Finance of America hit with layoffs; chief retail sales officer steps down

Leading reverse mortgage lender Finance of America (FOA) has undergone a round of layoffs that are impacting multiple levels of the organization, including retail and corporate leadership positions. The news was first reported by National Mortgage News.

While FOA catapulted to the top spot in the reverse mortgage industry virtually overnight last year after closing on its acquisition of former industry leader American Advisors Group (AAG), the company has also wrestled with fiscal challenges, according to recent earnings reports and a looming threat from the New York Stock Exchange (NYSE) that could see its stock delisted.

Company statement

In a statement provided to HousingWire, FOA President Kristen Sieffert explained the rationale behind the layoffs.

Kristen Sieffert

“Finance of America continually evaluates all aspects of our business to improve operating performance and execute against our strategic plan for long-term growth,” Sieffert said. “Accordingly, we are refining our expenses and eliminating some roles in our retail and corporate divisions as our business simplifies.

“Our core focus is on creating a modern retirement that centers on home equity, and we will continue to make decisions that strengthen our platform and our ability to deliver for our customers, teammates, and investors,” she said.

It was not specified how many employees nor which specific divisions were impacted.

Sieffert added that Paul Fiore, who most recently served as FOA’s chief retail sales officer and who came aboard with the AAG acquisition, has “made the decision to pursue other career opportunities and we wish him well in his future endeavors.”

Sieffert added that Fiore’s successor has been selected.

“At the same time, we are excited to announce that James Mittleman will be leading retail sales and with more than two decades of deep industry experience we are confident James is the right leader at this important inflection point for our company,” she said.

Paul Fiore

In a public post on LinkedIn, Fiore offered gratitude for his time at both FOA and AAG.

“Saying goodbye is never easy. Saying goodbye after 15 years is even harder,” Fiore wrote. “As I look back on my career with AAG/FAR, I am proud of all we did as a team. […] I believed in the leadership of our CEO and was excited to take on the challenge of building a business from the ground up.

“To go from a small broker business to 2000+ employees and the most recognized brand in the reverse mortgage industry was an incredible accomplishment thanks to the hard work and dedication of the most amazing group of people I had the honor of working with,” he added.

Recent history

In a business update issued to company shareholders in April, the company explained that the AAG acquisition led to “aggressive actions to rightsize its originations and back-office headcount to align with continuing operations.” The company reportedly reduced its overall headcount by roughly 30% from its second-quarter 2023 peak following the acquisition of AAG.

This resulted in FOA having “less than 1,000 employees” at the end of 2023, the company explained, leaving the organization “well-positioned to evaluate opportunities for further industry consolidation.”

The company is also transitioning into what it calls a “de-levered, cash-generation business model,” which it plans to accomplish by “monetizing its existing balance sheet while new originations generate free cash flow and long-term equity value.”

This update followed on the heels of the company receiving two separate notices from the NYSE explaining that its stock could be delisted from the exchange if it does not improve the performance of its share price. The first notice was issued in December 2023, with the second issued in February.

NYSE requires that listed stocks maintain a price of at least $1 per share “over a consecutive 30 trading-day period,” but the price has reached that threshold only seven times in 2024. As of late-day trading on Wednesday, the price currently sits at $0.59.

According to Home Equity Conversion Mortgage (HECM) endorsement data compiled by Reverse Market Insight (RMI), FOA remains the industry’s leading lender, endorsing 7,784 loans in the 12-month period ending in May 2024.