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Finance of America hit with layoffs; chief retail sales officer steps down | Black Kite Express

Leading reverse mortgage lender Finance of America (FOA) has suffered 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 the acquisition of the former industry leader. American Advisory Group (AAG), the company has also struggled with tax challenges, according to recent earnings reports and a looming threat of the NYSE (NYSE) that could see its shares delisted.

Company statement

In a statement provided to housing wire, FOA President Kristen Sieffert explained the reason for the layoffs.

Kristen Sieffert

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

“Our primary focus is creating a modern retirement that focuses 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,” he said.

It was not specified how many employees or which specific divisions were affected.

Sieffert added that Paul Fiore, who most recently served as FOA’s director of retail sales and joined with the AAG acquisition, “made the decision to pursue other career opportunities and we wish him the best in his future endeavors.”

Sieffert added that Fiore’s successor has already been chosen.

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

Paul Fiore, director of retail sales at Finance of America Reverse.
Pablo Fiore

In a public post on LinkedIn, Fiore thanked him for his time at both the 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 everything we did as a team. (…) I believed in leadership from our CEO and was excited to take on the challenge of building a business from the ground up.

“Going from a small brokerage company to over 2,000 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 incredible group of people I have had the honor of working with ”he stated. aggregate.

Recent history

In a trading update sent to the company’s shareholders in April, the company explained that the acquisition of AAG resulted in “aggressive actions to resize its origins and management workforce to align with continued operations.” The company reportedly reduced its overall workforce by approximately 30% from its Q2 2023 peak following the AAG acquisition.

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

The company is also transitioning to what it calls a “leveraged, cash-generating business model,” which it plans to achieve by “monetizing its existing balance sheet while new creations generate free cash flow and long-term equity value.” .

This update came immediately after the company received two separate notices from the New York Stock Exchange explaining that its shares could be delisted if its share price performance does not improve. The first notice was issued in December 2023 and the second in February.

The NYSE requires publicly traded stocks to maintain a price of at least $1 per share “for a consecutive period of 30 business days,” but the price has reached that threshold only seven times in 2024. In trading As of the last day of Wednesday, the price is currently $0.59.

Based on Home Equity Conversion Mortgage (HECM) supporting data compiled by Reverse Market Perspective (RMI), FOA remains the industry’s leading lender, underwriting 7,784 loans in the 12-month period ending May 2024.

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