 33,029 Expenses Salaries, benefits, and related expenses — 30,851 Loan production and portfolio related expenses — 1,037 Marketing and advertising expenses — 540 Depreciation and amortization — 2,778 General and administrative expenses 1,524 25,150 Total expenses 1,524 60,356 Impairment of other assets (1) — (1,055) Other, net (2) (3,000) (9,089) Net loss from discontinued operations before income taxes (4,524) (37,471) Provision for income taxes from discontinued operations — 3,419 Net loss from discontinued operations (4,524) (40,890) Net loss from discontinued operations attributable to noncontrolling interest (2,621) (25,217) Net loss from discontinued operations attributable to controlling interest $ (1,903) $ (15,673) (1) The Company evaluates the carrying value of long-lived assets, including fixed assets, leasehold improvements as well as right-of-use assets in operating leases when indicators of impairment exist in accordance with Accounting Standards Codification (“ASC”) 360, Property, Plant, and Equipment. Based on the analysis, the Company recognized an impairment charge in the three months ended March 31, 2023, related to the sale of the previously reported Commercial Originations segment. (2) Includes a $3.0 million contingent liability related to our discontinued operations for the three months ended March 31, 2024 and a $10.2 million loss on the sale of our commercial originations operational assets for the three months ended March 31, 2023. The Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 included the following material activities related to discontinued operations (in thousands): For the three months ended March 31, 2024 For the three months ended March 31, 2023 Gain on sale and other income from loans held for sale, net $ — $ 396 Unrealized fair value changes on loans, related obligations, and derivatives — 308 Impairment of other assets — 1,055 Depreciation and amortization — 2,778 Acquisition of fixed assets — 1,815 |
Variable Interest Entities and
Variable Interest Entities and Securitizations | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities and Securitizations | 5. Variable Interest Entities and Securitizations The Company determined that the special purpose entities created in connection with its securitizations are VIEs. A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary, which is the entity that, through its variable interests, has both the power to direct the activities that significantly impact the VIE’s economic performance and the obligations to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Consolidated VIEs FAR FAR securitizes certain of its interests in HECM buyouts and non-agency reverse mortgage loans. The transactions provide investors with the ability to invest in a pool of reverse mortgage loans secured by residential properties. The transactions provide FAR with access to liquidity for these assets, ongoing servicing fees, and potential residual returns. The principal and interest on the outstanding certificates are paid using the cash flows from the underlying reverse mortgage loans, which serve as collateral for the debt. The securitizations are callable at or following the optional redemption date as defined in the respective indenture agreements. In the three months ended March 31, 2024, the Company redeemed outstanding securitized notes related to certain non-agency reverse product securitizations. As part of the redemptions, the Company paid off notes with outstanding principal balances of $424.7 million. The notes were paid off at par. FAM FAM securitized certain of its interests in commercial mortgage loans. The transactions provided debt security holders the ability to invest in a pool of loans secured by an investment in real estate. The transactions provided the Company with access to liquidity for the loans and ongoing management fees. The principal and interest on the outstanding debt securities are paid using the cash flows from the underlying loans, which serve as collateral for the debt. Servicing-Securitized Loans In their capacity as servicer of the securitized loans, FAR and FAM retain the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance. FAR and FAM also retain certain beneficial interests in these trusts which provide exposure to potential gains and losses based on the performance of the trust. As FAR and FAM have both the power to direct the activities that significantly impact the VIE’s economic performance and the obligations to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, the definition of primary beneficiary is met and the trusts are consolidated by the Company through its FAR and FAM subsidiaries. Certain obligations may arise from the agreements associated with transfers of loans. Under these agreements, the Company may be obligated to repurchase the loans or otherwise indemnify or reimburse the investor for losses incurred due to material breach of contractual representations and warranties. There were no charge-offs associated with these transferred mortgage loans related to the standard securitization representations and warranties obligations for the three months ended March 31, 2024 or 2023. The following table presents the assets and liabilities of the Company’s consolidated VIEs, which are included in the Condensed Consolidated Statements of Financial Condition, and excludes intercompany balances, except for retained bonds and beneficial interests (in thousands): March 31, 2024 December 31, 2023 ASSETS Restricted cash $ 183,490 $ 168,010 Loans held for investment, subject to nonrecourse debt, at fair value 8,026,026 7,881,566 Other assets, net 56,386 68,178 TOTAL ASSETS $ 8,265,902 $ 8,117,754 LIABILITIES Nonrecourse debt, at fair value $ 8,015,402 $ 7,859,065 Payables and other liabilities 501 546 TOTAL VIE LIABILITIES 8,015,903 7,859,611 Retained bonds and beneficial interests eliminated in consolidation (478,412) (327,653) TOTAL CONSOLIDATED LIABILITIES $ 7,537,491 $ 7,531,958 Unconsolidated VIEs Transfer of loans accounted for as sales The Company securitized certain of its interests in non-agency reverse mortgage loans and in agency-eligible residential mortgage loans. The transactions provided investors with the ability to invest in a pool of mortgage loans secured by residential properties and provided the Company with access to liquidity for these assets and ongoing service fees. The Company’s beneficial interest in the securitizations is limited to a 5% eligible vertical interest in the trusts. The Company determined that the securitization structures meet the definition of a VIE and concluded that the Company does not hold a significant variable interest in the securitizations and that the contractual role as servicer is not a variable interest. The transfers of the loans to the VIEs were determined to be sales. The Company derecognized the mortgage loans and did not consolidate the trusts. The Company’s continuing involvement with and exposure to loss from the VIEs includes the carrying value of the retained bonds, the servicing asset recognized in the sale of the loans, servicing advances in the role as servicer, and obligations under representations and warranties contained in the loan sale agreements. Creditors of the VIEs have no recourse to the Company’s assets or general credit. The underlying performance of the mortgage loans transferred has a direct impact on the fair values and cash flows of the beneficial interests held and the servicing asset recognized. Transfer of loans accounted for as secured borrowings The Company securitized certain non-agency reverse mortgage loans and commercial mortgage loans where its beneficial interest in the securitizations is limited to a 5% eligible vertical interest in the trusts. The Company determined that these securitization structures meet the definition of a VIE and concluded that the Company does not hold a significant variable interest in the securitizations and the Company does not have the power to direct the activities that most significantly affect the economic performance of the VIEs. However, the transfers of the loans to the VIEs were determined not to be sales. As such, the Company continues to recognize the loans and recognized a nonrecourse liability for the proceeds received from third parties for the transfer of the loans. Bonds issued in the securitization that were retained by the Company are not recognized. The Company’s continuing involvement with and exposure to loss from the VIEs includes the carrying value of the retained bonds, servicing advances in the role as servicer, and obligations under representations and warranties contained in the loan sale agreements. Creditors of the VIEs have no recourse to the Company’s assets or general credit. The underlying performance of the mortgage loans held has a direct impact on the fair values and cash flows of the beneficial interests held. The tables below present a summary of the unconsolidated VIEs for which the Company holds variable interests (in thousands). March 31, 2024 Carrying value Assets Liabilities Maximum exposure to loss Total assets in VIEs Transfers of loans - sale treatment Retained interests $ 50,124 $ — $ 50,124 $ 996,999 Transfers of loans - secured borrowing Loans and nonrecourse liability 388,565 367,582 20,983 388,565 TOTAL $ 438,689 $ 367,582 $ 71,107 $ 1,385,564 December 31, 2023 Carrying value Assets Liabilities Maximum exposure to loss Total assets in VIEs Transfers of loans - sale treatment Retained interests $ 50,774 $ — $ 50,774 $ 1,008,152 Transfers of loans - secured borrowing Loans and nonrecourse liability 389,557 368,343 21,214 389,557 TOTAL $ 440,331 $ 368,343 $ 71,988 $ 1,397,709 As of March 31, 2024 and December 31, 2023, there were $0.8 million and $0.7 million, respectively, of mortgage loans transferred by the Company to unconsolidated securitization trusts that are 90 days or more past due. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 6. Fair Value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is based on the assumptions market participants would use when pricing an asset or liability and follows a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted prices available in active markets (i.e., observable inputs) and the lowest priority to data lacking transparency (i.e., unobservable inputs). In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. An instrument’s categorization within the fair value hierarchy is based on the lowest level of significant input to its valuation. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. All aspects of nonperformance risk, including the Company’s own credit standing, are considered when measuring the fair value of a liability. Following is a description of the three levels of the fair value hierarchy: Level 1 Inputs: Quoted prices for identical instruments in active markets. Level 2 Inputs: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 Inputs: Instruments with unobservable inputs that are significant to the fair value measurement. The Company classifies assets and liabilities in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There wer e no transfers within the hierarchy during the three months ended March 31, 2024 and 2023. Following are descriptions of the valuation methodologies used to measure material assets and liabilities at fair value and the details of the valuation models, key inputs to those models, and significant assumptions utilized. Within the assumption tables presented, not meaningful (“NM”) refers to a range of inputs that is too broad to provide meaningful information to the user or to an input that has no range and consists of a single data point. Instrument Valuation techniques Classification of Fair Value Hierarchy Assets Loans held for investment, subject to HMBS related obligations (1) HECM loans - securitized into Ginnie Mae HMBS These loans are valued utilizing a present value methodology that discounts estimated projected cash flows over the life of the loan portfolio using conditional prepayment rate (“CPR”), loss frequency, loss severity, borrower draw, and discount rate assumptions. Level 3 Loans held for investment, subject to nonrecourse debt (1) HECM buyouts - securitized (nonperforming) These loans are valued utilizing a present value methodology that discounts estimated projected cash flows over the life of the portfolio using CPR, loss frequency, loss severity, and discount rate assumptions. Level 3 HECM buyouts - securitized (performing) These loans are valued utilizing a present value methodology that discounts estimated projected cash flows over the life of the portfolio using weighted average remaining life (“WAL”), CPR, loss severity, and discount rate assumptions. Level 3 Non-agency reverse mortgage loans - securitized These loans are valued utilizing a present value methodology that discounts estimated projected cash flows over the life of the portfolio using WAL, loan-to-value (“LTV”), CPR, loss severity, home price appreciation (“HPA”), and discount rate assumptions. Level 3 Commercial mortgage loans - securitized This product is valued using a discounted cash flow model utilizing a single monthly mortality prepayment rate (“SMM”), discount rate, and loss rate assumptions. Level 3 (1) The Company aggregates loan portfolios based on the underlying securitization trust and values these loans using these aggregated pools. The range of inputs provided is based on the range of inputs utilized for each securitization trust. Loans held for investment Inventory buyouts The fair value of repurchased loans is based on expected cash proceeds of the liquidation of the underlying properties and expected claim proceeds from HUD. The primary assumptions utilized in valuing nonperforming repurchased loans include CPR, loss frequency, loss severity, and discount rate. Termination proceeds are adjusted for expected loss frequencies and severities to arrive at net proceeds that will be provided upon final resolution, including assignments to FHA. Historical experience is utilized to estimate the loss rates resulting from scenarios where FHA insurance proceeds are not expected to cover all principal and interest outstanding and, as servicer, the Company is exposed to losses upon resolution of the loan. Level 3 Non-agency reverse mortgage loans The fair value of non-agency reverse mortgage loans is based on values for investments with similar investment grade ratings and the value the Company would expect to receive if the whole loans were sold to an investor. The Company values non-agency reverse mortgage loans utilizing a present value methodology that discounts estimated projected cash flows over the life of the loan portfolio. The primary assumptions utilized in valuing the loans include WAL, LTV, CPR, loss severity, HPA, and discount rate. Level 3 Commercial mortgage loans This product is valued using a discounted cash flow (“DCF”) model with SMM, discount rate, and constant default rate (“CDR”) assumptions. Level 3 Other assets Loans held for sale - residential mortgage loans This includes all mortgage loans that can be sold to the agencies, which are valued predominantly by published forward agency prices. This will also include all non-agency loans where recently negotiated market prices for the loan pool exist with a counterparty (which approximates fair value), or quoted market prices for similar loans are available. Level 2 Retained bonds Management obtains third-party valuations to assess the reasonableness of the fair value calculations provided by the internal valuation model. The primary assumptions utilized include WAL and discount rate. Level 3 MSR The Company valued MSR internally through a DCF analysis and calculated using a pricing model. This pricing model is based on the objective characteristics of the portfolio (loan amount, note rate, etc.) and commonly used industry assumptions such as discount rate and weighted average CPR. The range and weighted average of the unobservable inputs of MSR are not meaningful at March 31, 2024 or December 31, 2023. Level 3 Liabilities HMBS related obligations HMBS related obligations The estimated fair value is based on the net present value of projected cash flows over the estimated life of the liability. The estimated fair value of the HMBS related obligations also includes the consideration required by a market participant to transfer the HECM and HMBS servicing obligations, including exposure resulting from shortfalls in FHA insurance proceeds as well as assumptions that it believes a market participant would consider in valuing the liability, including, but not limited to, assumptions for repayment, costs to transfer servicing obligations, shortfalls in FHA insurance proceeds, and discount rates. The significant unobservable inputs used in the measurement include CPR and discount rates. Level 3 Nonrecourse debt Nonrecourse reverse mortgage loan financing liability The estimated fair value is based on the net present value of projected cash flows over the estimated life of the liability. The significant unobservable inputs used in the measurement include WAL, CPR, and discount rates. Level 3 Nonrecourse commercial loan financing liability The estimated fair value is based on the net present value of projected cash flows over the estimated life of the liability. The primary assumptions utilized include WAL, weighted average SMM, and discount rates. The Company estimates prepayment speeds giving consideration that the Company may in the future transfer additional loans to the trust, subject to the availability of funds provided for within the trust. Level 3 Deferred purchase price liabilities Deferred purchase price liabilities These liabilities are measured based on the estimated amount of indemnified claims associated with the AAG Transaction and the closing market price of the Company’s publicly-traded stock on the applicable date of the Condensed Consolidated Statements of Financial Condition. Refer to Note 3 - Acquisitions for additional information. Level 3 Tax Receivable Agreements (“TRA”) obligation The fair value is derived through the use of a DCF model. The significant unobservable assumptions used in the DCF include the ability to utilize tax attributes based on current tax forecasts, a constant U.S. federal income tax rate, and a discount rate. Level 3 Warrant liability Warrants The warrants are publicly-traded and are valued based on the closing market price of the applicable date of the Condensed Consolidated Statements of Financial Condition. Level 1 March 31, 2024 December 31, 2023 Instrument / Unobservable Inputs Range Weighted Average Range Weighted Average Assets Loans held for investment, subject to HMBS related obligations CPR NM 20.7 % NM 20.1 % Loss frequency NM 4.2 % NM 4.5 % Loss severity 3.6% - 14.5% 3.8 % 3.4% - 12.9% 3.5 % Discount rate NM 5.1 % NM 5.0 % Average draw rate NM 1.1 % NM 1.1 % Loans held for investment, subject to nonrecourse debt: HECM buyouts - securitized (nonperforming) CPR NM 39.3 % NM 39.8 % Loss frequency 23.1% - 100.0% 49.3 % 23.1% - 100% 51.0 % Loss severity 3.6% - 14.5% 7.0 % 3.4% - 12.8% 6.4 % Discount rate NM 9.0 % NM 8.6 % HECM buyouts - securitized (performing) WAL (in years) NM 7.3 NM 7.4 CPR NM 15.2 % NM 15.1 % Loss severity 3.6% - 14.5% 7.0 % 3.4% - 12.8% 6.9 % Discount rate NM 8.5 % NM 8.2 % Non-agency reverse mortgage loans - securitized WAL (in years) NM 9.9 NM 9.7 LTV 0.0% - 106.0% 45.6 % 0.0% - 79.6% 45.9 % CPR NM 14.6 % NM 14.7 % Loss severity NM 10.0 % NM 10.0 % HPA (6.3)% - 7.1% 3.3 % (9.8)% - 7.6% 3.3 % Discount rate NM 7.2 % NM 6.9 % Commercial mortgage loans - securitized SMM NM 9.2 % NM 10.7 % Discount rate NM 18.5 % NM 16.5 % Loss rate NM 3.8 % NM 1.0 % Loans held for investment: Inventory buyouts CPR NM 40.6 % NM 41.5 % Loss frequency NM 46.8 % NM 48.2 % Loss severity 3.6% - 14.5% 5.4 % 3.4% - 12.8% 5.1 % Discount rate NM 9.0 % NM 8.6 % Non-agency reverse mortgage loans WAL (in years) NM 11.5 NM 12.1 LTV 1.3% - 67.3% 34.1 % 3.9% - 53.8% 33.8 % CPR NM 14.6 % NM 14.4 % Loss severity NM 10.0 % NM 10.0 % HPA (6.3)% - 7.1% 3.2 % (9.8)% - 7.6% 3.1 % Discount rate NM 7.1 % NM 6.9 % March 31, 2024 December 31, 2023 Instrument / Unobservable Inputs Range Weighted Average Range Weighted Average Commercial mortgage loans SMM NM 5.1 % NM 73.6 % CDR NM 31.2 % NM 25.6 % Discount rate 9.6% - 20.7% 13.6 % 9.6% - 20.0% 13.2 % Other assets: Retained bonds WAL (in years) 2.3 - 23.2 4.8 2.3 - 23.4 4.9 Discount rate (24.3)% - 12.6% 7.3 % (31.2)% - 12.3% 6.7 % Liabilities HMBS related obligations CPR NM 24.6 % NM 23.8 % Discount rate NM 5.1 % NM 5.0 % Nonrecourse debt: Reverse mortgage loans: Performing/Nonperforming HECM securitizations WAL (in years) NM 0.7 NM 0.9 CPR 21.6% - 24.2% 23.0 % 21.5% - 22.3% 21.9 % Discount rate NM 10.3 % NM 10.0 % Securitized non-agency reverse WAL (in years) 1.0 - 11.1 4.6 0.8 - 11.2 4.5 CPR 0.0% - 21.0% 13.3 % 10.6% - 22.3% 14.7 % Discount rate NM 7.2 % NM 7.0 % Nonrecourse commercial loan financing liability WAL (in months) NM 1.2 NM 1.8 Weighted average SMM NM 45.4 % NM 33.3 % Discount rate NM 10.9 % NM 9.1 % Deferred purchase price liabilities TRA obligation Discount rate NM 35.8 % NM 33.0 % Fair Value of Assets and Liabilities The following table provides a summary of the recognized assets and liabilities that are measured at fair value on a recurring basis (in thousands): March 31, 2024 Total Fair Value Level 1 Level 2 Level 3 Assets Loans held for investment, subject to HMBS related obligations $ 18,050,772 $ — $ — $ 18,050,772 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,327,915 — — 8,327,915 Commercial mortgage loans 79,687 — — 79,687 Loans held for investment: Reverse mortgage loans 535,159 — — 535,159 Commercial mortgage loans 751 — — 751 Other assets: Loans held for sale - residential mortgage loans 2,465 — 2,465 — Retained bonds 42,906 — — 42,906 MSR 783 — — 783 Total assets $ 27,040,438 $ — $ 2,465 $ 27,037,973 Liabilities HMBS related obligations $ 17,827,060 $ — $ — $ 17,827,060 Nonrecourse debt: Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability 7,883,472 — — 7,883,472 Nonrecourse commercial loan financing liability 14,424 — — 14,424 Deferred purchase price liabilities: Deferred purchase price liabilities 2,794 — — 2,794 TRA obligation 4,824 — — 4,824 Warrant liability 431 431 — — Total liabilities $ 25,733,005 $ 431 $ — $ 25,732,574 December 31, 2023 Total Fair Value Level 1 Level 2 Level 3 Assets Loans held for investment, subject to HMBS related obligations $ 17,548,763 $ — $ — $ 17,548,763 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,138,403 — — 8,138,403 Commercial mortgage loans 133,990 — — 133,990 Loans held for investment: Reverse mortgage loans 574,271 — — 574,271 Commercial mortgage loans 957 — — 957 Other assets: Loans held for sale - residential mortgage loans 4,246 — 4,246 — Retained bonds 44,297 — — 44,297 MSR 6,436 — — 6,436 Loan purchase commitments 630 — 630 — Total assets $ 26,451,993 $ — $ 4,876 $ 26,447,117 Liabilities HMBS related obligations $ 17,353,720 $ — $ — $ 17,353,720 Nonrecourse debt: Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability 7,876,932 — — 7,876,932 Nonrecourse commercial loan financing liability 27,268 — — 27,268 Deferred purchase price liabilities: Deferred purchase price liabilities 4,318 — — 4,318 TRA obligation 4,537 — — 4,537 Warrant liability 1,150 1,150 — — Total liabilities $ 25,267,925 $ 1,150 $ — $ 25,266,775 Level 3 assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (in thousands): Assets Three months ended March 31, 2024 Loans held for investment Loans held for investment, subject to nonrecourse debt MSR Retained bonds Beginning balance $ 18,123,991 $ 8,272,393 $ 6,436 $ 44,297 Total gain (loss) included in earnings 604,482 23,599 (920) (742) Purchases, settlements, and transfers: Purchases and additions 684,204 10,522 — — Sales and settlements (551,350) (188,219) (4,733) (649) Transfers in (out) between categories (274,645) 289,307 — — Ending balance $ 18,586,682 $ 8,407,602 $ 783 $ 42,906 Liabilities Three months ended March 31, 2024 HMBS related obligations Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability Nonrecourse commercial loan financing liability Deferred purchase price liabilities TRA obligation Beginning balance $ (17,353,720) $ (7,876,932) $ (27,268) $ (4,318) $ (4,537) Total gain (loss) included in earnings (487,559) (55,487) 8,863 1,524 (287) Purchases, settlements, and transfers: Purchases and additions (468,520) (128,185) — — — Settlements 482,739 177,132 3,981 — — Ending balance $ (17,827,060) $ (7,883,472) $ (14,424) $ (2,794) $ (4,824) Assets Three months ended March 31, 2023 Loans held for investment Loans held for investment, subject to nonrecourse debt Loans held for sale MSR Retained bonds Purchase commitments Beginning balance $ 12,022,098 $ 7,454,638 $ 161,861 $ 95,096 $ 46,439 $ 9,356 Total gain (loss) included in earnings 244,759 298,636 (828) (1,369) 1,031 — Purchases, settlements, and transfers: Purchases and additions 6,462,274 26,981 40,468 405 — — Sales and settlements (406,942) (333,324) (198,338) (80,419) (422) (9,356) Transfers in (out) between categories (961,660) 927,896 15,580 — — — Ending balance $ 17,360,529 $ 8,374,827 $ 18,743 $ 13,713 $ 47,048 $ — Liabilities Three months ended March 31, 2023 HMBS related obligations Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability Nonrecourse commercial loan financing liability Nonrecourse MSR financing liability Deferred purchase price liabilities TRA obligation Beginning balance $ (10,996,755) $ (7,175,857) $ (106,758) $ (60,562) $ (137) $ (3,781) Total gain (loss) included in earnings (147,451) (237,315) 381 748 — 1,579 Purchases, settlements, and transfers: Purchases and additions (5,648,041) (639,499) (22,600) — (4,385) — Settlements 384,618 96,796 53,288 58,826 — — Ending balance $ (16,407,629) $ (7,955,875) $ (75,689) $ (988) $ (4,522) $ (2,202) Fair Value Option The Company has elected to measure its loans held for investment, loans held for sale, HMBS related obligations, and nonrecourse debt at fair value under the fair value option . The Company elected to apply the provisions of the fair value option to these assets and liabilities in order to align financial reporting presentation with the Company’s operational and risk management strategies. Presented in the tables below are the fair value and the unpaid principal balance (“UPB”), at March 31, 2024 and December 31, 2023, of financial assets and liabilities for which the Company has elected the fair value option (in thousands): March 31, 2024 Estimated Fair Value Unpaid Principal Balance Assets at fair value under the fair value option Loans held for investment, subject to HMBS related obligations $ 18,050,772 $ 17,113,496 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,327,915 8,483,961 Commercial mortgage loans 79,687 92,561 Loans held for investment: Reverse mortgage loans 535,159 519,237 Commercial mortgage loans 751 1,044 Other assets: Loans held for sale - residential mortgage loans 2,465 6,997 Liabilities at fair value under the fair value option HMBS related obligations 17,827,060 17,113,496 Nonrecourse debt: Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability 7,883,472 8,447,617 Nonrecourse commercial loan financing liability 14,424 22,295 December 31, 2023 Estimated Fair Value Unpaid Principal Balance Assets at fair value under the fair value option Loans held for investment, subject to HMBS related obligations $ 17,548,763 $ 16,875,437 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,138,403 8,257,750 Commercial mortgage loans 133,990 136,622 Loans held for investment: Reverse mortgage loans 574,271 558,577 Commercial mortgage loans 957 1,044 Other assets: Loans held for sale - residential mortgage loans 4,246 9,247 Liabilities at fair value under the fair value option HMBS related obligations 17,353,720 16,875,437 Nonrecourse debt: Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability 7,876,932 8,429,135 Nonrecourse commercial loan financing liability 27,268 26,661 Net fair value gains on loans and related obligations Provided in the table below is a summary of the components of net fair value gains on loans and related obligations (in thousands): For the three months ended March 31, 2024 For the three months ended March 31, 2023 Net origination gains $ 39,657 $ 24,475 Interest income on mortgage loans 460,034 309,494 Interest expense on HMBS and nonrecourse obligations (373,736) (224,391) Servicing related income, net (1) 10,726 4,391 Fair value changes from model amortization (2) (57,608) (50,266) Net fair value gains from portfolio activity 39,416 39,228 Net fair value gains from changes in market inputs or model assumptions 13,562 112,691 Net fair value gains on loans and related obligations $ 92,635 $ 176,394 (1) Servicing related income, net, is comprised of premiums realized on the securitization of reverse mortgage tails and miscellaneous contractual servicing fees, net of guarantee fees paid. (2) Fair value changes from portfolio runoff and realization of modeled income and expenses. As the cash flows on the underlying mortgage loans will be utilized to settle the outstanding obligations, the Company’s own credit risk would not impact the fair value on the outstanding HMBS related obligations and nonrecourse debt. Fair Value of Other Financial Instruments As of March 31, 2024 and December 31, 2023, all financial instruments were either recorded at fair value or the carrying value approximated fair value with the exception of notes payable, net . Notes payable, net, includes our senior unsecured high-yield debt and related-party credit line recorded at the carrying value of $436.2 million and $410.9 million as of March 31, 2024 and December 31, 2023, respectively, and have a fair value of $373.9 million and $345.6 million as of March 31, 2024 and December 31, 2023, respectively. The fair value for notes payable, net, was determined using quoted market prices adjusted for accrued interest, which is considered to be a Level 2 input. For other financial instruments that were not recorded at fair value, such as cash and cash equivalents including restricted cash, promissory notes receivable, and other financing lines of credit, the carrying value approximates fair value due to the short-term nature of such instruments. The fair value of assets and liabilities whose carrying value approximates fair value is determined using Level 3 inputs, with the exception of cash and cash equivalents, including restricted cash, which are Level 1 inputs. |
Reverse Mortgages Portfolio Com
Reverse Mortgages Portfolio Composition | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Reverse Mortgage Portfolio Composition | 7. Reverse Mortgage Portfolio Composition The table below summarizes the composition and the outstanding UPB of the reverse mortgage loan portfolio serviced by the Company (in thousands): March 31, 2024 December 31, 2023 Reverse mortgage loans: Reverse mortgage loans held for investment, subject to HMBS related obligations $ 17,113,496 $ 16,875,437 Reverse mortgage loans held for investment, subject to nonrecourse debt: Performing HECM buyouts 215,839 216,184 Nonperforming HECM buyouts 382,644 409,965 Non-agency reverse mortgages 7,885,478 7,631,601 Total reverse mortgage loans held for investment, subject to nonrecourse debt 8,483,961 8,257,750 Reverse mortgage loans held for investment: Non-agency reverse mortgages 243,500 241,424 HECM loans not securitized (1) 107,309 101,820 Unpoolable HECM loans (2) 157,032 203,957 Unpoolable HECM tails 11,396 11,376 Total reverse mortgage loans held for investment 519,237 558,577 Total owned reverse mortgage portfolio 26,116,694 25,691,764 Loans reclassified as government guaranteed receivable 72,981 94,636 Loans serviced for others 156,220 164,742 Total serviced reverse mortgage loan portfolio $ 26,345,895 $ 25,951,142 (1) Loans not securitized represent primarily newly originated loans and poolable tails. (2) Unpoolable loans represent primarily loans that have reached 98% of their maximum claim amount (“MCA”). The table below summarizes the reverse mortgage portfolio owned by the Company by product type (in thousands): March 31, 2024 December 31, 2023 Fixed rate loans $ 6,951,821 $ 6,817,176 Adjustable rate loans 19,164,873 18,874,588 Total owned reverse mortgage portfolio $ 26,116,694 $ 25,691,764 As of March 31, 2024 and December 31, 2023, there were $463.1 million an d $525.0 million, |
Loans, at Fair Value
Loans, at Fair Value | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Loans, at Fair Value | 8. Loans, at Fair Value Loans held for investment and held for sale consisted of the following (in thousands): March 31, 2024 Unpaid Principal Balance Fair Value Adjustments Estimated Fair Value Loans held for investment, subject to HMBS related obligations $ 17,113,496 $ 937,276 $ 18,050,772 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,483,961 (156,046) 8,327,915 Commercial mortgage loans 92,561 (12,874) 79,687 Total loans held for investment, subject to nonrecourse debt 8,576,522 (168,920) 8,407,602 Loans held for investment (1) : Reverse mortgage loans 519,237 15,922 535,159 Commercial mortgage loans 1,044 (293) 751 Total loans held for investment 520,281 15,629 535,910 Other assets: Loans held for sale - residential mortgage loans 6,997 (4,532) 2,465 Total loan portfolio $ 26,217,296 $ 779,453 $ 26,996,749 (1) As of March 31, 2024, there was $484.9 million in UPB in loans held for investment pledged as collateral for financing lines of credit. December 31, 2023 Unpaid Principal Balance Fair Value Adjustments Estimated Fair Value Loans held for investment, subject to HMBS related obligations $ 16,875,437 $ 673,326 $ 17,548,763 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,257,750 (119,347) 8,138,403 Commercial mortgage loans 136,622 (2,632) 133,990 Total loans held for investment, subject to nonrecourse debt 8,394,372 (121,979) 8,272,393 Loans held for investment (1) : Reverse mortgage loans 558,577 15,694 574,271 Commercial mortgage loans 1,044 (87) 957 Total loans held for investment 559,621 15,607 575,228 Other assets: Loans held for sale - residential mortgage loans 9,247 (5,001) 4,246 Total loan portfolio $ 25,838,677 $ 561,953 $ 26,400,630 (1) As of December 31, 2023, there was $487.9 million in UPB in loans held for investment pledged as collateral for financing lines of credit. The tables below show the total amount of loans held for investment and held for sale that were greater than 90 days past due and on non-accrual status (in thousands): March 31, 2024 Unpaid Principal Balance Estimated Fair Value Difference Loans held for investment, subject to nonrecourse debt: Commercial mortgage loans $ 33,243 $ 27,295 $ (5,948) Loans held for investment: Commercial mortgage loans 1,044 751 (293) Other assets: Loans held for sale - residential mortgage loans 3,931 20 (3,911) Total loans 90 days or more past due and on non-accrual status $ 38,218 $ 28,066 $ (10,152) December 31, 2023 Unpaid Principal Balance Estimated Fair Value Difference Loans held for investment, subject to nonrecourse debt: Commercial mortgage loans $ 34,115 $ 31,244 $ (2,871) Other assets: Loans held for sale - residential mortgage loans 4,324 428 (3,896) Total loans 90 days or more past due and on non-accrual status $ 38,439 $ 31,672 $ (6,767) The table below shows a reconciliation of the changes in loans held for sale (in thousands): For the three months ended March 31, 2024 For the three months ended March 31, 2023 Beginning balance $ 4,246 $ 173,984 Originations/purchases/repurchases 2,284 79,286 Proceeds from sales (4,151) (200,456) Net transfers related to loans held for sale — 15,580 Net transfers related to discontinued operations — 12,526 Gain (loss) on loans held for sale, net 86 (12,387) Net fair value gain on loans held for sale — 8,961 Ending balance $ 2,465 $ 77,494 |
HMBS Related Obligations, at Fa
HMBS Related Obligations, at Fair Value | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
HMBS Related Obligations, at Fair Value | 9. HMBS Related Obligations, at Fair Value HMBS related obligations, at fair value, consisted of the following (in thousands): March 31, 2024 December 31, 2023 Ginnie Mae loan pools - UPB $ 17,113,496 $ 16,875,437 Fair value adjustments 713,564 478,283 Total HMBS related obligations, at fair value $ 17,827,060 $ 17,353,720 Weighted average remaining life (in years) 4.0 4.1 Weighted average interest rate 6.4 % 6.6 % T he Company was servicing 2,622 |
Nonrecourse Debt, at Fair Value
Nonrecourse Debt, at Fair Value | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Nonrecourse Debt At Fair Value | 10. Nonrecourse Debt, at Fair Value Nonrecourse debt, at fair value, consisted of the following (in thousands): Issue Date Final Maturity Date Interest Rate Original Issue Amount March 31, 2024 December 31, 2023 Securitization of performing/nonperforming HECM loans February 2022 - August 2022 February 2032 - August 2032 2.69% - 9.32% $ 1,084,935 $ 623,988 $ 672,911 Securitization of non-agency reverse loans May 2018 - February 2024 May 2050 - February 2074 1.25% - 4.50% 9,192,451 7,430,291 7,331,305 Securitization of commercial loans April 2021 May 2025 2.10% - 5.40% $ 268,511 48,051 83,237 Total consolidated VIE nonrecourse debt UPB 8,102,330 8,087,453 Nonrecourse reverse loan financing liability (1) 345,287 341,682 Nonrecourse commercial loan financing liability (2) 22,295 26,661 Fair value adjustments (572,016) (551,596) Total nonrecourse debt, at fair value $ 7,897,896 $ 7,904,200 (1) Nonrecourse reverse loan financing liability is comprised of the balance of the nonrecourse debt for the applicable period associated with a non-agency securitization. As the securitization was determined to be an unconsolidated VIE and failed sale treatment, the associated nonrecourse debt is accounted for by FoA and presented separately from the other nonrecourse debts. Refer to Note 5 - Variable Interest Entities and Securitizations for additional information. (2) Nonrecourse commercial loan financing liability is comprised of the balance of the nonrecourse debt for the applicable period associated with a commercial mortgage securitization. As the securitization was determined to be an unconsolidated VIE and failed sale treatment, the associated nonrecourse debt is accounted for by FoA and presented separately from the other nonrecourse debts. Refer to Note 5 - Variable Interest Entities and Securitizations for additional information. Future repayment of nonrecourse debt issued by securitization trusts is dependent on the receipt of cash flows from the corresponding encumbered loans receivable. As of March 31, 2024, estimated maturities for nonrecourse debt for the next five years and thereafter are as follows (in thousands): Year Ending December 31, Estimated Maturities Remainder of 2024 $ 1,277,278 2025 1,539,192 2026 2,825,222 2027 304,009 2028 298,924 Thereafter 2,225,287 Total payments on nonrecourse debt $ 8,469,912 |
Other Financing Lines of Credit
Other Financing Lines of Credit | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Other Financing Lines Of Credit | 11. Other Financing Lines of Credit The following summarizes the components of other financing lines of credit (in thousands): Outstanding borrowings at Maturity Date Interest Rate Collateral Pledged Total Capacity (1) March 31, 2024 December 31, 2023 Reverse Lines: June 2024 - October 2026 Bloomberg short-term First Lien Mortgages $ 932,500 $ 433,829 $ 432,918 Various (2) Bond accrual rate/SOFR + applicable margin Mortgage Related Assets 498,228 482,228 344,367 October 2027 SOFR + applicable margin MSR 70,000 69,231 69,231 October 2024 BSBY + applicable margin Unsecuritized Tails 30,000 28,750 23,620 Subtotal reverse lines of credit $ 1,530,728 $ 1,014,038 $ 870,136 Mortgage Lines: October 2024 BSBY + applicable margin First Lien Mortgages $ 12,500 $ 1,446 $ 2,135 Various (2) Bond accrual rate + applicable margin Mortgage Related Assets 35,707 35,707 36,208 Subtotal mortgage lines of credit $ 48,207 $ 37,153 $ 38,343 Commercial Lines: July 2024 SOFR + applicable margin Mortgage Related Assets $ 20,000 $ 20,000 $ 20,000 Total other financing lines of credit $ 1,598,935 $ 1,071,191 $ 928,479 (1) Capacity is dependent upon maintaining compliance with, or obtaining waivers of, the terms, conditions, and covenants of the respective agreements, including asset-eligibility requirements. Capacity amounts presented are as of March 31, 2024. (2) These lines of credit are tied to the maturity date of the underlying mortgage related assets that have been pledged as collateral. As of March 31, 2024 and December 31, 2023, the weighted average outstanding interest rates on outstanding financing lines of credit of the Company were 6.54% and 6.90%, respectively. The Company’s financing arrangements and credit facilities contain various financial covenants, which primarily relate to required tangible net worth amounts, liquidity reserves, leverage ratios, and profitability. As of March 31, 2024, the Company was in compliance with all of its financial covenants related to required liquidity reserves, debt service coverage ratio, tangible net worth amounts, and required profitability. The terms of the Company’s financing arrangements and credit facilities contain covenants, and the terms of the Company’s government sponsored entities (“GSE”)/seller servicer contracts contain requirements that may restrict FoA Equity and its subsidiaries from paying distributions to its members. These restrictions include restrictions on paying distributions whenever the payment of such distributions would cause FoA Equity or its subsidiaries to no longer be in compliance with any of its financial covenants or GSE requirements. Further, FoA Equity is generally prohibited under Delaware law from making a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of FoA Equity (with certain exceptions) exceed the fair value of its assets. Subsidiaries of FoA Equity are generally subject to similar legal limitations on their ability to make distributions to FoA Equity. As of March 31, 2024, the maximum allowable distributions available to the Company based on the most restrictive of such financial covenant ratios is presented in the table below (in thousands, except for ratios): Financial Covenants Requirement March 31, 2024 Maximum Allowable Distribution (1) FAM Adjusted Tangible Net Worth $ 10,000 $ 10,667 $ 667 Liquidity 1,000 2,300 1,300 FAR Adjusted Tangible Net Worth $ 250,000 $ 474,156 $ 224,156 Liquidity 40,000 42,731 2,731 Leverage Ratio 6:1 3.2:1 219,827 FAH Adjusted Tangible Net Worth $ 220,000 $ 456,467 $ 236,467 Liquidity 40,000 45,763 5,763 Leverage Ratio 10:1 3.7:1 288,165 (1) The Maximum Allowable Distribution for any of the originations subsidiaries is the lowest of the amounts shown for the particular originations subsidiary. As of December 31, 2023, the maximum allowable distributions available to the Company based on the most restrictive of such financial covenant ratios is presented in the table below (in thousands, except for ratios): Financial Covenants Requirement December 31, 2023 Maximum Allowable Distribution (1) FAM Adjusted Tangible Net Worth $ 10,000 $ 15,264 $ 5,264 Liquidity 1,000 2,254 1,254 FAR Adjusted Tangible Net Worth $ 250,000 $ 447,571 $ 197,571 Liquidity 40,000 41,656 1,656 Leverage Ratio 6:1 3.0:1 223,460 FAH Adjusted Tangible Net Worth $ 220,000 $ 446,321 $ 226,321 Liquidity 40,000 45,282 5,282 Leverage Ratio 10:1 3.3:1 297,445 (1) The Maximum Allowable Distribution for any of the originations subsidiaries is the lowest of the amounts shown for the particular originations subsidiary. |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | 12. Litigation The Company’s business is subject to legal proceedings, examinations, investigations, and reviews by various federal, state, and local regulatory and enforcement agencies as well as private litigants such as the Company’s borrowers or former employees. At any point in time, the Company may have open investigations with regulators or enforcement agencies, including examinations and inquiries related to its loan servicing and origination practices. These matters and other pending or potential future investigations, examinations, inquiries, or lawsuits may lead to administrative or legal proceedings, and possibly result in remedies, including fines, penalties, restitution, alterations in business practices, or additional expenses and collateral costs. As a litigation or regulatory matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is probable and estimable. If, at the time of evaluation, the loss contingency is not both probable and reasonably estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and reasonably estimable. Once the matter is deemed to be both probable and reasonably estimable, the Company establishes an accrued liability and records a corresponding amount to litigation related expense. The Company will continue to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established. For certain matters, the Company may consider a loss to be probable but cannot calculate a precise estimate of losses. For these matters, the Company may be able to estimate a range of possible loss. In determining whether it is possible to provide an estimate of loss or range of possible loss, the Company reviews and evaluates its material litigation and regulatory matters on an ongoing basis, in conjunction with any outside counsel handling the matter. As of March 31, 2024, there were no matters that the Company considered to be probable or reasonably possible for which they could estimate losses or a reasonable range of estimated losses. The Company is a defendant in three representative lawsuits alleging violations of the California Labor Code and brought pursuant to the California Private Attorneys General Act (“PAGA”). The cases have been coordinated. On November 4, 2022, the court ordered that each of the plaintiffs’ individual PAGA claims must be arbitrated and that their representative PAGA claims will be stayed pending a ruling by the California Supreme Court in the third-party case Adolph v. Uber Technologies, Inc . On July 17, 2023, the California Supreme Court issued its decision in Adolph , ruling that an order compelling arbitration of individual claims does not strip the plaintiff of standing to litigate the representative portion of the PAGA claim. The Company has settled one of the three individual arbitration claims for a de minimis amount and is in different stages of the remaining two individual arbitration claims. Generally, the representative PAGA claims will remain stayed until the individual claims are resolved. Due to the unpredictable nature of litigation generally, and the wide discretion afforded the Court in awarding civil penalties in PAGA actions, the outcome of these matters cannot be presently determined, and a range of possible losses cannot be reasonably estimated. Although the actions are being vigorously defended, the Company could, in the future, incur judgments or enter into settlements of claims that could have a negative effect on its results of operations in any particular period. Legal expenses, which include, among other things, settlements and the fees paid to external legal service providers, were $0.3 million and $0.9 million for the three months ended March 31, 2024 and 2023 , respectively . These expenses are included in general and administrative expenses in the Condensed Consolidated Statements of Operations. |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. Commitments and Contingencies Servicing of Mortgage Loans The Company has contracted with third-party providers to perform specified servicing functions on its behalf. These services include maintaining borrower contact, facilitating borrower advances, generating borrower statements, collecting and processing payments of interest and principal, and facilitating loss-mitigation strategies in an attempt to keep defaulted borrowers in their homes. The contracts are generally fixed-term arrangements, with standard notification and transition terms governing termination of such contracts. For reverse mortgages, defaults on loans leading to foreclosures may occur if borrowers fail to meet maintenance obligations, such as payment of taxes or home insurance premiums. When a default cannot be cured, the sub-servicers manage the foreclosure process and the filing of any insurance claims with HUD. The sub-servicers have responsibility for remitting timely advances and statements to borrowers and timely and accurate claims to HUD, including compliance with local, state, and federal regulatory requirements. Although the Company has outsourced its servicing function, as the issuer, the Company has responsibility for all aspects of servicing of the HECM loans and related HMBS beneficial interests under the terms of the servicing contracts, state laws, and regulations. Additionally, the sub-servicers are responsible for remitting payments to investors, including interest accrued, interest shortfalls, and funding advances such as taxes and home insurance premiums. Advances are typically remitted by the Company to the sub-servicers on a daily basis. Contractual sub-servicing fees related to sub-servicer arrangements are generally based on a fixed dollar amount per loan and are included in loan servicing expenses in the Condensed Consolidated Statements of Operations. Unfunded Commitments The Company is required to fund further borrower advances (where the borrower has not fully drawn down the HECM, non-agency reverse mortgage, or commercial mortgage loan proceeds available) and fund the payment of the borrower’s obligation to pay FHA monthly insurance premiums for HECM loans. The outstanding unfunded commitments available to borrowers related to agency and non-agency reverse mortgage loans were $4.5 billion as of both March 31, 2024 and December 31, 2023. The outstanding unfunded commitments available to borrowers related to commercial mortgage loans were $14.9 million as of March 31, 2024 compared to $21.4 million as of December 31, 2023. This additional borrowing capacity is primarily in the form of undrawn lines of credit. The Company also has commitments to purchase loans totaling $1.4 million as of March 31, 2024, compared to $4.7 million as of December 31, 2023. Mandatory Repurchase Obligation The Company is required to repurchase reverse loans out of the Ginnie Mae securitization pools once the outstanding principal balance of the related HECM is equal to or greater than 98% of the MCA. Performing repurchased loans are typically conveyed to HUD and nonperforming repurchased loans are generally liquidated in accordance with program requirements. Loans are considered nonperforming upon events including, but not limited to, the death of the mortgagor, the mortgagor no longer occupying the property as their principal residence, or the property taxes or insurance are not being paid. As an issuer of HMBS, the Company also has the option to repurchase reverse loans out of the Ginnie Mae securitization pools without prior approval from Ginnie Mae in certain instances. These situations include the borrower requesting an additional advance that causes the outstanding principal balance to be equal to or greater than 98% of the MCA; the borrower’s loan becoming due and payable under certain circumstances; the borrower not occupying the home for greater than twelve consecutive months for physical or mental illness, and the home is not the residence of another borrower; or the borrower failing to perform in accordance with the terms of the loan. For each HECM loan that the Company securitizes into agency HMBS, the Company is required to covenant and warrant to Ginnie Mae, among other things, that the HECM loans related to each participation included in the agency HMBS are eligible under the requirements of the National Housing Act and the Ginnie Mae MBS Guide, and that the Company will take all actions necessary to ensure the HECM loan’s continued eligibility. The Ginnie Mae HMBS program requires that the Company removes the participation related to any HECM loan that does not meet the requirements of the Ginnie Mae MBS Guide. In addition to securitizing HECM loans into agency HMBS, the Company may sell HECM loans to third parties, and the agreements with such third parties include standard representations and warranties related to such loans, which if breached, may require the Company to repurchase the HECM loan and/or indemnify the purchaser for losses related to such HECM loans. In the case where the Company repurchases the loan, the Company bears any subsequent credit loss on the loan. To the extent that the Company is required to remove a loan from an agency HMBS, purchase a loan from a third-party or indemnify a third-party, the potential losses suffered by the Company may be reduced by any recourse the Company has to the originating broker and/or correspondent lender, if applicable, to the extent such entity breached similar or other representations and warranties. Under most circumstances, the Company has the right to require the originating broker/correspondent to repurchase the related loan from the Company and/or indemnify the Company for losses incurred. The Company seeks to manage the risk of repurchase and associated credit exposure through the Company’s underwriting and quality assurance practices. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income Taxes The Company’s effective tax rate on continuing operations for the three months ended March 31, 2024 differs from the U.S. federal statutory rate primarily due to anticipated state statutory income tax rates, the projected mix of earnings or loss attributable to the noncontrolling interest, the impact of discrete tax items, and changes in the valuation allowance against net deferred tax assets. The Company’s effective tax rate on continuing operations for the three months ended March 31, 2023 differs from the U.S. federal statutory rate primarily due to anticipated state statutory income tax rates, the projected mix of earnings or loss attributable to the noncontrolling interest, the impact of discrete tax items, and changes in the valuation allowance against net deferred tax assets. FoA is taxed as a corporation and is subject to U.S. federal, state, and local taxes on the income allocated to it from FoA Equity based upon FoA’s economic interest in FoA Equity as well as any stand-alone income it generates. FoA Equity and its disregarded subsidiaries, collectively, are treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, FoA Equity is not subject to U.S. federal and certain state and local income taxes. FoA Equity’s members, including FoA, are liable for U.S. federal, state, and local income taxes based on their allocable share of FoA Equity’s pass-through taxable income. FoA Equity wholly-owned certain corporate subsidiaries in 2023 that were regarded entities for tax purposes and subject to U.S. federal, state, and local taxes on income they generated. As such, the consolidated tax provision of FoA included corporate taxes that it incurred based on its flow-through income from FoA Equity, as well as corporate taxes that were incurred by its regarded subsidiaries. Deferred income taxes reflect the net tax effects of temporary differences between the carrying value of assets and liabilities for financial reporting purposes and the amounts reported for income tax purposes. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences attributable to those temporary differences and the expected benefits of net operating losses and carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and recent results of operations. As of March 31, 2024, due to current year operating results and forecasted taxable income or losses, management has maintained their assessment that the existing taxable temporary differences that will reverse through the course of ordinary business will not more-likely-than-not generate sufficient taxable income to utilize the current attributes. Therefore, a valuation allowance for the deferred tax asset in excess of deferred tax liabilities has been maintained. Management also determined that the future sources of taxable income from reversing temporary differences that comprise the investment in FoA Equity deferred tax liability would only be fully realized until sale of FoA’s interest in FoA Equity. Accordingly, the deferred tax liability from investment in FoA Equity has been treated as an indefinite-lived intangible and is limited by the federal net operating loss utilization rules. Tax positions taken in tax years that remain open under the statute of limitations will be subject to examinations by tax authorities. With few exceptions, the Company is no longer subject to state or local examinations by tax authorities for tax years ended December 31, 2019 or prior. |
Business Segment Reporting
Business Segment Reporting | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Business Segment Reporting | 15. Business Segment Reporting The following tables are a presentation of financial information by segment (in thousands): For the three months ended March 31, 2024 Retirement Solutions Portfolio Management Total Reportable Segments Corporate and Other Eliminations Total REVENUES Net fair value gains on loans and related obligations $ 39,657 $ 52,978 $ 92,635 $ — $ — $ 92,635 Fee income 6,127 232 6,359 — (123) 6,236 Gain (loss) on sale and other income from loans held for sale, net (76) 162 86 — — 86 Net interest expense: Interest income — 3,945 3,945 321 — 4,266 Interest expense — (20,068) (20,068) (8,473) — (28,541) Net interest expense — (16,123) (16,123) (8,152) — (24,275) Total revenues 45,708 37,249 82,957 (8,152) (123) 74,682 Total expenses 49,410 22,753 72,163 19,275 (123) 91,315 Impairment of other assets — — — (600) — (600) Other, net (174) — (174) 1,627 — 1,453 Net income (loss) before taxes $ (3,876) $ 14,496 $ 10,620 $ (26,400) $ — $ (15,780) Depreciation and amortization $ 9,488 $ 8 $ 9,496 $ 182 $ — $ 9,678 Total assets $ 268,786 $ 27,357,160 $ 27,625,946 $ 1,455,417 $ (1,405,085) $ 27,676,278 For the three months ended March 31, 2023 Retirement Solutions Portfolio Management Total Reportable Segments Corporate and Other Eliminations Total REVENUES Net fair value gains on loans and related obligations $ 24,475 $ 151,919 $ 176,394 $ — $ — $ 176,394 Fee income 3,180 5,463 8,643 2,953 (5,244) 6,352 Loss on sale and other income from loans held for sale, net (1,312) (11,058) (12,370) — (56) (12,426) Net interest expense: Interest income — 1,470 1,470 621 — 2,091 Interest expense — (23,996) (23,996) (7,560) — (31,556) Net interest expense — (22,526) (22,526) (6,939) — (29,465) Total revenues 26,343 123,798 150,141 (3,986) (5,300) 140,855 Total expenses 35,524 24,679 60,203 28,874 (5,300) 83,777 Other, net 31 — 31 905 — 936 Net income (loss) before taxes $ (9,150) $ 99,119 $ 89,969 $ (31,955) $ — $ 58,014 Depreciation and amortization $ 9,643 $ 14 $ 9,657 $ 448 $ — $ 10,105 Total assets $ 296,417 $ 26,327,259 $ 26,623,676 $ 1,912,801 $ (1,861,938) $ 26,674,539 |
Liquidity and Capital Requireme
Liquidity and Capital Requirements | 3 Months Ended |
Mar. 31, 2024 | |
Regulatory Capital Requirements under Banking Regulations [Abstract] | |
Liquidity And Capital Requirements | 16. Liquidity and Capital Requirements Compliance Requirements FAR As an issuer of HMBS, FAR is subject to minimum net worth, liquidity, and leverage requirements as well as minimum insurance coverage established by Ginnie Mae. The net worth required is $5.0 million plus 1% of FAR’s outstanding HMBS and unused commitment authority from Ginnie Mae. The liquidity requirement is for 20% of FAR’s required net worth to be in the form of cash or cash equivalent assets. The leverage requirement is to maintain a ratio of net worth to total assets of not less than 6%. As of March 31, 2024, FAR was in compliance with the minimum net worth, liquidity, capitalization levels, and insurance requirements of Ginnie Mae. The minimum net worth required of FAR by Ginnie Mae was $177.1 million as of March 31, 2024. FAR’s actual net worth calculated based on Ginnie Mae guidance was $466.2 million as of March 31, 2024. The minimum liquidity required of FAR by Ginnie Mae was $35.4 million as of March 31, 2024. FAR’s actual cash and cash equivalents were $42.7 million as of March 31, 2024. FAR’s actual ratio of net worth to total assets was below the Ginnie Mae requirement; however, FAR received a waiver for the minimum outstanding capital requirements from Ginnie Mae. Therefore, the Company was in compliance with all Ginnie Mae requirements. In addition, FAR is required to maintain both fidelity bond and errors and omissions insurance coverage at tiered levels based on the aggregate UPB of the loans serviced by FAR throughout the year. FAR is required to conduct compliance testing at least quarterly to ensure compliance with the foregoing requirements. As of March 31, 2024, FAR was in compliance with applicable requirements. FAM In connection with the discontinued operations of the Company’s previously reported Mortgage Originations segment, FAM has surrendered many of its mortgage origination licenses and it is expected that FAM will be in a position to surrender its remaining licenses and approvals by the end of the second quarter of 2024. Until such time, FAM is required to maintain licenses and approvals needed to wind-down the remaining portfolio of mortgage servicing rights and therefore is subject to the requirements described below until such time that the respective licenses and approvals have been surrendered. In addition to the covenant requirements of FAM mentioned in Note 11 - Other Financing Lines of Credit, FAM is subject to various capital requirements administered by Fannie Mae and Freddie Mac, which sponsor programs that govern a significant portion of FAM’s mortgage loans sold and servicing activities. Additionally, FAM is required to maintain minimum net worth requirements for many of the states in which it sells and services loans. Each state has its own minimum net worth requirement; however, none of the state requirements are material to the condensed consolidated financial statements. Failure to meet minimum capital requirements can result in certain mandatory remedial actions and potentially result in additional discretionary remedial actions by regulators that, if undertaken, could: (i) remove FAM’s ability to sell and service loans to or on behalf of the agencies; and (ii) have a direct material effect on FAM’s financial statements, results of operations, and cash flows. In accordance with the regulatory capital guidelines, FAM must meet specific quantitative measures of cash, assets, liabilities, profitability, and certain off-balance sheet items calculated under regulatory accounting practices. Further, changes in regulatory and accounting standards, as well as the impact of future events on FAM’s results, may significantly affect FAM’s net worth adequacy. Among FAM’s various capital requirements related to its outstanding mortgage origination and servicing agreements, the most restrictive of these relates to Fannie Mae’s and Freddie Mac’s capital ratio requirement, which requires FAM to maintain a minimum adjusted net worth balance at the end of the most recent fiscal quarter of $10.1 million as of March 31, 2024. FAM’s actual net worth was $10.3 million as of March 31, 2024. However, as of March 31, 2024, FAM was in violation of Fannie Mae’s material decline in lender tangible net worth covenants. In connection with the discontinued operations of the Company’s previously reported Mortgage Originations segment, FAM voluntarily surrendered its Fannie Mae selling approval effective June 30, 2023, and further, FAM has agreed with Fannie Mae, Freddie Mac, and Ginnie Mae to surrender its related approvals as well as its HUD mortgagee approval once the transfer of servicing of FAM’s last mortgage loans related to such GSE/agency has been completed, which was complete as of March 31, 2024 with respect to Ginnie Mae and HUD and is expected to be complete in the second quarter of 2024 with respect to Fannie Mae and Freddie Mac. FAM has one remaining warehouse debt arrangement and remains in compliance with the financial covenants relating to such arrangement. In addition, FAM is required to maintain both fidelity bond and errors and omissions i nsurance coverage at tiered levels based on the aggregate UPB of the loans serviced by FAM throughout the year. FAM is required to conduct compliance testing at least quarterly to ensure compliance with the foregoing requirements . As of March 31, 2024, FAM was in compliance with applicable requirements. FoA Securities Finance of America Securities LLC (“FoA Securities”), one of the operating service subsidiaries of Incenter, operates in a highly regulated environment and is subject to federal and state laws, SEC rules, and Financial Industry Regulatory Authority rules and guidance. Applicable laws and regulations restrict permissible activities and require compliance with a wide range of financial and customer-related protections. The consequences of noncompliance can include substantial monetary and nonmonetary sanctions. In addition, FoA Securities is subject to comprehensive examination by its regulators. These regulators have broad discretion to impose restrictions and limitations on the operations of the Company and to impose sanctions for noncompliance. FoA Securities is subject to the SEC’s Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of minimum net capital. FoA Securities computes net capital under the alternative method. Under this method, the required minimum net capital is equal to $250 thousand. As of March 31, 2024, FoA Securities met the minimum net capital requirement amounts and was, therefore, in compliance. Additionally, FoA Securities claims the exemption provision of Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 because FoA Securities other business activities are limited to (1) proprietary trading; (2) receiving transaction-based compensation for referring securities transactions to other broker-dealers; and (3) participating in distributions of securities (other than firm commitment underwritings) in accordance with the requirements of paragraphs (a) or (b)(2) of Rule 15c2-4. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 17. Related-Party Transactions Promissory Notes The Company had two Revolving Working Capital Promissory Note Agreements (the “Working Capital Promissory Notes”) outstanding with BTO Urban Holdings and Libman Family Holdings, LLC, a Delaware limited liability company which are deemed affiliates of the Company. Amounts under the Working Capital Promissory Notes may be re-borrowed and repaid from time to time until the relate d maturity date. The Working Capital Promissory Notes accrue interest monthly at a rate of 10.0% per annum, which will increase to 15.0% per annum on May 15, 2024, and mature in May 2025. These notes had outstanding amounts of $84.6 million and $59.1 million as of March 31, 2024 and December 31, 2023, respectively, recorded within notes payable, net, in the Condensed Consolidated Statements of Financial Condition. Additionally, the Company paid $1.2 million and $0.4 million of interest related to the Working Capital Promissory Notes for the three months ended March 31, 2024 and 2023 , respectively. Senior Notes Related parties of FoA purchased notes in the high-yield debt offering in November 2020 in an aggregate principal amount of $135.0 million. Equity Investment On December 6, 2022, the Company entered into separate Stock Purchase Agreements (each, a “Stock Purchase Agreement”) with each of (i) BTO Urban Holdings L.L.C., Blackstone Family Tactical Opportunities Investment Partnership – NQ ESC L.P. and BTO Urban Holdings II L.P. (collectively, the “Blackstone Investor”) and (ii) Libman Family Holdings LLC (the “BL Investor” and together with the Blackstone Investor, the “Investors”). Pursuant to each such Investor’s respective Stock Purchase Agreement, on the terms and subject to the conditions set forth therein, each of the Investors will purchase 10,869,566 shares of Company Class A Common Stock for an aggregate purchase price of $15.0 million, representing a price per share of Company Class A Common Stock equal to the volume weighted average price per share of Company Class A Common Stock on the New York Stock Exchange over the fifteen consecutive trading days ending on December 6, 2022. On March 31, 2023, in conjunction with the closing of the AAG Transaction, the 21,739,132 shares of Company Class A Common Stock were issued to the Investors for $30.0 million. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 18. Earnings Per Share The following tables reconcile the numerators and denominators used in the computations of both basic and diluted net income (loss) per share (in thousands, except share data): For the three months ended March 31, 2024 For the three months ended March 31, 2023 Basic net income (loss) per share: Numerator Net income (loss) from continuing operations $ (15,780) $ 55,482 Less: Income (loss) from continuing operations attributable to noncontrolling interest (1) (10,145) 36,755 Net income (loss) from continuing operations attributable to holders of Class A Common Stock - basic $ (5,635) $ 18,727 Net loss from discontinued operations $ (4,524) $ (40,890) Less: Loss from discontinued operations attributable to noncontrolling interest (1) (2,621) (25,217) Net loss from discontinued operations attributable to holders of Class A Common Stock - basic $ (1,903) $ (15,673) Denominator Weighted average shares of Class A Common Stock outstanding - basic 96,485,585 64,016,845 Basic net income (loss) per share Continuing operations $ (0.06) $ 0.29 Discontinued operations (0.02) (0.24) Basic net income (loss) per share $ (0.08) $ 0.05 (1) The Class A LLC Units of FoA Equity, held by the Continuing Unitholders and AAG/Bloom (collectively “Equity Capital Unitholders”), which comprise the noncontrolling interest in the Company, represents a participating security. Therefore, the numerator was adjusted to reduce net income (loss) by the amount of net income (loss) attributable to noncontrolling interest. Additionally, the Class B Common Stock does not participate in earnings or losses of the Company and, therefore, is not a participating security. The Class B Common Stock has not been included in either the basic or diluted net income (loss) per share calculations. Net income (loss) attributable to noncontrolling interest includes an allocation of expense related to the Amended and Restated Long-Term Incentive Plan (“A&R MLTIP”) subject to special allocation terms per the Amended and Restated Limited Liability Company Agreement (“A&R LLC Agreement”). For the three months ended March 31, 2024 For the three months ended March 31, 2023 Diluted net income (loss) per share: Numerator Net income (loss) from continuing operations attributable to holders of Class A Common Stock - basic $ (5,635) $ 18,727 Reallocation of net income from continuing operations assuming exchange of Class A LLC Units (1) — 23,328 Net income (loss) from continuing operations attributable to holders of Class A Common Stock - diluted $ (5,635) $ 42,055 Net loss from discontinued operations attributable to holders of Class A Common Stock - basic $ (1,903) $ (15,673) Reallocation of net loss from discontinued operations assuming exchange of Class A LLC Units (1) — (12,470) Net loss from discontinued operations attributable to holders of Class A Common Stock - diluted $ (1,903) $ (28,143) Denominator Weighted average shares of Class A Common Stock outstanding - basic 96,485,585 64,016,845 Effect of dilutive securities: Assumed exchange of weighted average Class A LLC Units for shares of Class A Common Stock (2) — 124,159,953 Forward sale share contracts - dilutive shares under the treasury stock method — 2,124,214 Weighted average shares of Class A Common Stock outstanding - diluted (3) 96,485,585 190,301,012 Diluted net income (loss) per share Continuing operations $ (0.06) $ 0.22 Discontinued operations (0.02) (0.15) Diluted net income (loss) per share $ (0.08) $ 0.07 (1) For the three months ended March 31, 2024, the effect of the elimination of the noncontrolling interest due to the assumed exchange of all Class A LLC Units outstanding for shares of Class A Common Stock in FoA was determined to be anti-dilutive under the if-converted method. As such, the effect has been excluded from the calculation of diluted net income (loss) per share. For the three months ended March 31, 2023, this adjustment assumes the reallocation of noncontrolling interest earnings, on an after-tax basis, due to the assumed exchange of all Class A LLC Units outstanding for shares of Class A Common Stock in FoA as of the beginning of the period following the if-converted method for calculating diluted net income (loss) per share. Following the terms of the A&R LLC Agreement, the Class A LLC unitholders will bear approximately 85% of the cost of any vesting associated with the Replacement RSUs and Earnout Right RSUs prior to any distribution by the Company to such Class A LLC unitholders. The remaining compensation cost associated with the Replacement RSUs and Earnout Right RSUs will be born by FoA. As a result of the application of the if-converted method in arriving at diluted net income (loss) per share, the entirety of the compensation cost associated with vesting of the Replacement RSUs and Earnout Right RSUs is assumed to be included in the net income (loss) attributable to holders of the Company’s Class A Common Stock. (2) The Exchange Agreement allows for the exchange of Class A LLC Units held by Equity Capital Unitholders, representing the noncontrolling interest, on a one-for-one basis for shares of Class A Common Stock in FoA. The 132,947,368 weighted average Class A LLC Units outstanding for the three months ended March 31, 2024 were determined to be anti-dilutive under the if-converted method and have been excluded from the computation of diluted net income (loss) per share. For the three months ended March 31, 2023, the diluted weighted average shares outstanding of Class A Common Stock includes the effects of the if-converted method to reflect the provisions of the Exchange Agreement and assumes the Class A LLC Units held by Equity Capital Unitholders, representing the noncontrolling interest, exchange their units on a one-for-one basis for shares of Class A Common Stock in FoA. (3) As part of the AAG Transaction, there are two forms of contingently issuable Class A LLC Units: 7,058,416 Units that are equity classified and indemnity holdback units totaling up to 7,142,260 Units that are liability classified. In accordance with ASC 260, Earnings Per Share, these units are not included in the diluted weighted average shares outstanding of Class A Common Stock for the three months ended March 31, 2024 and 2023. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Equity | 19. Equity Class A Common Stock As of March 31, 2024, there were 100,820,259 shares of Class A Common Stock issued, consisting of 96,561,759 shares issued and outstanding and 4,258,500 unvested shares that are subject to vesting and forfeiture. The 4,258,500 unvested shares of Class A Common Stock relate to the Sponsor Earnout. The 4,258,500 unvested shares of Class A Common Stock are not entitled to receive any dividends or other distributions, do not have any other economic rights until such shares are vested, and will not be entitled to receive back dividends or other distributions or any other form of economic “catch-up” if, and when, they become vested. The holders of the 96,561,759 issued and outstanding shares of Class A Common Stock represent the controlling interest of the Company. Pursuant to the A&R MLTIP, certain equity holders of FoA and FoA Equity are obligated to deliver a number of shares of Class A Common Stock and Class A LLC Units for restricted stock unit awards granted by the Company. During the three months ended March 31, 2024 and 2023, in connection with FoA’s settlement of restricted stock units into shares of Class A Common Stock and pursuant to the A&R MLTIP, these equity holders delivered 14,913 and 98,424 shares, respectively, of Class A Common Stock and 88,289 and 582,698 Class A LLC Units, respectively, to the Company in satisfaction of such settlement. The delivery of shares of Class A Common Stock and Class A LLC Units to the Company offset the gross award of RSUs settled. During the three months ended March 31, 2024 and 2023, the Company elected to retire 139,730 and 292,360 shares, respectively, offsetting RSUs withheld to fund employee payroll taxes and instead funded those taxes with operating cash. The future settlement of the Replacement RSUs and Earnout Rights outstanding as of March 31, 2024 will also be funded by the delivery of Class A Common Stock and Class A LLC Units from certain equity holders of FoA and FoA Equity pursuant to the A&R MLTIP. Pursuant to the Exchange Agreement, which AAG/Bloom became a party to on March 31, 2023, the Equity Capital Unitholders may elect to exchange their Class A LLC Units for shares of Class A Common Stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. During the three months ended March 31, 2024 and 2023, in connection with FoA’s settlement of the exchange of Class A LLC Units for shares of Class A Common Stock and pursuant to the Exchange Agreement, certain equity holders delivered 618 and 3,601 Class A LLC Units, respectively, to the Company in exchange for the same number of shares of Class A Common Stock, respectively, in satisfaction of such settlement. Class B Common Stock As of March 31, 2024, there are 15 shares of Class B Common Stock outstanding, all holders of which are Class A LLC Unit holders. The Class B Common Stock, par value $0.0001 per share, has no economic rights but entitles each holder of at least one such share (regardless of the number of shares so held) to a number of votes that is equal to the aggregate number of Class A LLC Units held by such holder on all matters on which Class A Common Stock holders are entitled to vote. In consideration for the assets acquired on March 31, 2023, the Company issued to the Seller one share of Class B Common Stock (see Note 3 - Acquisitions). Class A LLC Units The Exchange Agreement sets forth the terms and conditions upon which holders of Class A LLC Units may exchange their Class A LLC Units for shares of Class A Common Stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. The Equity Capital Unitholders’ ownership of Class A LLC Units represents the noncontrolling interest of the Company, which is accounted for as permanent equity in the Condensed Consolidated Statements of Financial Condition. As of March 31, 2024, there were 229,443,668 Class A LLC Units outstanding. Of the 229,443,668 Class A LLC Units outstanding, 96,561,759 are held by the Class A Common Stock shareholders and 132,881,909 are held by the noncontrolling interest of the Company. Of the 19,692,990 Class A LLC Units issued to AAG/Bloom in consideration for the assets acquired on March 31, 2023, AAG/Bloom delivered 8,000,000 Class A LLC Units to the Company in exchange for the same number of shares of Class A Common Stock during the year ended December 31, 2023. Additionally, AAG/Bloom is entitled to equity consideration comprised of two forms of contingently issuable Class A LLC Units: 7,058,416 Units that are equity classified and indemnity holdback units totaling up to 7,142,260 Units that are liability classified (see Note 3 - Acquisitions). |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements comprise the financial statements of FoA and its controlled subsidiaries. The condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial statements and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). The accompanying financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of its financial condition as of March 31, 2024 and its results of operations and cash flows for the three months ended March 31, 2024 and 2023 . The Condensed Consolidated Statement of Financial Condition at December 31, 2023 was derived from audited financial statements but does not contain all of the footnote disclosures from the annual financial statements. Operating results for the interim periods are not necessarily indicative of the results that may be expected for any future period or for the full year. The condensed consolidated financial statements, including the significant accounting policies, should be read in conjunction with the consolidated financial statements and notes as of and for the year ended December 31, 2023 within the Company’s Annual Report on Form 10-K. The significant accounting policies, together with the other Notes to Condensed Consolidated Financial Statements, are an integral part of the condensed consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates regarding loans held for investment, subject to HMBS related obligations, loans held for investment, subject to nonrecourse debt, loans held for investment, HMBS related obligations, and nonrecourse debt are particularly subject to change. Actual results may differ from those estimates and assumptions due to factors such as changes in the economy, interest rates, secondary market pricing, prepayment assumptions, home prices, or discrete events affecting specific borrowers, and such differences could be material. |
Recently Issued Accounting Guidance, Not Yet Adopted | Recently Issued Accounting Guidance, Not Yet Adopted as of March 31, 2024 Standard Description Date of Planned Adoption Effect on Condensed Consolidated Financial Statements Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07 which requires disclosures of significant reportable expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. We are currently evaluating the impact that this guidance will have on the disclosures within our financial statements, and expect to adopt this ASU for the year ending December 31, 2024. This ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09 that enhances income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and by requiring disclosure of the amount of income taxes paid disaggregated by federal, state, and foreign taxes, as well as disaggregated by material individual jurisdictions. We are currently evaluating the impact that this guidance will have on the disclosures within our financial statements, and expect to adopt this ASU for the year ending December 31, 2025. This ASU is effective for annual periods beginning after December 15, 2024. Adoption of this ASU should be applied on a prospective basis, but retrospective application is permitted. Early adoption is permitted. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of the consideration transferred and the major classes of assets acquired and liabilities assumed in relation to the March 31, 2023 acquisition (in thousands): Consideration transferred: FoA Class B Common Stock (1) (Note 19 - Equity) $ — Cash consideration (2) 3,100 Notes payable to Seller 4,500 Pay off indebtedness (2) 136,984 Initial equity consideration – Class A LLC Units (3) (Note 19 - Equity) 24,419 Deferred equity consideration – Class A LLC Units (4) (Note 19 - Equity) 13,137 Other liabilities assumed 8,429 Buyer transaction expenses (2) 770 Forgiveness of bridge working capital notes payable 24,034 Total cost $ 215,373 Assets acquired: Loans held for investment, subject to HMBS related obligations $ 5,448,712 Loans held for investment 138,270 Fixed assets and leasehold improvements 2,400 Right-of-use leased assets 491 Other assets 6,270 Total assets acquired $ 5,596,143 Liabilities assumed: HMBS related obligations $ 5,354,372 Operating lease liabilities 492 Payables and other liabilities 25,906 Total liabilities assumed 5,380,770 Net identifiable assets acquired $ 215,373 (1) The Seller owns one share of FoA Class B Common Stock. Class B Common Stock has no economic rights but entitles each holder of at least one such share (regardless of the number of shares held) to a number of votes that is equal to the aggregate number of units of FoA Equity (“Class A LLC Units”) held by the holder on all matters on which Class A Common Stockholders are entitled to vote. The fair value of the Class B Common Stock was determined to be negligible as there are no economic rights associated with the Class B Common Stock. (2) Amounts represent the cash portion of the consideration paid to acquire the net assets of AAG/Bloom. Total cash consideration was $140.9 million. (3) At the closing of the AAG Transaction, FoA Equity issued 19,692,990 Class A LLC Units to the Seller, which hold 1:1 conversion rights for Class A Common Stock of FoA. At the closing date, the fair value of these Class A LLC Units were equal to the Class A Common Stock share price of $1.24 per share. (4) The deferred equity consideration is comprised of two forms of issuable Class A LLC Units; 7,058,416 units with a fair value of $8.7 million that are equity classified and indemnity holdback units totaling up to 7,142,260 units as of the acquisition date with a fair value of $4.4 million that are liability classified. The deferred equity consideration that is liability classified is recorded in payables and other liabilities in the Condensed Consolidated Statements of Financial Condition. two |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The following table summarizes the major classes of assets and liabilities classified as discontinued operations as of March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Assets Other assets, net $ 7,290 $ 6,721 Liabilities Payables and other liabilities 20,647 18,304 The following table summarizes the major components of net loss from discontinued operations (in thousands): For the three months ended March 31, 2024 For the three months ended March 31, 2023 Revenues Net fair value gains on loans and related obligations $ — $ 308 Fee income — 32,628 Gain on sale and other income from loans held for sale, net — 396 Net interest expense: Interest income — 517 Interest expense — (820) Net interest expense — (303) Total revenues — 33,029 Expenses Salaries, benefits, and related expenses — 30,851 Loan production and portfolio related expenses — 1,037 Marketing and advertising expenses — 540 Depreciation and amortization — 2,778 General and administrative expenses 1,524 25,150 Total expenses 1,524 60,356 Impairment of other assets (1) — (1,055) Other, net (2) (3,000) (9,089) Net loss from discontinued operations before income taxes (4,524) (37,471) Provision for income taxes from discontinued operations — 3,419 Net loss from discontinued operations (4,524) (40,890) Net loss from discontinued operations attributable to noncontrolling interest (2,621) (25,217) Net loss from discontinued operations attributable to controlling interest $ (1,903) $ (15,673) (1) The Company evaluates the carrying value of long-lived assets, including fixed assets, leasehold improvements as well as right-of-use assets in operating leases when indicators of impairment exist in accordance with Accounting Standards Codification (“ASC”) 360, Property, Plant, and Equipment. Based on the analysis, the Company recognized an impairment charge in the three months ended March 31, 2023, related to the sale of the previously reported Commercial Originations segment. (2) Includes a $3.0 million contingent liability related to our discontinued operations for the three months ended March 31, 2024 and a $10.2 million loss on the sale of our commercial originations operational assets for the three months ended March 31, 2023. The Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 included the following material activities related to discontinued operations (in thousands): For the three months ended March 31, 2024 For the three months ended March 31, 2023 Gain on sale and other income from loans held for sale, net $ — $ 396 Unrealized fair value changes on loans, related obligations, and derivatives — 308 Impairment of other assets — 1,055 Depreciation and amortization — 2,778 Acquisition of fixed assets — 1,815 |
Variable Interest Entities an_2
Variable Interest Entities and Securitizations (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The following table presents the assets and liabilities of the Company’s consolidated VIEs, which are included in the Condensed Consolidated Statements of Financial Condition, and excludes intercompany balances, except for retained bonds and beneficial interests (in thousands): March 31, 2024 December 31, 2023 ASSETS Restricted cash $ 183,490 $ 168,010 Loans held for investment, subject to nonrecourse debt, at fair value 8,026,026 7,881,566 Other assets, net 56,386 68,178 TOTAL ASSETS $ 8,265,902 $ 8,117,754 LIABILITIES Nonrecourse debt, at fair value $ 8,015,402 $ 7,859,065 Payables and other liabilities 501 546 TOTAL VIE LIABILITIES 8,015,903 7,859,611 Retained bonds and beneficial interests eliminated in consolidation (478,412) (327,653) TOTAL CONSOLIDATED LIABILITIES $ 7,537,491 $ 7,531,958 The tables below present a summary of the unconsolidated VIEs for which the Company holds variable interests (in thousands). March 31, 2024 Carrying value Assets Liabilities Maximum exposure to loss Total assets in VIEs Transfers of loans - sale treatment Retained interests $ 50,124 $ — $ 50,124 $ 996,999 Transfers of loans - secured borrowing Loans and nonrecourse liability 388,565 367,582 20,983 388,565 TOTAL $ 438,689 $ 367,582 $ 71,107 $ 1,385,564 December 31, 2023 Carrying value Assets Liabilities Maximum exposure to loss Total assets in VIEs Transfers of loans - sale treatment Retained interests $ 50,774 $ — $ 50,774 $ 1,008,152 Transfers of loans - secured borrowing Loans and nonrecourse liability 389,557 368,343 21,214 389,557 TOTAL $ 440,331 $ 368,343 $ 71,988 $ 1,397,709 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement inputs and valuation techniques | Following are descriptions of the valuation methodologies used to measure material assets and liabilities at fair value and the details of the valuation models, key inputs to those models, and significant assumptions utilized. Within the assumption tables presented, not meaningful (“NM”) refers to a range of inputs that is too broad to provide meaningful information to the user or to an input that has no range and consists of a single data point. Instrument Valuation techniques Classification of Fair Value Hierarchy Assets Loans held for investment, subject to HMBS related obligations (1) HECM loans - securitized into Ginnie Mae HMBS These loans are valued utilizing a present value methodology that discounts estimated projected cash flows over the life of the loan portfolio using conditional prepayment rate (“CPR”), loss frequency, loss severity, borrower draw, and discount rate assumptions. Level 3 Loans held for investment, subject to nonrecourse debt (1) HECM buyouts - securitized (nonperforming) These loans are valued utilizing a present value methodology that discounts estimated projected cash flows over the life of the portfolio using CPR, loss frequency, loss severity, and discount rate assumptions. Level 3 HECM buyouts - securitized (performing) These loans are valued utilizing a present value methodology that discounts estimated projected cash flows over the life of the portfolio using weighted average remaining life (“WAL”), CPR, loss severity, and discount rate assumptions. Level 3 Non-agency reverse mortgage loans - securitized These loans are valued utilizing a present value methodology that discounts estimated projected cash flows over the life of the portfolio using WAL, loan-to-value (“LTV”), CPR, loss severity, home price appreciation (“HPA”), and discount rate assumptions. Level 3 Commercial mortgage loans - securitized This product is valued using a discounted cash flow model utilizing a single monthly mortality prepayment rate (“SMM”), discount rate, and loss rate assumptions. Level 3 (1) The Company aggregates loan portfolios based on the underlying securitization trust and values these loans using these aggregated pools. The range of inputs provided is based on the range of inputs utilized for each securitization trust. Loans held for investment Inventory buyouts The fair value of repurchased loans is based on expected cash proceeds of the liquidation of the underlying properties and expected claim proceeds from HUD. The primary assumptions utilized in valuing nonperforming repurchased loans include CPR, loss frequency, loss severity, and discount rate. Termination proceeds are adjusted for expected loss frequencies and severities to arrive at net proceeds that will be provided upon final resolution, including assignments to FHA. Historical experience is utilized to estimate the loss rates resulting from scenarios where FHA insurance proceeds are not expected to cover all principal and interest outstanding and, as servicer, the Company is exposed to losses upon resolution of the loan. Level 3 Non-agency reverse mortgage loans The fair value of non-agency reverse mortgage loans is based on values for investments with similar investment grade ratings and the value the Company would expect to receive if the whole loans were sold to an investor. The Company values non-agency reverse mortgage loans utilizing a present value methodology that discounts estimated projected cash flows over the life of the loan portfolio. The primary assumptions utilized in valuing the loans include WAL, LTV, CPR, loss severity, HPA, and discount rate. Level 3 Commercial mortgage loans This product is valued using a discounted cash flow (“DCF”) model with SMM, discount rate, and constant default rate (“CDR”) assumptions. Level 3 Other assets Loans held for sale - residential mortgage loans This includes all mortgage loans that can be sold to the agencies, which are valued predominantly by published forward agency prices. This will also include all non-agency loans where recently negotiated market prices for the loan pool exist with a counterparty (which approximates fair value), or quoted market prices for similar loans are available. Level 2 Retained bonds Management obtains third-party valuations to assess the reasonableness of the fair value calculations provided by the internal valuation model. The primary assumptions utilized include WAL and discount rate. Level 3 MSR The Company valued MSR internally through a DCF analysis and calculated using a pricing model. This pricing model is based on the objective characteristics of the portfolio (loan amount, note rate, etc.) and commonly used industry assumptions such as discount rate and weighted average CPR. The range and weighted average of the unobservable inputs of MSR are not meaningful at March 31, 2024 or December 31, 2023. Level 3 Liabilities HMBS related obligations HMBS related obligations The estimated fair value is based on the net present value of projected cash flows over the estimated life of the liability. The estimated fair value of the HMBS related obligations also includes the consideration required by a market participant to transfer the HECM and HMBS servicing obligations, including exposure resulting from shortfalls in FHA insurance proceeds as well as assumptions that it believes a market participant would consider in valuing the liability, including, but not limited to, assumptions for repayment, costs to transfer servicing obligations, shortfalls in FHA insurance proceeds, and discount rates. The significant unobservable inputs used in the measurement include CPR and discount rates. Level 3 Nonrecourse debt Nonrecourse reverse mortgage loan financing liability The estimated fair value is based on the net present value of projected cash flows over the estimated life of the liability. The significant unobservable inputs used in the measurement include WAL, CPR, and discount rates. Level 3 Nonrecourse commercial loan financing liability The estimated fair value is based on the net present value of projected cash flows over the estimated life of the liability. The primary assumptions utilized include WAL, weighted average SMM, and discount rates. The Company estimates prepayment speeds giving consideration that the Company may in the future transfer additional loans to the trust, subject to the availability of funds provided for within the trust. Level 3 Deferred purchase price liabilities Deferred purchase price liabilities These liabilities are measured based on the estimated amount of indemnified claims associated with the AAG Transaction and the closing market price of the Company’s publicly-traded stock on the applicable date of the Condensed Consolidated Statements of Financial Condition. Refer to Note 3 - Acquisitions for additional information. Level 3 Tax Receivable Agreements (“TRA”) obligation The fair value is derived through the use of a DCF model. The significant unobservable assumptions used in the DCF include the ability to utilize tax attributes based on current tax forecasts, a constant U.S. federal income tax rate, and a discount rate. Level 3 Warrant liability Warrants The warrants are publicly-traded and are valued based on the closing market price of the applicable date of the Condensed Consolidated Statements of Financial Condition. Level 1 March 31, 2024 December 31, 2023 Instrument / Unobservable Inputs Range Weighted Average Range Weighted Average Assets Loans held for investment, subject to HMBS related obligations CPR NM 20.7 % NM 20.1 % Loss frequency NM 4.2 % NM 4.5 % Loss severity 3.6% - 14.5% 3.8 % 3.4% - 12.9% 3.5 % Discount rate NM 5.1 % NM 5.0 % Average draw rate NM 1.1 % NM 1.1 % Loans held for investment, subject to nonrecourse debt: HECM buyouts - securitized (nonperforming) CPR NM 39.3 % NM 39.8 % Loss frequency 23.1% - 100.0% 49.3 % 23.1% - 100% 51.0 % Loss severity 3.6% - 14.5% 7.0 % 3.4% - 12.8% 6.4 % Discount rate NM 9.0 % NM 8.6 % HECM buyouts - securitized (performing) WAL (in years) NM 7.3 NM 7.4 CPR NM 15.2 % NM 15.1 % Loss severity 3.6% - 14.5% 7.0 % 3.4% - 12.8% 6.9 % Discount rate NM 8.5 % NM 8.2 % Non-agency reverse mortgage loans - securitized WAL (in years) NM 9.9 NM 9.7 LTV 0.0% - 106.0% 45.6 % 0.0% - 79.6% 45.9 % CPR NM 14.6 % NM 14.7 % Loss severity NM 10.0 % NM 10.0 % HPA (6.3)% - 7.1% 3.3 % (9.8)% - 7.6% 3.3 % Discount rate NM 7.2 % NM 6.9 % Commercial mortgage loans - securitized SMM NM 9.2 % NM 10.7 % Discount rate NM 18.5 % NM 16.5 % Loss rate NM 3.8 % NM 1.0 % Loans held for investment: Inventory buyouts CPR NM 40.6 % NM 41.5 % Loss frequency NM 46.8 % NM 48.2 % Loss severity 3.6% - 14.5% 5.4 % 3.4% - 12.8% 5.1 % Discount rate NM 9.0 % NM 8.6 % Non-agency reverse mortgage loans WAL (in years) NM 11.5 NM 12.1 LTV 1.3% - 67.3% 34.1 % 3.9% - 53.8% 33.8 % CPR NM 14.6 % NM 14.4 % Loss severity NM 10.0 % NM 10.0 % HPA (6.3)% - 7.1% 3.2 % (9.8)% - 7.6% 3.1 % Discount rate NM 7.1 % NM 6.9 % March 31, 2024 December 31, 2023 Instrument / Unobservable Inputs Range Weighted Average Range Weighted Average Commercial mortgage loans SMM NM 5.1 % NM 73.6 % CDR NM 31.2 % NM 25.6 % Discount rate 9.6% - 20.7% 13.6 % 9.6% - 20.0% 13.2 % Other assets: Retained bonds WAL (in years) 2.3 - 23.2 4.8 2.3 - 23.4 4.9 Discount rate (24.3)% - 12.6% 7.3 % (31.2)% - 12.3% 6.7 % Liabilities HMBS related obligations CPR NM 24.6 % NM 23.8 % Discount rate NM 5.1 % NM 5.0 % Nonrecourse debt: Reverse mortgage loans: Performing/Nonperforming HECM securitizations WAL (in years) NM 0.7 NM 0.9 CPR 21.6% - 24.2% 23.0 % 21.5% - 22.3% 21.9 % Discount rate NM 10.3 % NM 10.0 % Securitized non-agency reverse WAL (in years) 1.0 - 11.1 4.6 0.8 - 11.2 4.5 CPR 0.0% - 21.0% 13.3 % 10.6% - 22.3% 14.7 % Discount rate NM 7.2 % NM 7.0 % Nonrecourse commercial loan financing liability WAL (in months) NM 1.2 NM 1.8 Weighted average SMM NM 45.4 % NM 33.3 % Discount rate NM 10.9 % NM 9.1 % Deferred purchase price liabilities TRA obligation Discount rate NM 35.8 % NM 33.0 % |
Summary of the recognized assets and liabilities that are measured at fair value on a recurring basis | The following table provides a summary of the recognized assets and liabilities that are measured at fair value on a recurring basis (in thousands): March 31, 2024 Total Fair Value Level 1 Level 2 Level 3 Assets Loans held for investment, subject to HMBS related obligations $ 18,050,772 $ — $ — $ 18,050,772 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,327,915 — — 8,327,915 Commercial mortgage loans 79,687 — — 79,687 Loans held for investment: Reverse mortgage loans 535,159 — — 535,159 Commercial mortgage loans 751 — — 751 Other assets: Loans held for sale - residential mortgage loans 2,465 — 2,465 — Retained bonds 42,906 — — 42,906 MSR 783 — — 783 Total assets $ 27,040,438 $ — $ 2,465 $ 27,037,973 Liabilities HMBS related obligations $ 17,827,060 $ — $ — $ 17,827,060 Nonrecourse debt: Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability 7,883,472 — — 7,883,472 Nonrecourse commercial loan financing liability 14,424 — — 14,424 Deferred purchase price liabilities: Deferred purchase price liabilities 2,794 — — 2,794 TRA obligation 4,824 — — 4,824 Warrant liability 431 431 — — Total liabilities $ 25,733,005 $ 431 $ — $ 25,732,574 December 31, 2023 Total Fair Value Level 1 Level 2 Level 3 Assets Loans held for investment, subject to HMBS related obligations $ 17,548,763 $ — $ — $ 17,548,763 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,138,403 — — 8,138,403 Commercial mortgage loans 133,990 — — 133,990 Loans held for investment: Reverse mortgage loans 574,271 — — 574,271 Commercial mortgage loans 957 — — 957 Other assets: Loans held for sale - residential mortgage loans 4,246 — 4,246 — Retained bonds 44,297 — — 44,297 MSR 6,436 — — 6,436 Loan purchase commitments 630 — 630 — Total assets $ 26,451,993 $ — $ 4,876 $ 26,447,117 Liabilities HMBS related obligations $ 17,353,720 $ — $ — $ 17,353,720 Nonrecourse debt: Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability 7,876,932 — — 7,876,932 Nonrecourse commercial loan financing liability 27,268 — — 27,268 Deferred purchase price liabilities: Deferred purchase price liabilities 4,318 — — 4,318 TRA obligation 4,537 — — 4,537 Warrant liability 1,150 1,150 — — Total liabilities $ 25,267,925 $ 1,150 $ — $ 25,266,775 |
Fair value, assets measured on recurring basis, unobservable input reconciliation | Level 3 assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (in thousands): Assets Three months ended March 31, 2024 Loans held for investment Loans held for investment, subject to nonrecourse debt MSR Retained bonds Beginning balance $ 18,123,991 $ 8,272,393 $ 6,436 $ 44,297 Total gain (loss) included in earnings 604,482 23,599 (920) (742) Purchases, settlements, and transfers: Purchases and additions 684,204 10,522 — — Sales and settlements (551,350) (188,219) (4,733) (649) Transfers in (out) between categories (274,645) 289,307 — — Ending balance $ 18,586,682 $ 8,407,602 $ 783 $ 42,906 Assets Three months ended March 31, 2023 Loans held for investment Loans held for investment, subject to nonrecourse debt Loans held for sale MSR Retained bonds Purchase commitments Beginning balance $ 12,022,098 $ 7,454,638 $ 161,861 $ 95,096 $ 46,439 $ 9,356 Total gain (loss) included in earnings 244,759 298,636 (828) (1,369) 1,031 — Purchases, settlements, and transfers: Purchases and additions 6,462,274 26,981 40,468 405 — — Sales and settlements (406,942) (333,324) (198,338) (80,419) (422) (9,356) Transfers in (out) between categories (961,660) 927,896 15,580 — — — Ending balance $ 17,360,529 $ 8,374,827 $ 18,743 $ 13,713 $ 47,048 $ — |
Fair value, liabilities measured on recurring basis, unobservable input reconciliation | Level 3 assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (in thousands): Liabilities Three months ended March 31, 2024 HMBS related obligations Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability Nonrecourse commercial loan financing liability Deferred purchase price liabilities TRA obligation Beginning balance $ (17,353,720) $ (7,876,932) $ (27,268) $ (4,318) $ (4,537) Total gain (loss) included in earnings (487,559) (55,487) 8,863 1,524 (287) Purchases, settlements, and transfers: Purchases and additions (468,520) (128,185) — — — Settlements 482,739 177,132 3,981 — — Ending balance $ (17,827,060) $ (7,883,472) $ (14,424) $ (2,794) $ (4,824) Liabilities Three months ended March 31, 2023 HMBS related obligations Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability Nonrecourse commercial loan financing liability Nonrecourse MSR financing liability Deferred purchase price liabilities TRA obligation Beginning balance $ (10,996,755) $ (7,175,857) $ (106,758) $ (60,562) $ (137) $ (3,781) Total gain (loss) included in earnings (147,451) (237,315) 381 748 — 1,579 Purchases, settlements, and transfers: Purchases and additions (5,648,041) (639,499) (22,600) — (4,385) — Settlements 384,618 96,796 53,288 58,826 — — Ending balance $ (16,407,629) $ (7,955,875) $ (75,689) $ (988) $ (4,522) $ (2,202) |
Summary of the fair value and unpaid principal balance ("UPB") | Presented in the tables below are the fair value and the unpaid principal balance (“UPB”), at March 31, 2024 and December 31, 2023, of financial assets and liabilities for which the Company has elected the fair value option (in thousands): March 31, 2024 Estimated Fair Value Unpaid Principal Balance Assets at fair value under the fair value option Loans held for investment, subject to HMBS related obligations $ 18,050,772 $ 17,113,496 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,327,915 8,483,961 Commercial mortgage loans 79,687 92,561 Loans held for investment: Reverse mortgage loans 535,159 519,237 Commercial mortgage loans 751 1,044 Other assets: Loans held for sale - residential mortgage loans 2,465 6,997 Liabilities at fair value under the fair value option HMBS related obligations 17,827,060 17,113,496 Nonrecourse debt: Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability 7,883,472 8,447,617 Nonrecourse commercial loan financing liability 14,424 22,295 December 31, 2023 Estimated Fair Value Unpaid Principal Balance Assets at fair value under the fair value option Loans held for investment, subject to HMBS related obligations $ 17,548,763 $ 16,875,437 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,138,403 8,257,750 Commercial mortgage loans 133,990 136,622 Loans held for investment: Reverse mortgage loans 574,271 558,577 Commercial mortgage loans 957 1,044 Other assets: Loans held for sale - residential mortgage loans 4,246 9,247 Liabilities at fair value under the fair value option HMBS related obligations 17,353,720 16,875,437 Nonrecourse debt: Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability 7,876,932 8,429,135 Nonrecourse commercial loan financing liability 27,268 26,661 Loans held for investment and held for sale consisted of the following (in thousands): March 31, 2024 Unpaid Principal Balance Fair Value Adjustments Estimated Fair Value Loans held for investment, subject to HMBS related obligations $ 17,113,496 $ 937,276 $ 18,050,772 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,483,961 (156,046) 8,327,915 Commercial mortgage loans 92,561 (12,874) 79,687 Total loans held for investment, subject to nonrecourse debt 8,576,522 (168,920) 8,407,602 Loans held for investment (1) : Reverse mortgage loans 519,237 15,922 535,159 Commercial mortgage loans 1,044 (293) 751 Total loans held for investment 520,281 15,629 535,910 Other assets: Loans held for sale - residential mortgage loans 6,997 (4,532) 2,465 Total loan portfolio $ 26,217,296 $ 779,453 $ 26,996,749 (1) As of March 31, 2024, there was $484.9 million in UPB in loans held for investment pledged as collateral for financing lines of credit. December 31, 2023 Unpaid Principal Balance Fair Value Adjustments Estimated Fair Value Loans held for investment, subject to HMBS related obligations $ 16,875,437 $ 673,326 $ 17,548,763 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,257,750 (119,347) 8,138,403 Commercial mortgage loans 136,622 (2,632) 133,990 Total loans held for investment, subject to nonrecourse debt 8,394,372 (121,979) 8,272,393 Loans held for investment (1) : Reverse mortgage loans 558,577 15,694 574,271 Commercial mortgage loans 1,044 (87) 957 Total loans held for investment 559,621 15,607 575,228 Other assets: Loans held for sale - residential mortgage loans 9,247 (5,001) 4,246 Total loan portfolio $ 25,838,677 $ 561,953 $ 26,400,630 (1) As of December 31, 2023, there was $487.9 million in UPB in loans held for investment pledged as collateral for financing lines of credit. The tables below show the total amount of loans held for investment and held for sale that were greater than 90 days past due and on non-accrual status (in thousands): March 31, 2024 Unpaid Principal Balance Estimated Fair Value Difference Loans held for investment, subject to nonrecourse debt: Commercial mortgage loans $ 33,243 $ 27,295 $ (5,948) Loans held for investment: Commercial mortgage loans 1,044 751 (293) Other assets: Loans held for sale - residential mortgage loans 3,931 20 (3,911) Total loans 90 days or more past due and on non-accrual status $ 38,218 $ 28,066 $ (10,152) December 31, 2023 Unpaid Principal Balance Estimated Fair Value Difference Loans held for investment, subject to nonrecourse debt: Commercial mortgage loans $ 34,115 $ 31,244 $ (2,871) Other assets: Loans held for sale - residential mortgage loans 4,324 428 (3,896) Total loans 90 days or more past due and on non-accrual status $ 38,439 $ 31,672 $ (6,767) The table below shows a reconciliation of the changes in loans held for sale (in thousands): For the three months ended March 31, 2024 For the three months ended March 31, 2023 Beginning balance $ 4,246 $ 173,984 Originations/purchases/repurchases 2,284 79,286 Proceeds from sales (4,151) (200,456) Net transfers related to loans held for sale — 15,580 Net transfers related to discontinued operations — 12,526 Gain (loss) on loans held for sale, net 86 (12,387) Net fair value gain on loans held for sale — 8,961 Ending balance $ 2,465 $ 77,494 |
Summary of the components of net fair value gains on mortgage loans and related obligations | Provided in the table below is a summary of the components of net fair value gains on loans and related obligations (in thousands): For the three months ended March 31, 2024 For the three months ended March 31, 2023 Net origination gains $ 39,657 $ 24,475 Interest income on mortgage loans 460,034 309,494 Interest expense on HMBS and nonrecourse obligations (373,736) (224,391) Servicing related income, net (1) 10,726 4,391 Fair value changes from model amortization (2) (57,608) (50,266) Net fair value gains from portfolio activity 39,416 39,228 Net fair value gains from changes in market inputs or model assumptions 13,562 112,691 Net fair value gains on loans and related obligations $ 92,635 $ 176,394 (1) Servicing related income, net, is comprised of premiums realized on the securitization of reverse mortgage tails and miscellaneous contractual servicing fees, net of guarantee fees paid. (2) Fair value changes from portfolio runoff and realization of modeled income and expenses. |
Reverse Mortgage Portfolio Comp
Reverse Mortgage Portfolio Composition (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Summary of the Company's Serviced Reverse Mortgage Portfolio Composition and the Remaining UPBs of the Reverse Mortgage Loan Portfolio | The table below summarizes the composition and the outstanding UPB of the reverse mortgage loan portfolio serviced by the Company (in thousands): March 31, 2024 December 31, 2023 Reverse mortgage loans: Reverse mortgage loans held for investment, subject to HMBS related obligations $ 17,113,496 $ 16,875,437 Reverse mortgage loans held for investment, subject to nonrecourse debt: Performing HECM buyouts 215,839 216,184 Nonperforming HECM buyouts 382,644 409,965 Non-agency reverse mortgages 7,885,478 7,631,601 Total reverse mortgage loans held for investment, subject to nonrecourse debt 8,483,961 8,257,750 Reverse mortgage loans held for investment: Non-agency reverse mortgages 243,500 241,424 HECM loans not securitized (1) 107,309 101,820 Unpoolable HECM loans (2) 157,032 203,957 Unpoolable HECM tails 11,396 11,376 Total reverse mortgage loans held for investment 519,237 558,577 Total owned reverse mortgage portfolio 26,116,694 25,691,764 Loans reclassified as government guaranteed receivable 72,981 94,636 Loans serviced for others 156,220 164,742 Total serviced reverse mortgage loan portfolio $ 26,345,895 $ 25,951,142 (1) Loans not securitized represent primarily newly originated loans and poolable tails. (2) |
Summarizes the Owned Reverse Mortgage Portfolio by Product Type | The table below summarizes the reverse mortgage portfolio owned by the Company by product type (in thousands): March 31, 2024 December 31, 2023 Fixed rate loans $ 6,951,821 $ 6,817,176 Adjustable rate loans 19,164,873 18,874,588 Total owned reverse mortgage portfolio $ 26,116,694 $ 25,691,764 |
Loans, at Fair Value (Tables)
Loans, at Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Schedule of Loans, At Fair Value | Presented in the tables below are the fair value and the unpaid principal balance (“UPB”), at March 31, 2024 and December 31, 2023, of financial assets and liabilities for which the Company has elected the fair value option (in thousands): March 31, 2024 Estimated Fair Value Unpaid Principal Balance Assets at fair value under the fair value option Loans held for investment, subject to HMBS related obligations $ 18,050,772 $ 17,113,496 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,327,915 8,483,961 Commercial mortgage loans 79,687 92,561 Loans held for investment: Reverse mortgage loans 535,159 519,237 Commercial mortgage loans 751 1,044 Other assets: Loans held for sale - residential mortgage loans 2,465 6,997 Liabilities at fair value under the fair value option HMBS related obligations 17,827,060 17,113,496 Nonrecourse debt: Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability 7,883,472 8,447,617 Nonrecourse commercial loan financing liability 14,424 22,295 December 31, 2023 Estimated Fair Value Unpaid Principal Balance Assets at fair value under the fair value option Loans held for investment, subject to HMBS related obligations $ 17,548,763 $ 16,875,437 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,138,403 8,257,750 Commercial mortgage loans 133,990 136,622 Loans held for investment: Reverse mortgage loans 574,271 558,577 Commercial mortgage loans 957 1,044 Other assets: Loans held for sale - residential mortgage loans 4,246 9,247 Liabilities at fair value under the fair value option HMBS related obligations 17,353,720 16,875,437 Nonrecourse debt: Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability 7,876,932 8,429,135 Nonrecourse commercial loan financing liability 27,268 26,661 Loans held for investment and held for sale consisted of the following (in thousands): March 31, 2024 Unpaid Principal Balance Fair Value Adjustments Estimated Fair Value Loans held for investment, subject to HMBS related obligations $ 17,113,496 $ 937,276 $ 18,050,772 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,483,961 (156,046) 8,327,915 Commercial mortgage loans 92,561 (12,874) 79,687 Total loans held for investment, subject to nonrecourse debt 8,576,522 (168,920) 8,407,602 Loans held for investment (1) : Reverse mortgage loans 519,237 15,922 535,159 Commercial mortgage loans 1,044 (293) 751 Total loans held for investment 520,281 15,629 535,910 Other assets: Loans held for sale - residential mortgage loans 6,997 (4,532) 2,465 Total loan portfolio $ 26,217,296 $ 779,453 $ 26,996,749 (1) As of March 31, 2024, there was $484.9 million in UPB in loans held for investment pledged as collateral for financing lines of credit. December 31, 2023 Unpaid Principal Balance Fair Value Adjustments Estimated Fair Value Loans held for investment, subject to HMBS related obligations $ 16,875,437 $ 673,326 $ 17,548,763 Loans held for investment, subject to nonrecourse debt: Reverse mortgage loans 8,257,750 (119,347) 8,138,403 Commercial mortgage loans 136,622 (2,632) 133,990 Total loans held for investment, subject to nonrecourse debt 8,394,372 (121,979) 8,272,393 Loans held for investment (1) : Reverse mortgage loans 558,577 15,694 574,271 Commercial mortgage loans 1,044 (87) 957 Total loans held for investment 559,621 15,607 575,228 Other assets: Loans held for sale - residential mortgage loans 9,247 (5,001) 4,246 Total loan portfolio $ 25,838,677 $ 561,953 $ 26,400,630 (1) As of December 31, 2023, there was $487.9 million in UPB in loans held for investment pledged as collateral for financing lines of credit. The tables below show the total amount of loans held for investment and held for sale that were greater than 90 days past due and on non-accrual status (in thousands): March 31, 2024 Unpaid Principal Balance Estimated Fair Value Difference Loans held for investment, subject to nonrecourse debt: Commercial mortgage loans $ 33,243 $ 27,295 $ (5,948) Loans held for investment: Commercial mortgage loans 1,044 751 (293) Other assets: Loans held for sale - residential mortgage loans 3,931 20 (3,911) Total loans 90 days or more past due and on non-accrual status $ 38,218 $ 28,066 $ (10,152) December 31, 2023 Unpaid Principal Balance Estimated Fair Value Difference Loans held for investment, subject to nonrecourse debt: Commercial mortgage loans $ 34,115 $ 31,244 $ (2,871) Other assets: Loans held for sale - residential mortgage loans 4,324 428 (3,896) Total loans 90 days or more past due and on non-accrual status $ 38,439 $ 31,672 $ (6,767) The table below shows a reconciliation of the changes in loans held for sale (in thousands): For the three months ended March 31, 2024 For the three months ended March 31, 2023 Beginning balance $ 4,246 $ 173,984 Originations/purchases/repurchases 2,284 79,286 Proceeds from sales (4,151) (200,456) Net transfers related to loans held for sale — 15,580 Net transfers related to discontinued operations — 12,526 Gain (loss) on loans held for sale, net 86 (12,387) Net fair value gain on loans held for sale — 8,961 Ending balance $ 2,465 $ 77,494 |
HMBS Related Obligations, at _2
HMBS Related Obligations, at Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Summary of HMBS related obligations, at fair value | HMBS related obligations, at fair value, consisted of the following (in thousands): March 31, 2024 December 31, 2023 Ginnie Mae loan pools - UPB $ 17,113,496 $ 16,875,437 Fair value adjustments 713,564 478,283 Total HMBS related obligations, at fair value $ 17,827,060 $ 17,353,720 Weighted average remaining life (in years) 4.0 4.1 Weighted average interest rate 6.4 % 6.6 % |
Nonrecourse Debt, at Fair Val_2
Nonrecourse Debt, at Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Summary of Nonrecourse Debt At Fair Value | Nonrecourse debt, at fair value, consisted of the following (in thousands): Issue Date Final Maturity Date Interest Rate Original Issue Amount March 31, 2024 December 31, 2023 Securitization of performing/nonperforming HECM loans February 2022 - August 2022 February 2032 - August 2032 2.69% - 9.32% $ 1,084,935 $ 623,988 $ 672,911 Securitization of non-agency reverse loans May 2018 - February 2024 May 2050 - February 2074 1.25% - 4.50% 9,192,451 7,430,291 7,331,305 Securitization of commercial loans April 2021 May 2025 2.10% - 5.40% $ 268,511 48,051 83,237 Total consolidated VIE nonrecourse debt UPB 8,102,330 8,087,453 Nonrecourse reverse loan financing liability (1) 345,287 341,682 Nonrecourse commercial loan financing liability (2) 22,295 26,661 Fair value adjustments (572,016) (551,596) Total nonrecourse debt, at fair value $ 7,897,896 $ 7,904,200 (1) Nonrecourse reverse loan financing liability is comprised of the balance of the nonrecourse debt for the applicable period associated with a non-agency securitization. As the securitization was determined to be an unconsolidated VIE and failed sale treatment, the associated nonrecourse debt is accounted for by FoA and presented separately from the other nonrecourse debts. Refer to Note 5 - Variable Interest Entities and Securitizations for additional information. (2) Nonrecourse commercial loan financing liability is comprised of the balance of the nonrecourse debt for the applicable period associated with a commercial mortgage securitization. As the securitization was determined to be an unconsolidated VIE and failed sale treatment, the associated nonrecourse debt is accounted for by FoA and presented separately from the other nonrecourse debts. Refer to Note 5 - Variable Interest Entities and Securitizations for additional information. |
Summary Of Estimated Maturities For Nonrecourse Debt Fair Value | As of March 31, 2024, estimated maturities for nonrecourse debt for the next five years and thereafter are as follows (in thousands): Year Ending December 31, Estimated Maturities Remainder of 2024 $ 1,277,278 2025 1,539,192 2026 2,825,222 2027 304,009 2028 298,924 Thereafter 2,225,287 Total payments on nonrecourse debt $ 8,469,912 |
Other Financing Lines of Cred_2
Other Financing Lines of Credit (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Summary of components of other financing lines of credit | The following summarizes the components of other financing lines of credit (in thousands): Outstanding borrowings at Maturity Date Interest Rate Collateral Pledged Total Capacity (1) March 31, 2024 December 31, 2023 Reverse Lines: June 2024 - October 2026 Bloomberg short-term First Lien Mortgages $ 932,500 $ 433,829 $ 432,918 Various (2) Bond accrual rate/SOFR + applicable margin Mortgage Related Assets 498,228 482,228 344,367 October 2027 SOFR + applicable margin MSR 70,000 69,231 69,231 October 2024 BSBY + applicable margin Unsecuritized Tails 30,000 28,750 23,620 Subtotal reverse lines of credit $ 1,530,728 $ 1,014,038 $ 870,136 Mortgage Lines: October 2024 BSBY + applicable margin First Lien Mortgages $ 12,500 $ 1,446 $ 2,135 Various (2) Bond accrual rate + applicable margin Mortgage Related Assets 35,707 35,707 36,208 Subtotal mortgage lines of credit $ 48,207 $ 37,153 $ 38,343 Commercial Lines: July 2024 SOFR + applicable margin Mortgage Related Assets $ 20,000 $ 20,000 $ 20,000 Total other financing lines of credit $ 1,598,935 $ 1,071,191 $ 928,479 (1) Capacity is dependent upon maintaining compliance with, or obtaining waivers of, the terms, conditions, and covenants of the respective agreements, including asset-eligibility requirements. Capacity amounts presented are as of March 31, 2024. (2) These lines of credit are tied to the maturity date of the underlying mortgage related assets that have been pledged as collateral. |
Summary of maximum allowable distributions available to the Company based on the most restrictive of such financial covenant ratios | As of March 31, 2024, the maximum allowable distributions available to the Company based on the most restrictive of such financial covenant ratios is presented in the table below (in thousands, except for ratios): Financial Covenants Requirement March 31, 2024 Maximum Allowable Distribution (1) FAM Adjusted Tangible Net Worth $ 10,000 $ 10,667 $ 667 Liquidity 1,000 2,300 1,300 FAR Adjusted Tangible Net Worth $ 250,000 $ 474,156 $ 224,156 Liquidity 40,000 42,731 2,731 Leverage Ratio 6:1 3.2:1 219,827 FAH Adjusted Tangible Net Worth $ 220,000 $ 456,467 $ 236,467 Liquidity 40,000 45,763 5,763 Leverage Ratio 10:1 3.7:1 288,165 (1) The Maximum Allowable Distribution for any of the originations subsidiaries is the lowest of the amounts shown for the particular originations subsidiary. As of December 31, 2023, the maximum allowable distributions available to the Company based on the most restrictive of such financial covenant ratios is presented in the table below (in thousands, except for ratios): Financial Covenants Requirement December 31, 2023 Maximum Allowable Distribution (1) FAM Adjusted Tangible Net Worth $ 10,000 $ 15,264 $ 5,264 Liquidity 1,000 2,254 1,254 FAR Adjusted Tangible Net Worth $ 250,000 $ 447,571 $ 197,571 Liquidity 40,000 41,656 1,656 Leverage Ratio 6:1 3.0:1 223,460 FAH Adjusted Tangible Net Worth $ 220,000 $ 446,321 $ 226,321 Liquidity 40,000 45,282 5,282 Leverage Ratio 10:1 3.3:1 297,445 (1) The Maximum Allowable Distribution for any of the originations subsidiaries is the lowest of the amounts shown for the particular originations subsidiary. |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Summary of Financial Information By Segment | The following tables are a presentation of financial information by segment (in thousands): For the three months ended March 31, 2024 Retirement Solutions Portfolio Management Total Reportable Segments Corporate and Other Eliminations Total REVENUES Net fair value gains on loans and related obligations $ 39,657 $ 52,978 $ 92,635 $ — $ — $ 92,635 Fee income 6,127 232 6,359 — (123) 6,236 Gain (loss) on sale and other income from loans held for sale, net (76) 162 86 — — 86 Net interest expense: Interest income — 3,945 3,945 321 — 4,266 Interest expense — (20,068) (20,068) (8,473) — (28,541) Net interest expense — (16,123) (16,123) (8,152) — (24,275) Total revenues 45,708 37,249 82,957 (8,152) (123) 74,682 Total expenses 49,410 22,753 72,163 19,275 (123) 91,315 Impairment of other assets — — — (600) — (600) Other, net (174) — (174) 1,627 — 1,453 Net income (loss) before taxes $ (3,876) $ 14,496 $ 10,620 $ (26,400) $ — $ (15,780) Depreciation and amortization $ 9,488 $ 8 $ 9,496 $ 182 $ — $ 9,678 Total assets $ 268,786 $ 27,357,160 $ 27,625,946 $ 1,455,417 $ (1,405,085) $ 27,676,278 For the three months ended March 31, 2023 Retirement Solutions Portfolio Management Total Reportable Segments Corporate and Other Eliminations Total REVENUES Net fair value gains on loans and related obligations $ 24,475 $ 151,919 $ 176,394 $ — $ — $ 176,394 Fee income 3,180 5,463 8,643 2,953 (5,244) 6,352 Loss on sale and other income from loans held for sale, net (1,312) (11,058) (12,370) — (56) (12,426) Net interest expense: Interest income — 1,470 1,470 621 — 2,091 Interest expense — (23,996) (23,996) (7,560) — (31,556) Net interest expense — (22,526) (22,526) (6,939) — (29,465) Total revenues 26,343 123,798 150,141 (3,986) (5,300) 140,855 Total expenses 35,524 24,679 60,203 28,874 (5,300) 83,777 Other, net 31 — 31 905 — 936 Net income (loss) before taxes $ (9,150) $ 99,119 $ 89,969 $ (31,955) $ — $ 58,014 Depreciation and amortization $ 9,643 $ 14 $ 9,657 $ 448 $ — $ 10,105 Total assets $ 296,417 $ 26,327,259 $ 26,623,676 $ 1,912,801 $ (1,861,938) $ 26,674,539 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Summary of basic earnings per share | The following tables reconcile the numerators and denominators used in the computations of both basic and diluted net income (loss) per share (in thousands, except share data): For the three months ended March 31, 2024 For the three months ended March 31, 2023 Basic net income (loss) per share: Numerator Net income (loss) from continuing operations $ (15,780) $ 55,482 Less: Income (loss) from continuing operations attributable to noncontrolling interest (1) (10,145) 36,755 Net income (loss) from continuing operations attributable to holders of Class A Common Stock - basic $ (5,635) $ 18,727 Net loss from discontinued operations $ (4,524) $ (40,890) Less: Loss from discontinued operations attributable to noncontrolling interest (1) (2,621) (25,217) Net loss from discontinued operations attributable to holders of Class A Common Stock - basic $ (1,903) $ (15,673) Denominator Weighted average shares of Class A Common Stock outstanding - basic 96,485,585 64,016,845 Basic net income (loss) per share Continuing operations $ (0.06) $ 0.29 Discontinued operations (0.02) (0.24) Basic net income (loss) per share $ (0.08) $ 0.05 (1) The Class A LLC Units of FoA Equity, held by the Continuing Unitholders and AAG/Bloom (collectively “Equity Capital Unitholders”), which comprise the noncontrolling interest in the Company, represents a participating security. Therefore, the numerator was adjusted to reduce net income (loss) by the amount of net income (loss) attributable to noncontrolling interest. Additionally, the Class B Common Stock does not participate in earnings or losses of the Company and, therefore, is not a participating security. The Class B Common Stock has not been included in either the basic or diluted net income (loss) per share calculations. |
Summary of diluted earnings per share | For the three months ended March 31, 2024 For the three months ended March 31, 2023 Diluted net income (loss) per share: Numerator Net income (loss) from continuing operations attributable to holders of Class A Common Stock - basic $ (5,635) $ 18,727 Reallocation of net income from continuing operations assuming exchange of Class A LLC Units (1) — 23,328 Net income (loss) from continuing operations attributable to holders of Class A Common Stock - diluted $ (5,635) $ 42,055 Net loss from discontinued operations attributable to holders of Class A Common Stock - basic $ (1,903) $ (15,673) Reallocation of net loss from discontinued operations assuming exchange of Class A LLC Units (1) — (12,470) Net loss from discontinued operations attributable to holders of Class A Common Stock - diluted $ (1,903) $ (28,143) Denominator Weighted average shares of Class A Common Stock outstanding - basic 96,485,585 64,016,845 Effect of dilutive securities: Assumed exchange of weighted average Class A LLC Units for shares of Class A Common Stock (2) — 124,159,953 Forward sale share contracts - dilutive shares under the treasury stock method — 2,124,214 Weighted average shares of Class A Common Stock outstanding - diluted (3) 96,485,585 190,301,012 Diluted net income (loss) per share Continuing operations $ (0.06) $ 0.22 Discontinued operations (0.02) (0.15) Diluted net income (loss) per share $ (0.08) $ 0.07 (1) For the three months ended March 31, 2024, the effect of the elimination of the noncontrolling interest due to the assumed exchange of all Class A LLC Units outstanding for shares of Class A Common Stock in FoA was determined to be anti-dilutive under the if-converted method. As such, the effect has been excluded from the calculation of diluted net income (loss) per share. For the three months ended March 31, 2023, this adjustment assumes the reallocation of noncontrolling interest earnings, on an after-tax basis, due to the assumed exchange of all Class A LLC Units outstanding for shares of Class A Common Stock in FoA as of the beginning of the period following the if-converted method for calculating diluted net income (loss) per share. Following the terms of the A&R LLC Agreement, the Class A LLC unitholders will bear approximately 85% of the cost of any vesting associated with the Replacement RSUs and Earnout Right RSUs prior to any distribution by the Company to such Class A LLC unitholders. The remaining compensation cost associated with the Replacement RSUs and Earnout Right RSUs will be born by FoA. As a result of the application of the if-converted method in arriving at diluted net income (loss) per share, the entirety of the compensation cost associated with vesting of the Replacement RSUs and Earnout Right RSUs is assumed to be included in the net income (loss) attributable to holders of the Company’s Class A Common Stock. (2) The Exchange Agreement allows for the exchange of Class A LLC Units held by Equity Capital Unitholders, representing the noncontrolling interest, on a one-for-one basis for shares of Class A Common Stock in FoA. The 132,947,368 weighted average Class A LLC Units outstanding for the three months ended March 31, 2024 were determined to be anti-dilutive under the if-converted method and have been excluded from the computation of diluted net income (loss) per share. For the three months ended March 31, 2023, the diluted weighted average shares outstanding of Class A Common Stock includes the effects of the if-converted method to reflect the provisions of the Exchange Agreement and assumes the Class A LLC Units held by Equity Capital Unitholders, representing the noncontrolling interest, exchange their units on a one-for-one basis for shares of Class A Common Stock in FoA. (3) As part of the AAG Transaction, there are two forms of contingently issuable Class A LLC Units: 7,058,416 Units that are equity classified and indemnity holdback units totaling up to 7,142,260 Units that are liability classified. In accordance with ASC 260, Earnings Per Share, these units are not included in the diluted weighted average shares outstanding of Class A Common Stock for the three months ended March 31, 2024 and 2023. |
Organization and Description _2
Organization and Description of Business (Details) | Feb. 01, 2023 |
ANTIC Capital Stock | Incenter | Lender Services Segment | |
Segment Reporting Information [Line Items] | |
Sale of stock, percentage of ownership before transaction | 100% |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
American Advisors Group (AAG) | |
Business Acquisition [Line Items] | |
Total cost | $ 215,373 |
Acquisitions - Fair Value of Co
Acquisitions - Fair Value of Consideration Transferred and Assets Acquired and Liabilities Assumed (Details) - American Advisors Group (AAG) $ / shares in Units, $ in Thousands | Mar. 31, 2023 USD ($) units $ / shares shares |
Consideration transferred: | |
Cash consideration | $ 3,100 |
Notes payable to Seller | 4,500 |
Pay off indebtedness | 136,984 |
Other liabilities assumed | 8,429 |
Buyer transaction expenses | 770 |
Forgiveness of bridge working capital notes payable | 24,034 |
Total cost | 215,373 |
Assets acquired: | |
Fixed assets and leasehold improvements | 2,400 |
Right-of-use leased assets | 491 |
Other assets | 6,270 |
Total assets acquired | 5,596,143 |
Liabilities assumed: | |
Operating lease liabilities | 492 |
Payables and other liabilities | 25,906 |
Total liabilities assumed | 5,380,770 |
Net identifiable assets acquired | $ 215,373 |
Minimum | |
Liabilities assumed: | |
Business combination, contingent consideration, period | 2 years |
Maximum | |
Liabilities assumed: | |
Business combination, contingent consideration, period | 3 years |
Class A LLC Units | |
Consideration transferred: | |
Initial equity consideration – Class A LLC Units (Note 19 - Equity) | $ 24,419 |
Deferred equity consideration – Class A LLC Units (Note 19 - Equity) | $ 13,137 |
Liabilities assumed: | |
Shares issued at closing of transaction | shares | 19,692,990 |
Price per share (in dollars per share) | $ / shares | $ 1.24 |
Contingent equity consideration, number of types | units | 2 |
Class A LLC Units, Equity Classified, Indemnity Holdback | |
Consideration transferred: | |
Deferred equity consideration – Class A LLC Units (Note 19 - Equity) | $ 4,400 |
Total cost | $ 140,900 |
Liabilities assumed: | |
Contingent equity consideration (in shares) | shares | 7,142,260 |
Contingent equity consideration, threshold (in shares) | shares | 3,571,130 |
Class A LLC Units, Liability Classified | |
Consideration transferred: | |
Deferred equity consideration – Class A LLC Units (Note 19 - Equity) | $ 8,700 |
Liabilities assumed: | |
Contingent equity consideration (in shares) | shares | 7,058,416 |
Common Class B | |
Consideration transferred: | |
FoA Class B Common Stock (Note 19 - Equity) | $ 0 |
Liabilities assumed: | |
Shares issued at closing of transaction | shares | 1 |
Loans held for investment, subject to HMBS related obligations | |
Assets acquired: | |
Loans held for investment | $ 5,448,712 |
Loans held for investment | |
Assets acquired: | |
Loans held for investment | 138,270 |
HMBS related obligations | |
Liabilities assumed: | |
HMBS related obligations | $ 5,354,372 |
Discontinued Operations - Balan
Discontinued Operations - Balance Sheet Disclosures (Details) - Discontinued Operations - Mortgage Originations, Commercial Originations and Lenders Services Segments - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Assets | ||
Other assets, net | $ 7,290 | $ 6,721 |
Liabilities | ||
Payables and other liabilities | $ 20,647 | $ 18,304 |
Discontinued Operations - Incom
Discontinued Operations - Income Statement Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Expenses | ||
Net loss from discontinued operations | $ (4,524) | $ (40,890) |
Net loss from discontinued operations attributable to noncontrolling interest | (2,621) | (25,217) |
Net loss from discontinued operations attributable to holders of Class A Common Stock - basic | (1,903) | (15,673) |
Discontinued Operations | Mortgage Originations, Commercial Originations and Lenders Services Segments | ||
Revenues | ||
Net fair value gains on loans and related obligations | 0 | 308 |
Fee income | 0 | 32,628 |
Gain on sale and other income from loans held for sale, net | 0 | 396 |
Net interest expense: | ||
Interest income | 0 | 517 |
Interest expense | 0 | (820) |
Net interest expense | 0 | (303) |
Total revenues | 0 | 33,029 |
Expenses | ||
Salaries, benefits, and related expenses | 0 | 30,851 |
Loan production and portfolio related expenses | 0 | 1,037 |
Marketing and advertising expenses | 0 | 540 |
Depreciation and amortization | 0 | 2,778 |
General and administrative expenses | 1,524 | 25,150 |
Total expenses | 1,524 | 60,356 |
Impairment of other assets | 0 | (1,055) |
Other, net | (3,000) | (9,089) |
Net loss from discontinued operations before income taxes | (4,524) | (37,471) |
Provision for income taxes from discontinued operations | 0 | 3,419 |
Net loss from discontinued operations | (4,524) | (40,890) |
Net loss from discontinued operations attributable to noncontrolling interest | (2,621) | (25,217) |
Net loss from discontinued operations attributable to holders of Class A Common Stock - basic | $ (1,903) | (15,673) |
Contingent liability | 3,000 | |
Gain (loss) on disposal | $ (10,200) |
Discontinued Operations - Cash
Discontinued Operations - Cash Flows Disclosures (Details) - Discontinued Operations - Mortgage Originations, Commercial Originations and Lenders Services Segments - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gain on sale and other income from loans held for sale, net | $ 0 | $ 396 |
Unrealized fair value changes on loans, related obligations, and derivatives | 0 | 308 |
Impairment of goodwill, intangibles, and other assets | 0 | 1,055 |
Depreciation and amortization | 0 | 2,778 |
Acquisition of fixed assets | $ 0 | $ 1,815 |
Variable Interest Entities an_3
Variable Interest Entities and Securitizations - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
HAWT Two Thousand And Twenty One Inv One Securitization | FAM | |||
Variable Interest Entity [Line Items] | |||
Beneficial interest in securitized trust (in percent) | 5% | ||
F A M Mortgage Loan | |||
Variable Interest Entity [Line Items] | |||
Repayments of debt | $ 424,700 | ||
Charge off expenses on transferred mortgage loan | 0 | $ 0 | |
F A M Mortgage Loan | FAM | Financial Asset 60 Days Or Less Past Due | |||
Variable Interest Entity [Line Items] | |||
Mortgage loans transferred to unconsolidated securitization trusts amount | $ 800 | $ 700 |
Variable Interest Entities an_4
Variable Interest Entities and Securitizations - Summary of the Assets and Liabilities of the Company's Consolidated Variable Interest Entities (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | [1] | |
ASSETS | |||||
Restricted cash | $ 195,349 | [1] | $ 178,319 | $ 228,613 | |
Loans held for investment, subject to nonrecourse debt, at fair value | 8,407,602 | 8,272,393 | |||
TOTAL ASSETS | 27,683,568 | 27,107,590 | |||
LIABILITIES | |||||
Nonrecourse debt, at fair value | 7,897,896 | 7,904,200 | |||
TOTAL LIABILITIES | 27,427,845 | 26,835,183 | |||
Variable Interest Entity, Primary Beneficiary | |||||
ASSETS | |||||
Restricted cash | 183,490 | 168,010 | |||
Loans held for investment, subject to nonrecourse debt, at fair value | 8,026,026 | 7,881,566 | |||
Other assets, net | 56,386 | 68,178 | |||
TOTAL ASSETS | 8,265,902 | 8,117,754 | |||
LIABILITIES | |||||
Nonrecourse debt, at fair value | 7,536,990 | 7,531,412 | |||
Payables and other liabilities | 501 | 546 | |||
TOTAL LIABILITIES | 7,537,491 | 7,531,958 | |||
Variable Interest Entity, Primary Beneficiary | Asset and Liabilities of Consolidated V I E | |||||
ASSETS | |||||
Restricted cash | 183,490 | 168,010 | |||
Loans held for investment, subject to nonrecourse debt, at fair value | 8,026,026 | 7,881,566 | |||
Other assets, net | 56,386 | 68,178 | |||
TOTAL ASSETS | 8,265,902 | 8,117,754 | |||
LIABILITIES | |||||
Nonrecourse debt, at fair value | 8,015,402 | 7,859,065 | |||
Payables and other liabilities | 501 | 546 | |||
TOTAL LIABILITIES | 8,015,903 | 7,859,611 | |||
Retained bonds and beneficial interests eliminated in consolidation | (478,412) | (327,653) | |||
TOTAL CONSOLIDATED LIABILITIES | $ 7,537,491 | $ 7,531,958 | |||
[1] (1) Amounts presented contain results from both continuing and discontinued operations. Refer to Note 4 - Discontinued Operations for additional information regarding cash flow associated with the results of discontinued operations. |
Variable Interest Entities an_5
Variable Interest Entities and Securitizations - Summary Of Unconsolidated VIEs (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Variable Interest Entity [Line Items] | ||
Assets | $ 27,683,568 | $ 27,107,590 |
Liabilities | 27,427,845 | 26,835,183 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Assets | 438,689 | 440,331 |
Liabilities | 367,582 | 368,343 |
Maximum exposure to loss | 71,107 | 71,988 |
Total assets in VIEs | 1,385,564 | 1,397,709 |
Variable Interest Entity, Not Primary Beneficiary | Retained interests | ||
Variable Interest Entity [Line Items] | ||
Assets | 50,124 | 50,774 |
Liabilities | 0 | 0 |
Maximum exposure to loss | 50,124 | 50,774 |
Total assets in VIEs | 996,999 | 1,008,152 |
Variable Interest Entity, Not Primary Beneficiary | Loans And Nonrecourse Liability | ||
Variable Interest Entity [Line Items] | ||
Assets | 388,565 | 389,557 |
Liabilities | 367,582 | 368,343 |
Maximum exposure to loss | 20,983 | 21,214 |
Total assets in VIEs | $ 388,565 | $ 389,557 |
Fair Value - Weighted Average U
Fair Value - Weighted Average Unobservable Assumptions Used In The Fair Value Measurements (Details) | Mar. 31, 2024 | Dec. 31, 2023 |
Weighted Average | Discount rate | ||
Unobservable Assumptions | ||
Retained bonds, measurement input | 0.073 | 0.067 |
Weighted Average | Discount rate | TRA obligation | ||
Unobservable Assumptions | ||
Deferred purchase price liabilities, measurement input | 0.358 | 0.330 |
Weighted Average | WAL (in years) | ||
Unobservable Assumptions | ||
Retained bonds, measurement input | 4.8 | 4.9 |
Weighted Average | Loans held for investment, subject to HMBS related obligations | CPR | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.207 | 0.201 |
Weighted Average | Loans held for investment, subject to HMBS related obligations | Loss frequency | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.042 | 0.045 |
Weighted Average | Loans held for investment, subject to HMBS related obligations | Loss severity | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.038 | 0.035 |
Weighted Average | Loans held for investment, subject to HMBS related obligations | Discount rate | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.051 | 0.050 |
Weighted Average | Loans held for investment, subject to HMBS related obligations | Average draw rate | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.011 | 0.011 |
Weighted Average | HECM buyouts - securitized (nonperforming) | CPR | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.393 | 0.398 |
Weighted Average | HECM buyouts - securitized (nonperforming) | Loss frequency | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.493 | 0.510 |
Weighted Average | HECM buyouts - securitized (nonperforming) | Loss severity | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.070 | 0.064 |
Weighted Average | HECM buyouts - securitized (nonperforming) | Discount rate | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.090 | 0.086 |
Weighted Average | HECM buyouts - securitized (performing) | CPR | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.152 | 0.151 |
Weighted Average | HECM buyouts - securitized (performing) | Loss severity | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.070 | 0.069 |
Weighted Average | HECM buyouts - securitized (performing) | Discount rate | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.085 | 0.082 |
Weighted Average | HECM buyouts - securitized (performing) | WAL (in years) | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 7.3 | 7.4 |
Weighted Average | Non-agency reverse mortgage loans - securitized | CPR | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.146 | 0.147 |
Weighted Average | Non-agency reverse mortgage loans - securitized | Loss severity | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.100 | 0.100 |
Weighted Average | Non-agency reverse mortgage loans - securitized | Discount rate | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.072 | 0.069 |
Weighted Average | Non-agency reverse mortgage loans - securitized | WAL (in years) | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 9.9 | 9.7 |
Weighted Average | Non-agency reverse mortgage loans - securitized | LTV | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.456 | 0.459 |
Weighted Average | Non-agency reverse mortgage loans - securitized | HPA | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.033 | 0.033 |
Weighted Average | Commercial mortgage loans - securitized | Discount rate | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.185 | 0.165 |
Weighted Average | Commercial mortgage loans - securitized | SMM | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.092 | 0.107 |
Weighted Average | Commercial mortgage loans - securitized | Loss rate | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.038 | 0.010 |
Weighted Average | Inventory buyouts | CPR | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.406 | 0.415 |
Weighted Average | Inventory buyouts | Loss frequency | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.468 | 0.482 |
Weighted Average | Inventory buyouts | Loss severity | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.054 | 0.051 |
Weighted Average | Inventory buyouts | Discount rate | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.090 | 0.086 |
Weighted Average | Non-agency reverse mortgage loans | CPR | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.146 | 0.144 |
Weighted Average | Non-agency reverse mortgage loans | Loss severity | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.100 | 0.100 |
Weighted Average | Non-agency reverse mortgage loans | Discount rate | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.071 | 0.069 |
Weighted Average | Non-agency reverse mortgage loans | WAL (in years) | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 11.5 | 12.1 |
Weighted Average | Non-agency reverse mortgage loans | LTV | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.341 | 0.338 |
Weighted Average | Non-agency reverse mortgage loans | HPA | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.032 | 0.031 |
Weighted Average | Commercial mortgage loans | Discount rate | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.136 | 0.132 |
Weighted Average | Commercial mortgage loans | SMM | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.051 | 0.736 |
Weighted Average | Commercial mortgage loans | CDR | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.312 | 0.256 |
Weighted Average | HMBS related obligations | CPR | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.246 | 0.238 |
Weighted Average | HMBS related obligations | Discount rate | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.051 | 0.050 |
Weighted Average | Performing/Nonperforming HECM securitizations | CPR | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 0.230 | 0.219 |
Weighted Average | Performing/Nonperforming HECM securitizations | Discount rate | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 0.103 | 0.100 |
Weighted Average | Performing/Nonperforming HECM securitizations | WAL (in years) | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 0.7 | 0.9 |
Weighted Average | Securitized non-agency reverse | CPR | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 0.133 | 0.147 |
Weighted Average | Securitized non-agency reverse | Discount rate | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 0.072 | 0.070 |
Weighted Average | Securitized non-agency reverse | WAL (in years) | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 4.6 | 4.5 |
Weighted Average | Nonrecourse commercial loan financing liability | Discount rate | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 0.109 | 0.091 |
Weighted Average | Nonrecourse commercial loan financing liability | WAL (in years) | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 1.2 | 1.8 |
Weighted Average | Nonrecourse commercial loan financing liability | Weighted average SMM | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 0.454 | 0.333 |
Minimum | Discount rate | ||
Unobservable Assumptions | ||
Retained bonds, measurement input | (0.243) | (0.312) |
Minimum | WAL (in years) | ||
Unobservable Assumptions | ||
Retained bonds, measurement input | 2.3 | 2.3 |
Minimum | Loans held for investment, subject to HMBS related obligations | Loss severity | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.036 | 0.034 |
Minimum | HECM buyouts - securitized (nonperforming) | Loss frequency | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.231 | 0.231 |
Minimum | HECM buyouts - securitized (nonperforming) | Loss severity | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.036 | 0.034 |
Minimum | HECM buyouts - securitized (performing) | Loss severity | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.036 | 0.034 |
Minimum | Non-agency reverse mortgage loans - securitized | LTV | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0 | 0 |
Minimum | Non-agency reverse mortgage loans - securitized | HPA | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | (0.063) | (0.098) |
Minimum | Inventory buyouts | Loss severity | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.036 | 0.034 |
Minimum | Non-agency reverse mortgage loans | LTV | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.013 | 0.039 |
Minimum | Non-agency reverse mortgage loans | HPA | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | (0.063) | (0.098) |
Minimum | Commercial mortgage loans | Discount rate | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.096 | 0.096 |
Minimum | Performing/Nonperforming HECM securitizations | CPR | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 0.216 | 0.215 |
Minimum | Securitized non-agency reverse | CPR | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 0 | 0.106 |
Minimum | Securitized non-agency reverse | WAL (in years) | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 1 | 0.8 |
Maximum | Discount rate | ||
Unobservable Assumptions | ||
Retained bonds, measurement input | 0.126 | 0.123 |
Maximum | WAL (in years) | ||
Unobservable Assumptions | ||
Retained bonds, measurement input | 23.2 | 23.4 |
Maximum | Loans held for investment, subject to HMBS related obligations | Loss severity | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.145 | 0.129 |
Maximum | HECM buyouts - securitized (nonperforming) | Loss frequency | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 1 | 1 |
Maximum | HECM buyouts - securitized (nonperforming) | Loss severity | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.145 | 0.128 |
Maximum | HECM buyouts - securitized (performing) | Loss severity | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.145 | 0.128 |
Maximum | Non-agency reverse mortgage loans - securitized | LTV | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 1.060 | 0.796 |
Maximum | Non-agency reverse mortgage loans - securitized | HPA | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.071 | 0.076 |
Maximum | Inventory buyouts | Loss severity | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.145 | 0.128 |
Maximum | Non-agency reverse mortgage loans | LTV | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.673 | 0.538 |
Maximum | Non-agency reverse mortgage loans | HPA | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.071 | 0.076 |
Maximum | Commercial mortgage loans | Discount rate | ||
Unobservable Assumptions | ||
Loans held-for-investment, measurement input | 0.207 | 0.200 |
Maximum | Performing/Nonperforming HECM securitizations | CPR | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 0.242 | 0.223 |
Maximum | Securitized non-agency reverse | CPR | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 0.210 | 0.223 |
Maximum | Securitized non-agency reverse | WAL (in years) | ||
Unobservable Assumptions | ||
Long-term debt, measurement input | 11.1 | 11.2 |
Fair Value - Summary Of Recogni
Fair Value - Summary Of Recognized Assets And Liabilities Measured At Fair Value On A Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Assets | ||
Retained bonds | $ 42,906 | $ 44,297 |
Total assets | 27,040,438 | 26,451,993 |
Liabilities | ||
HMBS related obligations | 17,827,060 | 17,353,720 |
Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability | 7,883,472 | 7,876,932 |
Nonrecourse commercial loan financing liability | 14,424 | 27,268 |
Deferred purchase price liabilities | 2,794 | 4,318 |
TRA obligation | 4,824 | 4,537 |
Total liabilities | 25,733,005 | 25,267,925 |
Level 1 | ||
Assets | ||
Retained bonds | 0 | 0 |
Total assets | 0 | 0 |
Liabilities | ||
HMBS related obligations | 0 | 0 |
Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability | 0 | 0 |
Nonrecourse commercial loan financing liability | 0 | 0 |
Deferred purchase price liabilities | 0 | 0 |
TRA obligation | 0 | 0 |
Total liabilities | 431 | 1,150 |
Level 2 | ||
Assets | ||
Retained bonds | 0 | 0 |
Total assets | 2,465 | 4,876 |
Liabilities | ||
HMBS related obligations | 0 | 0 |
Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability | 0 | 0 |
Nonrecourse commercial loan financing liability | 0 | 0 |
Deferred purchase price liabilities | 0 | 0 |
TRA obligation | 0 | 0 |
Total liabilities | 0 | 0 |
Level 3 | ||
Assets | ||
Retained bonds | 42,906 | 44,297 |
Total assets | 27,037,973 | 26,447,117 |
Liabilities | ||
HMBS related obligations | 17,827,060 | 17,353,720 |
Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability | 7,883,472 | 7,876,932 |
Nonrecourse commercial loan financing liability | 14,424 | 27,268 |
Deferred purchase price liabilities | 2,794 | 4,318 |
TRA obligation | 4,824 | 4,537 |
Total liabilities | 25,732,574 | 25,266,775 |
Loans held for investment, subject to HMBS related obligations | ||
Assets | ||
Loans held for investment, at fair value | 18,050,772 | 17,548,763 |
Loans held for investment, subject to HMBS related obligations | Level 1 | ||
Assets | ||
Loans held for investment, at fair value | 0 | 0 |
Loans held for investment, subject to HMBS related obligations | Level 2 | ||
Assets | ||
Loans held for investment, at fair value | 0 | 0 |
Loans held for investment, subject to HMBS related obligations | Level 3 | ||
Assets | ||
Loans held for investment, at fair value | 18,050,772 | 17,548,763 |
Reverse mortgage loans | ||
Assets | ||
Loans held for investment, at fair value | 8,327,915 | 8,138,403 |
Reverse mortgage loans | Level 1 | ||
Assets | ||
Loans held for investment, at fair value | 0 | 0 |
Reverse mortgage loans | Level 2 | ||
Assets | ||
Loans held for investment, at fair value | 0 | 0 |
Reverse mortgage loans | Level 3 | ||
Assets | ||
Loans held for investment, at fair value | 8,327,915 | 8,138,403 |
Commercial mortgage loans | ||
Assets | ||
Loans held for investment, at fair value | 79,687 | 133,990 |
Commercial mortgage loans | Level 1 | ||
Assets | ||
Loans held for investment, at fair value | 0 | 0 |
Commercial mortgage loans | Level 2 | ||
Assets | ||
Loans held for investment, at fair value | 0 | 0 |
Commercial mortgage loans | Level 3 | ||
Assets | ||
Loans held for investment, at fair value | 79,687 | 133,990 |
Reverse mortgage loans | ||
Assets | ||
Loans held for investment, at fair value | 535,159 | 574,271 |
Reverse mortgage loans | Level 1 | ||
Assets | ||
Loans held for investment, at fair value | 0 | 0 |
Reverse mortgage loans | Level 2 | ||
Assets | ||
Loans held for investment, at fair value | 0 | 0 |
Reverse mortgage loans | Level 3 | ||
Assets | ||
Loans held for investment, at fair value | 535,159 | 574,271 |
Commercial mortgage loans | ||
Assets | ||
Loans held for investment, at fair value | 751 | 957 |
Commercial mortgage loans | Level 1 | ||
Assets | ||
Loans held for investment, at fair value | 0 | 0 |
Commercial mortgage loans | Level 2 | ||
Assets | ||
Loans held for investment, at fair value | 0 | 0 |
Commercial mortgage loans | Level 3 | ||
Assets | ||
Loans held for investment, at fair value | 751 | 957 |
Loans held for sale - residential mortgage loans | ||
Assets | ||
Leans held for sale, at fair value | 2,465 | 4,246 |
Loans held for sale - residential mortgage loans | Level 1 | ||
Assets | ||
Leans held for sale, at fair value | 0 | 0 |
Loans held for sale - residential mortgage loans | Level 2 | ||
Assets | ||
Leans held for sale, at fair value | 2,465 | 4,246 |
Loans held for sale - residential mortgage loans | Level 3 | ||
Assets | ||
Leans held for sale, at fair value | 0 | 0 |
MSR | ||
Assets | ||
MSR | 783 | 6,436 |
MSR | Level 1 | ||
Assets | ||
MSR | 0 | 0 |
MSR | Level 2 | ||
Assets | ||
MSR | 0 | 0 |
MSR | Level 3 | ||
Assets | ||
MSR | 783 | 6,436 |
Loan purchase commitments | ||
Assets | ||
Loan purchase commitments | 630 | |
Loan purchase commitments | Level 1 | ||
Assets | ||
Loan purchase commitments | 0 | |
Loan purchase commitments | Level 2 | ||
Assets | ||
Loan purchase commitments | 630 | |
Loan purchase commitments | Level 3 | ||
Assets | ||
Loan purchase commitments | 0 | |
Warrant liability | ||
Liabilities | ||
Derivative liabilities | 431 | 1,150 |
Warrant liability | Level 1 | ||
Liabilities | ||
Derivative liabilities | 431 | 1,150 |
Warrant liability | Level 2 | ||
Liabilities | ||
Derivative liabilities | 0 | 0 |
Warrant liability | Level 3 | ||
Liabilities | ||
Derivative liabilities | $ 0 | $ 0 |
Fair Value - Assets and Liabili
Fair Value - Assets and Liabilities Measured At Fair Value On Recurring Basis Using Significant Unobservable Inputs (Details) - Level 3 - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Loans held for investment | ||
Assets | ||
Beginning balance | $ 18,123,991 | $ 12,022,098 |
Total gain (loss) included in earnings | 604,482 | 244,759 |
Purchases and additions | 684,204 | 6,462,274 |
Sales and settlements | (551,350) | (406,942) |
Transfers in (out) between categories | (274,645) | (961,660) |
Ending balance | 18,586,682 | 17,360,529 |
Loans held for investment, subject to nonrecourse debt | ||
Assets | ||
Beginning balance | 8,272,393 | 7,454,638 |
Total gain (loss) included in earnings | 23,599 | 298,636 |
Purchases and additions | 10,522 | 26,981 |
Sales and settlements | (188,219) | (333,324) |
Transfers in (out) between categories | 289,307 | 927,896 |
Ending balance | 8,407,602 | 8,374,827 |
Loans held for sale | ||
Assets | ||
Beginning balance | 161,861 | |
Total gain (loss) included in earnings | (828) | |
Purchases and additions | 40,468 | |
Sales and settlements | (198,338) | |
Transfers in (out) between categories | 15,580 | |
Ending balance | 18,743 | |
MSR | ||
Assets | ||
Beginning balance | 6,436 | 95,096 |
Total gain (loss) included in earnings | (920) | (1,369) |
Purchases and additions | 0 | 405 |
Sales and settlements | (4,733) | (80,419) |
Transfers in (out) between categories | 0 | 0 |
Ending balance | 783 | 13,713 |
Retained bonds | ||
Assets | ||
Beginning balance | 44,297 | 46,439 |
Total gain (loss) included in earnings | (742) | 1,031 |
Purchases and additions | 0 | 0 |
Sales and settlements | (649) | (422) |
Transfers in (out) between categories | 0 | 0 |
Ending balance | 42,906 | 47,048 |
Purchase commitments | ||
Assets | ||
Beginning balance | 9,356 | |
Total gain (loss) included in earnings | 0 | |
Purchases and additions | 0 | |
Sales and settlements | (9,356) | |
Transfers in (out) between categories | 0 | |
Ending balance | 0 | |
HMBS related obligations | ||
Liabilities | ||
Beginning balance | (17,353,720) | (10,996,755) |
Total gain (loss) included in earnings | (487,559) | (147,451) |
Purchases and additions | (468,520) | (5,648,041) |
Settlements | 482,739 | 384,618 |
Ending balance | (17,827,060) | (16,407,629) |
Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability | ||
Liabilities | ||
Beginning balance | (7,876,932) | (7,175,857) |
Total gain (loss) included in earnings | (55,487) | (237,315) |
Purchases and additions | (128,185) | (639,499) |
Settlements | 177,132 | 96,796 |
Ending balance | (7,883,472) | (7,955,875) |
Nonrecourse commercial loan financing liability | ||
Liabilities | ||
Beginning balance | (27,268) | (106,758) |
Total gain (loss) included in earnings | 8,863 | 381 |
Purchases and additions | 0 | (22,600) |
Settlements | 3,981 | 53,288 |
Ending balance | (14,424) | (75,689) |
Nonrecourse MSR financing liability | ||
Liabilities | ||
Beginning balance | (60,562) | |
Total gain (loss) included in earnings | 748 | |
Purchases and additions | 0 | |
Settlements | 58,826 | |
Ending balance | (988) | |
Deferred purchase price liabilities | ||
Liabilities | ||
Beginning balance | (4,318) | (137) |
Total gain (loss) included in earnings | 1,524 | 0 |
Purchases and additions | 0 | (4,385) |
Settlements | 0 | 0 |
Ending balance | (2,794) | (4,522) |
TRA obligation | ||
Liabilities | ||
Beginning balance | (4,537) | (3,781) |
Total gain (loss) included in earnings | (287) | 1,579 |
Purchases and additions | 0 | 0 |
Settlements | 0 | 0 |
Ending balance | $ (4,824) | $ (2,202) |
Fair Value - Summary of Fair Va
Fair Value - Summary of Fair Value and Unpaid Principal Balance ("UPB") of Financial Assets and Liabilities With Elected Fair Value Option (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Estimated Fair Value | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets at fair value under the fair value option | $ 18,050,772 | $ 17,548,763 |
Estimated Fair Value | Loans held for investment | Reverse mortgage loans | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets at fair value under the fair value option | 535,159 | 574,271 |
Estimated Fair Value | Loans held for investment | Commercial mortgage loans | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets at fair value under the fair value option | 751 | 957 |
Estimated Fair Value | Loans held for sale | Loans held for sale - residential mortgage loans | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets at fair value under the fair value option | 2,465 | 4,246 |
Estimated Fair Value | HMBS related obligations | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Liabilities at fair value under the fair value option | 17,827,060 | 17,353,720 |
Estimated Fair Value | Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Liabilities at fair value under the fair value option | 7,883,472 | 7,876,932 |
Estimated Fair Value | Nonrecourse commercial loan financing liability | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Liabilities at fair value under the fair value option | 14,424 | 27,268 |
Estimated Fair Value | Reverse mortgage loans | Loans held for investment, subject to nonrecourse debt: | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets at fair value under the fair value option | 8,327,915 | 8,138,403 |
Estimated Fair Value | Commercial mortgage loans | Loans held for investment, subject to nonrecourse debt: | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets at fair value under the fair value option | 79,687 | 133,990 |
Unpaid Principal Balance | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets at fair value under the fair value option | 17,113,496 | 16,875,437 |
Unpaid Principal Balance | Loans held for investment | Reverse mortgage loans | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets at fair value under the fair value option | 519,237 | 558,577 |
Unpaid Principal Balance | Loans held for investment | Commercial mortgage loans | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets at fair value under the fair value option | 1,044 | 1,044 |
Unpaid Principal Balance | Loans held for sale | Loans held for sale - residential mortgage loans | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets at fair value under the fair value option | 6,997 | 9,247 |
Unpaid Principal Balance | HMBS related obligations | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Liabilities at fair value under the fair value option | 17,113,496 | 16,875,437 |
Unpaid Principal Balance | Nonrecourse debt in consolidated VIE trusts and reverse loan financing liability | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Liabilities at fair value under the fair value option | 8,447,617 | 8,429,135 |
Unpaid Principal Balance | Nonrecourse commercial loan financing liability | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Liabilities at fair value under the fair value option | 22,295 | 26,661 |
Unpaid Principal Balance | Reverse mortgage loans | Loans held for investment, subject to nonrecourse debt: | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets at fair value under the fair value option | 8,483,961 | 8,257,750 |
Unpaid Principal Balance | Commercial mortgage loans | Loans held for investment, subject to nonrecourse debt: | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Assets at fair value under the fair value option | $ 92,561 | $ 136,622 |
Fair Value - Summary of Compone
Fair Value - Summary of Components of Net Fair Value Gains On Loans and Related Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | ||
Net origination gains | $ 39,657 | $ 24,475 |
Interest income on mortgage loans | 460,034 | 309,494 |
Interest expense on HMBS and nonrecourse obligations | (373,736) | (224,391) |
Servicing related income, net | 10,726 | 4,391 |
Fair value changes from model amortization | (57,608) | (50,266) |
Net fair value gains from portfolio activity | 39,416 | 39,228 |
Net fair value gains from changes in market inputs or model assumptions | 13,562 | 112,691 |
Net fair value gains on loans and related obligations | $ 92,635 | $ 176,394 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value Disclosures [Abstract] | ||
Notes payable, carrying value | $ 436,193 | $ 410,911 |
Notes payable, fair value | $ 373,900 | $ 345,600 |
Reverse Mortgage Portfolio Co_2
Reverse Mortgage Portfolio Composition - Summary of the Composition and the Remaining UPBs of the Reverse Mortgage Loan Portfolio (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reverse mortgage loans held for investment, subject to HMBS related obligations | $ 17,113,496 | $ 16,875,437 |
Reverse mortgage loans held for investment, subject to nonrecourse debt | 8,483,961 | 8,257,750 |
Reverse mortgage loans held for investment | 519,237 | 558,577 |
Serviced reverse mortgage loan portfolio | $ 26,345,895 | 25,951,142 |
Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of unpoolable loan | 98% | |
Total owned reverse mortgage portfolio | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Serviced reverse mortgage loan portfolio | $ 26,116,694 | 25,691,764 |
Loans reclassified as government guaranteed receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Serviced reverse mortgage loan portfolio | 72,981 | 94,636 |
Loans serviced for others | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Serviced reverse mortgage loan portfolio | 156,220 | 164,742 |
Nonperforming HECM buyouts | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Nonperforming HECM buyouts | 382,644 | 409,965 |
Performing HECM buyouts | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reverse mortgage loans held for investment, subject to nonrecourse debt | 215,839 | 216,184 |
Non-agency reverse mortgages | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reverse mortgage loans held for investment, subject to nonrecourse debt | 7,885,478 | 7,631,601 |
Non-agency reverse mortgages | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reverse mortgage loans held for investment | 243,500 | 241,424 |
Loans not securitized | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reverse mortgage loans held for investment | 107,309 | 101,820 |
Unpoolable loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reverse mortgage loans held for investment | 157,032 | 203,957 |
Unpoolable HECM tails | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reverse mortgage loans held for investment | $ 11,396 | $ 11,376 |
Reverse Mortgage Portfolio Co_3
Reverse Mortgage Portfolio Composition - Summarizes the Owned Reverse Mortgage Portfolio by Product Type (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Owned reverse mortgage portfolio | $ 26,116,694 | $ 25,691,764 |
Fixed rate loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Owned reverse mortgage portfolio | 6,951,821 | 6,817,176 |
Adjustable rate loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Owned reverse mortgage portfolio | $ 19,164,873 | $ 18,874,588 |
Reverse Mortgage Portfolio Co_4
Reverse Mortgage Portfolio Composition - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Receivables [Abstract] | ||
Foreclosure proceedings in process, amount | $ 463.1 | $ 525 |
Loans, at Fair Value - Loans He
Loans, at Fair Value - Loans Held For Investment And Held For Sale (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Loans held for investment, subject to HMBS related obligations | ||
Unpaid Principal Balance | $ 17,113,496 | $ 16,875,437 |
Fair Value Adjustments | 937,276 | 673,326 |
Estimated Fair Value | 18,050,772 | 17,548,763 |
Loans held for investment, subject to nonrecourse debt: | ||
Unpaid Principal Balance | 8,576,522 | 8,394,372 |
Fair Value Adjustments | (168,920) | (121,979) |
Estimated Fair Value | 8,407,602 | 8,272,393 |
Loans held for investment | ||
Unpaid Principal Balance | 520,281 | 559,621 |
Fair Value Adjustments | 15,629 | 15,607 |
Estimated Fair Value | 535,910 | 575,228 |
Loans held for sale | ||
Total loan portfolio, Unpaid Principal Balance | 26,217,296 | 25,838,677 |
Total loan portfolio, Fair Value Adjustments | 779,453 | 561,953 |
Total loan portfolio, Estimated Fair Value | 26,996,749 | 26,400,630 |
Reverse mortgage loans | ||
Loans held for investment, subject to nonrecourse debt: | ||
Unpaid Principal Balance | 8,483,961 | 8,257,750 |
Fair Value Adjustments | (156,046) | (119,347) |
Estimated Fair Value | 8,327,915 | 8,138,403 |
Loans held for investment | ||
Unpaid Principal Balance | 519,237 | 558,577 |
Fair Value Adjustments | 15,922 | 15,694 |
Estimated Fair Value | 535,159 | 574,271 |
Commercial mortgage loans | ||
Loans held for investment, subject to nonrecourse debt: | ||
Unpaid Principal Balance | 92,561 | 136,622 |
Fair Value Adjustments | (12,874) | (2,632) |
Estimated Fair Value | 79,687 | 133,990 |
Loans held for investment | ||
Unpaid Principal Balance | 1,044 | 1,044 |
Fair Value Adjustments | (293) | (87) |
Estimated Fair Value | 751 | 957 |
Loans held for sale - residential mortgage loans | ||
Loans held for sale | ||
Unpaid Principal Balance | 6,997 | 9,247 |
Fair Value Adjustments | (4,532) | (5,001) |
Estimated Fair Value | 2,465 | 4,246 |
Pledged As Collateral, Financing Lines Of Credit | ||
Loans held for investment | ||
Unpaid Principal Balance | $ 484,900 | $ 487,900 |
Loans, at Fair Value - Loans Th
Loans, at Fair Value - Loans That Were Greater Than 90 Days Past Due And On Non-Accrual Status (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Loans held for sale | ||
Total loans 90 days or more past due and on non-accrual status, Unpaid Principal Balance | $ 38,218 | $ 38,439 |
Total loans 90 days or more past due and on non-accrual status, Estimated Fair Value | 28,066 | 31,672 |
Total loans 90 days or more past due and on non-accrual status, Difference | (10,152) | (6,767) |
Commercial mortgage loans | ||
Loans held for investment, subject to nonrecourse debt: | ||
Unpaid Principal Balance | 33,243 | 34,115 |
Estimated Fair Value | 27,295 | 31,244 |
Difference | (5,948) | (2,871) |
Loans held for investment | ||
Unpaid Principal Balance | 1,044 | |
Estimated Fair Value | 751 | |
Difference | (293) | |
Loans held for sale - residential mortgage loans | ||
Loans held for sale | ||
Unpaid Principal Balance | 3,931 | 4,324 |
Estimated Fair Value | 20 | 428 |
Difference | $ (3,911) | $ (3,896) |
Loans, at Fair Value - Summary
Loans, at Fair Value - Summary Of Reconciliation Of Changes In Loans Held For Sale (Detail) - Loans Held-For-Sale - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Fair Value, Option, Loans Held As Assets [Roll Forward] | ||
Beginning balance | $ 4,246 | $ 173,984 |
Originations/purchases/repurchases | 2,284 | 79,286 |
Proceeds from sales | (4,151) | (200,456) |
Net transfers related to loans held for sale | 0 | 15,580 |
Net transfers related to discontinued operations | 0 | 12,526 |
Gain (loss) on loans held for sale, net | 86 | (12,387) |
Net fair value gain on loans held for sale | 0 | 8,961 |
Ending balance | $ 2,465 | $ 77,494 |
HMBS Related Obligations, at _3
HMBS Related Obligations, at Fair Value - Summary of HMBS Related Obligations, At Fair Value (Detail) - Home Equity Conversion Mortgage Backed Security - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Home Equity Conversion Mortgage Backed Security Related to Obligations At Fair Value [Line Items] | |||
Ginnie Mae loan pools - UPB | $ 17,113,496 | $ 16,875,437 | |
Fair value adjustments | 713,564 | 478,283 | |
Total HMBS related obligations, at fair value | $ 17,827,060 | $ 17,353,720 | |
Weighted average remaining life (in years) | 4 years | 4 years 1 month 6 days | |
Weighted average interest rate | 6.40% | 6.60% |
HMBS Related Obligations, at _4
HMBS Related Obligations, at Fair Value - Narrative (Details) - LoanPools | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Debt Disclosure [Abstract] | ||
Ginnie Mae loan pools | 2,622,000 | 2,552,000 |
Nonrecourse Debt, at Fair Val_3
Nonrecourse Debt, at Fair Value - Summary of Nonrecourse Debt at Fair Value (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||
Nonrecourse debt, at fair value | $ 7,897,896 | $ 7,904,200 |
Nonrecourse | ||
Debt Instrument [Line Items] | ||
Unpaid Principal Balance | 8,102,330 | 8,087,453 |
Nonrecourse reverse loan financing liability | 345,287 | 341,682 |
Nonrecourse commercial loan financing liability | 22,295 | 26,661 |
Fair value adjustments | $ (572,016) | (551,596) |
Securitization of performing/nonperforming HECM loans | ||
Debt Instrument [Line Items] | ||
Issue Date | February 2022 - August 2022 | |
Final Maturity Date | February 2032 - August 2032 | |
Original Issue Amount | $ 1,084,935 | |
Securitization of performing/nonperforming HECM loans | Nonrecourse | ||
Debt Instrument [Line Items] | ||
Unpaid Principal Balance | $ 623,988 | 672,911 |
Securitization of performing/nonperforming HECM loans | Minimum | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.69% | |
Securitization of performing/nonperforming HECM loans | Maximum | ||
Debt Instrument [Line Items] | ||
Interest Rate | 9.32% | |
Securitization of non-agency reverse loans | ||
Debt Instrument [Line Items] | ||
Issue Date | May 2018 - February 2024 | |
Final Maturity Date | May 2050 - February 2074 | |
Original Issue Amount | $ 9,192,451 | |
Securitization of non-agency reverse loans | Nonrecourse | ||
Debt Instrument [Line Items] | ||
Unpaid Principal Balance | $ 7,430,291 | 7,331,305 |
Securitization of non-agency reverse loans | Minimum | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.25% | |
Securitization of non-agency reverse loans | Maximum | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.50% | |
Securitization of commercial loans | ||
Debt Instrument [Line Items] | ||
Issue Date | April 2021 | |
Final Maturity Date | May 2025 | |
Original Issue Amount | $ 268,511 | |
Securitization of commercial loans | Nonrecourse | ||
Debt Instrument [Line Items] | ||
Unpaid Principal Balance | $ 48,051 | $ 83,237 |
Securitization of commercial loans | Minimum | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.10% | |
Securitization of commercial loans | Maximum | ||
Debt Instrument [Line Items] | ||
Interest Rate | 5.40% |
Nonrecourse Debt, at Fair Val_4
Nonrecourse Debt, at Fair Value - Summary Of Estimated Maturities For Nonrecourse Debt Fair Value (Detail) - Nonrecourse $ in Thousands | Mar. 31, 2024 USD ($) |
Debt Instrument [Line Items] | |
Remainder of 2024 | $ 1,277,278 |
2025 | 1,539,192 |
2026 | 2,825,222 |
2027 | 304,009 |
2028 | 298,924 |
Thereafter | 2,225,287 |
Total payments on nonrecourse debt | $ 8,469,912 |
Other Financing Lines of Cred_3
Other Financing Lines of Credit - Summary Of Components of Other Financing Lines of Credit (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Line of Credit Facility [Line Items] | ||
Total Capacity | $ 1,598,935 | |
Outstanding borrowings | 1,071,191 | $ 928,479 |
Reverse Lines | ||
Line of Credit Facility [Line Items] | ||
Total Capacity | 1,530,728 | |
Outstanding borrowings | 1,014,038 | 870,136 |
Reverse Lines | June 2024 - October 2026, First Lien Mortgages | ||
Line of Credit Facility [Line Items] | ||
Total Capacity | 932,500 | |
Outstanding borrowings | 433,829 | 432,918 |
Reverse Lines | Various Maturities, Mortgage Related Assets | ||
Line of Credit Facility [Line Items] | ||
Total Capacity | 498,228 | |
Outstanding borrowings | 482,228 | 344,367 |
Reverse Lines | October 2027, MSR | ||
Line of Credit Facility [Line Items] | ||
Total Capacity | 70,000 | |
Outstanding borrowings | 69,231 | 69,231 |
Reverse Lines | October 2024, Unsecuritized Tails | ||
Line of Credit Facility [Line Items] | ||
Total Capacity | 30,000 | |
Outstanding borrowings | 28,750 | 23,620 |
Mortgage Lines | ||
Line of Credit Facility [Line Items] | ||
Total Capacity | 48,207 | |
Outstanding borrowings | 37,153 | 38,343 |
Mortgage Lines | Various Maturities, Mortgage Related Assets | ||
Line of Credit Facility [Line Items] | ||
Total Capacity | 35,707 | |
Outstanding borrowings | 35,707 | 36,208 |
Mortgage Lines | October 2024, First Lien Mortgages | ||
Line of Credit Facility [Line Items] | ||
Total Capacity | 12,500 | |
Outstanding borrowings | 1,446 | 2,135 |
Commercial Lines | July 2024, Mortgage Related Assets | ||
Line of Credit Facility [Line Items] | ||
Total Capacity | 20,000 | |
Outstanding borrowings | $ 20,000 | $ 20,000 |
Other Financing Lines of Cred_4
Other Financing Lines of Credit - Narrative (Details) | Mar. 31, 2024 | Dec. 31, 2023 |
Line of credit | ||
Line of Credit Facility [Line Items] | ||
Financing line of credit outstanding, weighted average interest rate | 6.54% | 6.90% |
Other Financing Lines of Cred_5
Other Financing Lines of Credit - Summary Of Maximum Allowable Distributions Available To The Company Based On The Most Restrictive Of Such Financial Covenant Ratios (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
FAM | ||
Debt Instrument Covenant Description [Line Items] | ||
Adjusted Tangible Net Worth | $ 10,667 | $ 15,264 |
Liquidity | 2,300 | 2,254 |
FAR | ||
Debt Instrument Covenant Description [Line Items] | ||
Adjusted Tangible Net Worth | 474,156 | 447,571 |
Liquidity | $ 42,731 | $ 41,656 |
Debt instrument, covenant, leverage ratio | 3.2 | 3 |
FAH | ||
Debt Instrument Covenant Description [Line Items] | ||
Adjusted Tangible Net Worth | $ 456,467 | $ 446,321 |
Liquidity | $ 45,763 | $ 45,282 |
Debt instrument, covenant, leverage ratio | 3.7 | 3.3 |
Requirement | FAM | ||
Debt Instrument Covenant Description [Line Items] | ||
Adjusted Tangible Net Worth | $ 10,000 | $ 10,000 |
Liquidity | 1,000 | 1,000 |
Requirement | FAR | ||
Debt Instrument Covenant Description [Line Items] | ||
Adjusted Tangible Net Worth | 250,000 | 250,000 |
Liquidity | $ 40,000 | $ 40,000 |
Debt instrument, covenant, leverage ratio | 6 | 6 |
Requirement | FAH | ||
Debt Instrument Covenant Description [Line Items] | ||
Adjusted Tangible Net Worth | $ 220,000 | $ 220,000 |
Liquidity | $ 40,000 | $ 40,000 |
Debt instrument, covenant, leverage ratio | 10 | 10 |
Maximum Allowable Distribution | FAM | ||
Debt Instrument Covenant Description [Line Items] | ||
Adjusted Tangible Net Worth | $ 667 | $ 5,264 |
Liquidity | 1,300 | 1,254 |
Maximum Allowable Distribution | FAR | ||
Debt Instrument Covenant Description [Line Items] | ||
Adjusted Tangible Net Worth | 224,156 | 197,571 |
Liquidity | $ 2,731 | $ 1,656 |
Debt instrument, covenant, leverage ratio | 219,827 | 223,460,000 |
Maximum Allowable Distribution | FAH | ||
Debt Instrument Covenant Description [Line Items] | ||
Adjusted Tangible Net Worth | $ 236,467 | $ 226,321 |
Liquidity | $ 5,763 | $ 5,282 |
Debt instrument, covenant, leverage ratio | 288,165 | 297,445,000 |
Litigation (Details)
Litigation (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 USD ($) lawsuit | Mar. 31, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Number of claims | 3 | |
Number of claims settled | 1 | |
Remaining claims | 2 | |
Legal expenses | $ | $ 0.3 | $ 0.9 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Equal or greater than | ||
Commitments and Contingencies [Line Items] | ||
Outstanding principal balance of HECM is equal to or greater than MCA (in percent) | 98% | |
Outstanding principal balance is equal to or greater than MCA (in percent) | 98% | |
Loan origination commitments | ||
Commitments and Contingencies [Line Items] | ||
Long-term purchase commitment | $ 1,400,000 | $ 4,700,000 |
HECM loans | ||
Commitments and Contingencies [Line Items] | ||
Unfunded loan commitments | 4,500,000,000 | 4,500,000,000 |
Commercial mortgage loans | ||
Commitments and Contingencies [Line Items] | ||
Unfunded loan commitments | $ 14,900,000 | $ 21,400,000 |
Business Segment Reporting (Det
Business Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Segment Reporting Information [Line Items] | |||
Fee income | $ 6,236 | $ 6,352 | |
Interest income | 4,266 | 2,091 | |
Interest expense | (28,541) | (31,556) | |
Total revenues | 74,682 | 140,855 | |
Total expenses | 91,315 | 83,777 | |
Impairment of other assets | (600) | 0 | |
Other, net | 1,453 | 936 | |
Net income (loss) before taxes | (15,780) | 58,014 | |
Depreciation and amortization | 9,678 | 10,105 | |
Total assets | 27,683,568 | $ 27,107,590 | |
Continuing Operations | |||
Segment Reporting Information [Line Items] | |||
Net fair value gains on loans and related obligations | 92,635 | 176,394 | |
Fee income | 6,236 | 6,352 | |
Gain (loss) on sale and other income from loans held for sale, net | 86 | (12,426) | |
Interest income | 4,266 | 2,091 | |
Interest expense | (28,541) | (31,556) | |
Net interest expense | (24,275) | (29,465) | |
Total revenues | 74,682 | 140,855 | |
Total expenses | 91,315 | 83,777 | |
Impairment of other assets | (600) | ||
Other, net | 1,453 | 936 | |
Net income (loss) before taxes | (15,780) | 58,014 | |
Depreciation and amortization | 9,678 | 10,105 | |
Total assets | 27,676,278 | 26,674,539 | |
Operating segments | Retirement Solutions And Portfolio Management | Continuing Operations | |||
Segment Reporting Information [Line Items] | |||
Net fair value gains on loans and related obligations | 92,635 | 176,394 | |
Fee income | 6,359 | 8,643 | |
Gain (loss) on sale and other income from loans held for sale, net | 86 | (12,370) | |
Interest income | 3,945 | 1,470 | |
Interest expense | (20,068) | (23,996) | |
Net interest expense | (16,123) | (22,526) | |
Total revenues | 82,957 | 150,141 | |
Total expenses | 72,163 | 60,203 | |
Impairment of other assets | 0 | ||
Other, net | (174) | 31 | |
Net income (loss) before taxes | 10,620 | 89,969 | |
Depreciation and amortization | 9,496 | 9,657 | |
Total assets | 27,625,946 | 26,623,676 | |
Operating segments | Retirement Solutions | Continuing Operations | |||
Segment Reporting Information [Line Items] | |||
Net fair value gains on loans and related obligations | 39,657 | 24,475 | |
Fee income | 6,127 | 3,180 | |
Gain (loss) on sale and other income from loans held for sale, net | (76) | (1,312) | |
Interest income | 0 | 0 | |
Interest expense | 0 | 0 | |
Net interest expense | 0 | 0 | |
Total revenues | 45,708 | 26,343 | |
Total expenses | 49,410 | 35,524 | |
Impairment of other assets | 0 | ||
Other, net | (174) | 31 | |
Net income (loss) before taxes | (3,876) | (9,150) | |
Depreciation and amortization | 9,488 | 9,643 | |
Total assets | 268,786 | 296,417 | |
Operating segments | Portfolio Management | Continuing Operations | |||
Segment Reporting Information [Line Items] | |||
Net fair value gains on loans and related obligations | 52,978 | 151,919 | |
Fee income | 232 | 5,463 | |
Gain (loss) on sale and other income from loans held for sale, net | 162 | (11,058) | |
Interest income | 3,945 | 1,470 | |
Interest expense | (20,068) | (23,996) | |
Net interest expense | (16,123) | (22,526) | |
Total revenues | 37,249 | 123,798 | |
Total expenses | 22,753 | 24,679 | |
Impairment of other assets | 0 | ||
Other, net | 0 | 0 | |
Net income (loss) before taxes | 14,496 | 99,119 | |
Depreciation and amortization | 8 | 14 | |
Total assets | 27,357,160 | 26,327,259 | |
Operating segments | Corporate and Other | Continuing Operations | |||
Segment Reporting Information [Line Items] | |||
Net fair value gains on loans and related obligations | 0 | 0 | |
Fee income | 0 | 2,953 | |
Gain (loss) on sale and other income from loans held for sale, net | 0 | 0 | |
Interest income | 321 | 621 | |
Interest expense | (8,473) | (7,560) | |
Net interest expense | (8,152) | (6,939) | |
Total revenues | (8,152) | (3,986) | |
Total expenses | 19,275 | 28,874 | |
Impairment of other assets | (600) | ||
Other, net | 1,627 | 905 | |
Net income (loss) before taxes | (26,400) | (31,955) | |
Depreciation and amortization | 182 | 448 | |
Total assets | 1,455,417 | 1,912,801 | |
Eliminations | Continuing Operations | |||
Segment Reporting Information [Line Items] | |||
Net fair value gains on loans and related obligations | 0 | 0 | |
Fee income | (123) | (5,244) | |
Gain (loss) on sale and other income from loans held for sale, net | 0 | (56) | |
Interest income | 0 | 0 | |
Interest expense | 0 | 0 | |
Net interest expense | 0 | 0 | |
Total revenues | (123) | (5,300) | |
Total expenses | (123) | (5,300) | |
Impairment of other assets | 0 | ||
Other, net | 0 | 0 | |
Net income (loss) before taxes | 0 | 0 | |
Depreciation and amortization | 0 | 0 | |
Total assets | $ (1,405,085) | $ (1,861,938) |
Liquidity and Capital Require_2
Liquidity and Capital Requirements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | [1] | ||
Liquidity And Capital Requirements [Line Items] | |||||
Cash and cash equivalents | $ 48,229 | [1] | $ 46,482 | $ 103,141 | |
Minimum net capital requirement | 250 | ||||
FAM | |||||
Liquidity And Capital Requirements [Line Items] | |||||
Net worth | $ 5,000 | ||||
FAR commitment with addition to net worth (in percent) | 1% | ||||
Liquidity (in percent) | 20% | ||||
Net worth to total assets (in percent) | 6% | ||||
Minimum tangible net worth required | $ 177,100 | ||||
Tangible capital, actual | 466,200 | ||||
Cash | 35,400 | ||||
Cash and cash equivalents | 42,700 | ||||
Minimum adjusted net worth balance of capital requirements | 10,100 | ||||
Adjusted balance of capital requirements | 10,667 | $ 15,264 | |||
FAM | MISSOURI | |||||
Liquidity And Capital Requirements [Line Items] | |||||
Adjusted balance of capital requirements | $ 10,300 | ||||
[1] (1) Amounts presented contain results from both continuing and discontinued operations. Refer to Note 4 - Discontinued Operations for additional information regarding cash flow associated with the results of discontinued operations. |
Related-Party Transactions (Det
Related-Party Transactions (Details) $ in Thousands | 3 Months Ended | ||||||
May 15, 2024 | Mar. 31, 2023 USD ($) shares | Dec. 06, 2022 USD ($) day shares | Mar. 31, 2024 USD ($) note | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Nov. 30, 2020 USD ($) | |
Related Party Transaction [Line Items] | |||||||
Notes payable, related party amount | $ 436,193 | $ 410,911 | |||||
Interest expense | $ 28,541 | $ 31,556 | |||||
Working Capital Promissory Notes | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Number of promissory notes | note | 2,000 | ||||||
Interest rate (in percent) | 10% | ||||||
Notes payable, related party amount | $ 84,600 | 59,100 | |||||
Interest expense | 1,200 | $ 400 | |||||
Working Capital Promissory Notes | Affiliated Entity | Forecast | |||||||
Related Party Transaction [Line Items] | |||||||
Interest rate (in percent) | 15% | ||||||
Working Capital Promissory Notes | Related Party | |||||||
Related Party Transaction [Line Items] | |||||||
Notes payable, related party amount | $ 84,630 | $ 59,130 | |||||
Promissory Notes | Related Party | |||||||
Related Party Transaction [Line Items] | |||||||
Original Issue Amount | $ 135,000 | ||||||
Stock Purchase Agreement | Related Party | Common Class A | |||||||
Related Party Transaction [Line Items] | |||||||
Share price, volume weighted average price, number of consecutive trading days | day | 15 | ||||||
Stock Purchase Agreement | Related Party | Blackstone Investor | Common Class A | |||||||
Related Party Transaction [Line Items] | |||||||
Numbers of shares purchased by investors | shares | 10,869,566 | ||||||
Aggregate purchase price of shares purchased by investors | $ 15,000 | ||||||
Stock Purchase Agreement | Related Party | BL Investor | Common Class A | |||||||
Related Party Transaction [Line Items] | |||||||
Numbers of shares purchased by investors | shares | 10,869,566 | ||||||
Aggregate purchase price of shares purchased by investors | $ 15,000 | ||||||
Stock Purchase Agreement | Related Party | Blackstone Investor and BL Investor | Common Class A | |||||||
Related Party Transaction [Line Items] | |||||||
Numbers of shares purchased by investors | shares | 21,739,132 | ||||||
Aggregate purchase price of shares purchased by investors | $ 30,000 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Basic Earnings Per Share by Common Class (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator | ||
Net income (loss) from continuing operations | $ (15,780) | $ 55,482 |
Less: Income (loss) from continuing operations attributable to noncontrolling interest | (10,145) | 36,755 |
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - basic | (5,635) | 18,727 |
Net loss from discontinued operations | (4,524) | (40,890) |
Less: Loss from discontinued operations attributable to noncontrolling interest | (2,621) | (25,217) |
Net loss from discontinued operations attributable to holders of Class A Common Stock - basic | $ (1,903) | $ (15,673) |
Denominator | ||
Weighted average shares of Class A Common Stock outstanding - basic (in shares) | 96,485,585 | 64,016,845 |
Basic net income (loss) per share | ||
Continuing operations (in USD per share) | $ (0.06) | $ 0.29 |
Discontinued operations (in USD per share) | (0.02) | (0.24) |
Basic net income (loss) per share (in usd per share) | $ (0.08) | $ 0.05 |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Diluted Earnings Per Share by Common Class (Detail) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 units shares | Mar. 31, 2024 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) $ / shares shares | |
Numerator | |||
Net loss from discontinued operations attributable to holders of Class A Common Stock - basic | $ | $ (1,903) | $ (15,673) | |
Reallocation of net loss from discontinued operations assuming exchange of Class A LLC Units | $ | 0 | (12,470) | |
Net loss from discontinued operations attributable to holders of Class A Common Stock - diluted | $ | $ (1,903) | $ (28,143) | |
Denominator | |||
Weighted average shares of Class A Common Stock outstanding - basic (in shares) | 96,485,585 | 64,016,845 | |
Forward sale share contracts - dilutive shares under the treasury stock method (in shares) | 0 | 2,124,214 | |
Weighted average shares of Class A Common Stock outstanding - diluted (in shares) | 96,485,585 | 190,301,012 | |
Diluted net income (loss) per share | |||
Continuing operations (in usd per shares) | $ / shares | $ (0.06) | $ 0.22 | |
Discontinued operations (in usd per share) | $ / shares | (0.02) | (0.15) | |
Diluted net income (loss) per share (in USD per share) | $ / shares | $ (0.08) | $ 0.07 | |
Exchange ratio | 1 | ||
Exchange Agreement | |||
Diluted net income (loss) per share | |||
Weighted-average anti-dilutive securities excluded from the computation of diluted earnings per share (in shares) | 132,947,368 | ||
American Advisors Group (AAG) | Class A LLC Units | |||
Diluted net income (loss) per share | |||
Contingent equity consideration, number of types | units | 2 | ||
American Advisors Group (AAG) | Class A LLC Units, Equity Classified, Indemnity Holdback | |||
Diluted net income (loss) per share | |||
Contingent equity consideration (in shares) | 7,142,260 | ||
American Advisors Group (AAG) | Class A LLC Units, Liability Classified | |||
Diluted net income (loss) per share | |||
Contingent equity consideration (in shares) | 7,058,416 | ||
Common Class A | |||
Numerator | |||
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - basic | $ | $ (5,635) | $ 18,727 | |
Reallocation of net income from continuing operations assuming exchange of Class A LLC Units | $ | 0 | 23,328 | |
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - diluted | $ | $ (5,635) | $ 42,055 | |
Denominator | |||
Weighted average shares of Class A Common Stock outstanding - basic (in shares) | 96,485,585 | 64,016,845 | |
Assumed exchange of weighted average Class A LLC Units for shares of Class A Common Stock (in shares) | 0 | 124,159,953 | |
Weighted average shares of Class A Common Stock outstanding - diluted (in shares) | 96,485,585 | 190,301,012 | |
Diluted net income (loss) per share | |||
Diluted net income (loss) per share (in USD per share) | $ / shares | $ (0.08) | $ 0.07 | |
Award vesting cost responsibility (in percent) | 85% |
Equity (Detail)
Equity (Detail) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 units shares | Mar. 31, 2024 $ / shares shares | Mar. 31, 2023 shares | Dec. 31, 2023 $ / shares shares | |
Class of Stock [Line Items] | ||||
Exchange ratio | 1 | |||
Common Class A | ||||
Class of Stock [Line Items] | ||||
Common stock, shares issued (in shares) | 100,820,259 | 100,599,241 | ||
Common stock, shares outstanding (in shares) | 96,561,759 | 96,340,741 | ||
Common stock shares outstanding unvested portion (in shares) | 4,258,500 | |||
Stocks delivered | 14,913 | 98,424 | ||
Class B share retirement (in shares) | 139,730 | 292,360 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Class A LLC Units | ||||
Class of Stock [Line Items] | ||||
Stocks delivered | 88,289 | 582,698 | ||
Common Class B | ||||
Class of Stock [Line Items] | ||||
Common stock, shares issued (in shares) | 15 | 15 | ||
Common stock, shares outstanding (in shares) | 15 | 15 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common Class B | American Advisors Group (AAG) | ||||
Class of Stock [Line Items] | ||||
Shares issued at closing of transaction | 1 | |||
Capital Unit, Class A | ||||
Class of Stock [Line Items] | ||||
Common stock, shares issued (in shares) | 100,820,259 | |||
Conversion of stock, shares converted (in shares) | 618 | 3,601 | ||
Class A LLC Units | ||||
Class of Stock [Line Items] | ||||
Common units outstanding (in shares) | 229,443,668 | |||
Class A LLC Units | American Advisors Group (AAG) | ||||
Class of Stock [Line Items] | ||||
Shares issued at closing of transaction | 19,692,990 | |||
Contingent equity consideration, number of types | units | 2 | |||
Class A LLC Units | Noncontrolling Interest | ||||
Class of Stock [Line Items] | ||||
Common units outstanding (in shares) | 132,881,909 | |||
Class A LLC Units | Noncontrolling Interest | American Advisors Group (AAG) | ||||
Class of Stock [Line Items] | ||||
Conversion of stock, shares converted (in shares) | 8,000,000 | |||
Class A LLC Units | Class A Common Stock Shareholders | ||||
Class of Stock [Line Items] | ||||
Common units outstanding (in shares) | 96,561,759 | |||
Class A LLC Units, Equity Classified, Indemnity Holdback | American Advisors Group (AAG) | ||||
Class of Stock [Line Items] | ||||
Contingent equity consideration (in shares) | 7,142,260 | |||
Class A LLC Units, Liability Classified | American Advisors Group (AAG) | ||||
Class of Stock [Line Items] | ||||
Contingent equity consideration (in shares) | 7,058,416 |