FOA 10-K & 10-Q changes, risk factors and insider trading

The Company’s success will depend upon its ability to (1) expand its customer base and acquire and originate reverse mortgage loans efficiently while maintaining loan origination quality, (2) finance its reverse mortgageloan portfolio, and (3) profitably securitize or otherwise monetize its reverse mortgageloan portfolio, all of which will in turn depend upon its ability to manage the unique challenges presented by operating as a unifiedbusiness focused on providing home equity-based financing solutions for a modern retirement solutions platform.retirement.

The Company is principally focused on acquiring, originating, and servicing two types of reverse mortgage loans: FHA-insured HECM loans and non-agency reverse mortgage loans.loans, along with certain traditional home equity loan products. Generally, the Company securitizes HECM loans into HMBS guaranteed by Ginnie Mae and sells the HMBS in the secondary market while retaining the rights to service the HECM.HECM loans. When HECM loans are not eligible for securitization into HMBS or are required to be bought out of a pool of HECM loans previously securitized into an HMBS, the Company securitizes them into privately placed mortgage-backed securitiesMBS or holds them for investment. The Company botheither securitizes non-agency reverse mortgage loans into mortgage-backed securitiesMBS sold to investors andor sells them as whole loans to investors. The Company may also decide to strategically hold certain non-agency reverse mortgage loans for investment. The Company expects to sell traditional home equity loans as whole loans to investors on a servicing released basis. It follows that the Company’s success is driven by the Company’s ability to (1) expand its customer base and acquire and originate reverse mortgage loans efficiently while maintaining loan origination quality, (2) finance its reverse mortgageloan portfolio, and (3) profitably securitize or otherwise monetize its reverse mortgageloan portfolio. In order to do so, the Company will need to be able to manage the challenges presented by operating as a unifiedbusiness focused on providing home equity-based financing solutions for a modern retirement solutions platform without relying on other business lines for support. Historically, under the Company’s more diversified business model, the Company may have been able to rely upon other business lines to mitigate challenges unique to its reverse mortgage business and to help support the Company’s financial condition if the reverse mortgage market experienced adverse circumstances.retirement.

The Company’s ability to expand its customer base and acquire and originate reverse mortgage loans efficiently depends in part upon its ability to develop and offer innovative non-agency products to satisfy the needs of the vast and largely underserved U.S. senior population. This will depend upon the Company’s ability to successfully identify the needs of the U.S. senior population and develop attractive products that successfully address those needs. This will also depend upon the Company’s ability to identify and enter into partnerships that enable the Company to develop or otherwise offer additional products to address the needs of the U.S. senior population. Further, before offering a new non-agency product in a state, the Company is required to obtain regulatory approvals required in such state. Currently certain of the Company’s non-agency products are only available in a limited number of states due to the time necessary to obtain regulatory approvals. In certain states, there may be statutory impediments to being able to offer certain products. If the Company experiences delays in obtaining regulatory approvals for non-agency products or is not able to obtain regulatory approvals in certain states, particularly larger states or states with a larger proportional share of seniors, then the Company’s origination volumes for non-agency products, and ultimately its profitability, may be adversely impacted.

The Company’s ability to expand its customer base and to acquire and originate reverse mortgage loans efficiently also depends in part upon its ability to communicate its product offerings to the U.S. senior population and mortgage broker partners and its ability to engage and transact with interested customers and mortgage broker partners. ThisThe Company will inneed turnto depend upon the Company’s abilitycontinue to successfully develop and implement sales and marketing strategies to communicate the “Finance of America” brand and available offerings. ThisThe Company will also depend upon the Company’s abilityneed to further develop and leverage digital tools to engage with customers and mortgage broker partners in a modern and user friendly way that improves efficiency and the overall ease of transacting. See “—We may fail to realize the anticipated benefits of the efforts we have undertaken to transition to a unified lending platform and to streamline and enhance our marketing and originations operations and digital capabilities.” This will also depend upon the Company’s ability to identify and enter into partnerships that expand the reach of the Company’s product offerings. See “—We may fail to capitalize on strategic partnerships and our strategic partnerships present additional risks to us.”

As a business principally focused on the reversehome mortgageequity-based loanlending market, the Company will need to be able to successfully manage its liquidity and securitize or otherwise monetize its originated loans profitably. Reverse mortgage loan origination is a “cash-light” business because reverse mortgage borrowers are generally not required to make principal and interest payments until loan maturity.maturity, while traditional home equity loan product borrowers are in some cases only required to make interest (but not principal) payments for an initial period. Therefore, there are limited interim cash flows paid to the originator prior to the loans being monetized via a securitization or whole-loan sale. In order to maintain sufficient liquidity to continue to originate new loans and operate our business, the Company relies on the availability of warehouse financings as well as an active secondary market for its loans. Should the Company not be able to maintain sufficient access to warehouse financings or not be able to sell its reverse mortgage loans, or mortgage-backed securitiesMBS backed by its reverse mortgage loans, into the secondary market, it could have a material adverse effect on our liquidity, financial condition, performance, and business. See “—Risks Related to Our Lending Business—If we are unable to obtain sufficient capital to meet the financing requirements of our business, or if we fail to comply with our debt agreements, our business, financing activities, financial condition, and results of operations will be adversely affected.” Additionally, in circumstances where the unpaid principal balance (“UPB”) of a HECM loan securitized into an HMBS issued pursuant to Ginnie Mae’s existing HMBS program reaches 98% of the maximum claim amount (which is the maximum FHA insurance amount available for a HECM loan), the Company is required under Ginnie Mae guidelines to repurchase such HECM loan from the securitization, which requires the Company to maintain additional liquidity or access to capital (in the form of financing capacity or otherwise). The volume of HECM loans that the Company is required to repurchase is expected to increase following the closing of the Company’s acquisition of PHH’s HECM loan servicing portfolio. The Company may also be required to satisfy repurchase demands pursuant to its non-agency loan securitizations and purchase and sale agreements with investors from time to time. If the Company is required to satisfy significant repurchase requirements simultaneously,in excess of its anticipated forecasts, the Company may not have sufficient liquidity or access to capital available to satisfy such demands, which would have a material adverse effect on our business, financial condition, and results of operations. The Company will also need to manage its liquidity and maintain sufficient access to capital to enable the Company to service its existing indebtedness, including to pay amounts due in 20252026 with respect to certain debt facilities.facilities, and to make dividend payments to the holders of its Series A Preferred Stock. See “—Risks Related to Our Indebtedness—Our substantial leverage could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry, or our ability to pay our debts, and could divert our cash flow from operations to debt paymentspayments,” and “—Risks Related to Our Indebtedness —We are required to repay certain debt facilities in whole or in part in 20252026 and such payments will require access to capital, which may not be available from cash flows resulting from our subsidiaries’ operations or from third-party sources on favorable terms, or at all, at the time of repayment, especially in light of current market conditions, which could adversely affect our financial position.position,” and “—Risks Related to Ownership of our Class A Common Stock—The terms of the Company’s Series A Preferred Stock may materially adversely affect the value and rights of the Company’s Class A Common Stock.”

We may fail to realize the anticipated benefits of the efforts we have undertaken to transition to a unified lending platform and to streamline and enhance our marketing and originations operations and digital capabilities.

•failure to effectively utilize enhanced technological and system capabilities; and

See “—Our capital investments in technology may not achieve anticipated returns” and “—We are incorporating artificial intelligenceAI technologies into our processes. These technologies may present business, compliance, and reputational risks.”

While we generated a net profitprofits in 2025 and 2024, we have a recent history of net losses and we may not maintain profitability in the future due to the risks and uncertainties associated with operating as a unifiedbusiness focused on providing home equity-based financing solutions for a modern retirement solutions platform.retirement.

Our ability to maintain profitability will depend on our future expenses and our ability to generate revenue, which are difficult to predict due to the risks and uncertainties associated with operating as a unifiedbusiness focused on providing home equity-based financing solutions for a modern retirement solutions platform,retirement, as outlined herein. The savings and efficiencies we achieve from operating as a unified modern retirement solutions platform may be less significant than we expect. Further, operatingOperating our transformed business model may be more costly than we anticipate and may not result in the revenue growth that we expect. If we incur losses again in the future, such future losses will have an adverse effect on our stockholders’ equity and liquidity. If we are unable to sustain profitability, the market price of our Class A Common Stock may significantly decrease and our ability to raise capital, expand our business, or continue our operations may be impaired.

Our operations, financial performance, and earnings are significantly impacted by prevailing interest rates, which are in turn affected by U.S. monetary policies and macroeconomic conditions such as inflation fluctuations, recessions, consumer confidence, and demand. Inflation rates increased significantly during the course of 2022 and remained relatively high compared to historical averages in 2023 and, to a lesser extent, 2024, though inflation rates decreased in the second half of 2024 and in 2025 were lower relative to those experienced in prior recent periods. In response to these high inflation rates, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) increased interest rates eleven times over the course of 2022 and 2023, which negatively impacted the demand for mortgage financing, our loan production volume, and our overall revenues. The Federal Reserve did subsequently decrease interest rates three times during the final four months of 2024,2024 backand an additional three times during the final four months of 2025, but there can be no assurance as to Decemberwhether 2022there levels,will butbe indicated that it only projected twoadditional interest rate reductions in 2025.2026, particularly in light of recent geopolitical events such as the recently escalating attacks between the U.S. and Iran. Our revenues related to continuing operations were $234$394 million in fiscal year 20232024 and $338$497 million in fiscal year 2024.2025. Our revenues specific to the Retirement Solutions segment were $149 million in fiscal year 2023 and $206 million in fiscal year 2024.2024 and $253 million in fiscal year 2025. Inflation rates may remain relatively high for an extended period of time, which may in turn result in a sustained period of higher interest rates. In addition, interest rates and the liquidity of the mortgage-backed securitiesMBS (“MBS,”including which includesthe HMBS) market may be impacted by the Federal Reserve increasing the federal funds rate, tapering MBS purchases, or selling MBS or by other governmental actions such as President Trump’s January 2026 directive to the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to purchase $200 billion in MBS.

As of December 31, 2024,2025, 44% of our reverse mortgage loans (by unpaid principal balance) were secured by properties in the state of California. As a result of this geographic concentration, the size and quality of our loan portfolio, which impacts our ability to collect origination fees, monetize our originated loans, and collect on the loans we hold, are largely dependent on economic conditions in California. Adverse changes in the California economy may be caused by inflation, recession, unemployment, state or local real estate laws and regulations, or other factors beyond our control. Such adverse changes could disproportionately impact the demand for our products and services as compared to other lenders with more geographically diversified operations, impacting the size of our loan portfolio and, accordingly, negatively affecting the results of our operations. Adverse changes in the California economy could also result in decreases in real estate values in California, adversely impacting the value of the properties used as collateral for loans to our borrowers. If the value of such properties decreased, it may in turn make the related loans less attractive to investors and therefore more difficult to monetize. Due to the non-recourse nature of reverse mortgage loans, we may ultimately incur losses on any such reverse mortgage loans that we hold to maturity if the decreased value results in the property being sold for less than the loan balance at maturity, though such risk is mitigated in the case of HECM loans due to our ability to assign HECM loans to HUD or collect proceeds from FHA loss claims. Further, such adverse economic changes may adversely impact the ability of our borrowers to make timely taxpayments in respect of home maintenance costs such as taxes and insurance payments and otherwise comply with the conditions of their loans, which could result in an increase in defaults and in turn faster maturities and increased risk of losses on such loans.

In addition, properties located in California may be more susceptible to certain natural disasters, such as wildfires, earthquakes, and mudslides. For example, in January 2025 a series of wildfires started in the Los Angeles, California metropolitan area and spread quickly, causing damage to and/or destroying a significant number of properties. As of February 28, 2025, based on information from Los Angeles County made available to us by our Subservicer, 72 of the reverse mortgage loans on our balance sheet with a total unpaid principal balance of $71.8 million are collateralized by mortgaged properties with respect to which the related residential dwelling suffered damages from such wildfires resulting in a greater than 50% decrease in the value of the residential dwelling (without taking into account the value of the land related to such mortgaged properties). We require borrowers to have standard hazard insurance policies in place that generally cover damages caused by fires in an amount not less than one hundred percent (100%) of the insurable value of the mortgaged property, but in no event less than the minimum amount necessary to fully compensate for any damage or loss on a replacement cost basis. However, with respect to mortgaged properties in California, if the related insurer determines there is a heightened risk of property damage due to wildfires, such insurer may elect not to renew the related hazard policies or may charge higher premiums. This may result in an increase in lapsed policies or insufficient coverage and an increase in expenses for our Company as servicer, as we generally force-place hazard insurance, with coverage retroactive to the date of last known coverage to avoid a gap in coverage for any time period. We, in conjunction with our Subservicer, actively monitor hazard claims with respect to properties impacted by natural disasters to ensure customer satisfaction and that properties are restored to pre-damage condition, with flexibility to assist with alternative resolution paths. However, no assurance can be given as to whether the Company will be successful in its servicing strategy and minimizing losses in respect of loans impacted by natural disasters. Further, certain natural disasters are not covered by standard hazard insurance, such as earthquakes. Even for properties located in an earthquake prone area, we and other lenders in the market area may not require earthquake insurance as a condition of making a loan. If there is a major earthquake, fire, mudslidemudslide, or other natural disaster, we face the risk that many of our borrowers may experience uninsured property losses and other adverse economic consequences, which could in turn have a material and adverse impact on our business, as further described under “—Our business is subject to the risks of earthquakes, fires, floods, and other natural catastrophic events, which may increase in frequency or severity as a result of global climate change, and to interruption by man-made issues such as strikes, wars, and civil unrest.”

Our business is becoming increasingly reliant on technology investments and the returns on these investments are not always predictable. We are currently making, and will continue to make, significant technology investments to support our service offerings and to implement improvements to our customer-facing and mortgage broker-facing technology and information processes in order to more efficiently operate our business, improve the experience of our customers and mortgage broker partners, and ultimately remain competitive and relevant to our customers and mortgage broker partners. For example, in June 2025 we launched a digital pre-qualification tool for certain products and in the fourth quarter of 2025 we launched “Joy,” our AI-powered customer ambassador telephone chatbot, to provide consumer support over the telephone. We are working to buildexpand aJoy’s digitalcapabilities, channelincluding thatto willenable supplementJoy ourto existingprovide linesconsumer support via the exchange of businessonline instant messages, and leveragehave automatedalso digitalbeen working on SMS engagement tools tofor improvesales efficiencyteams. andAdditionally, thein overall2025 easewe of transacting. We are similarly engagingengaged in efforts to refine the systems used by our mortgage broker partners to improve the efficiency and ease of originations via our TPO channel. These technology initiatives might not provide the anticipated benefits or may provide them on a delayed schedule or at a higher cost. Selecting the wrong technology, failing to adequately support development and implementation, or failing to adequately oversee third-party service providers could result in damage to our competitive position and adversely impact our business, financial condition, and results of operations.

We are incorporating artificial intelligenceAI technologies into our processes. These technologies may present business, compliance, and reputational risks.

Recent technological advances in artificial intelligenceAI and machine-learning technology both present opportunities and pose risks to us. If we fail to keep pace with rapidly evolving technological developments in artificial intelligence,AI, our competitive position and business results may suffer. At the same time, use of artificial intelligenceAI has recently become the source of significant media attention and political debate. The introduction of these technologies, particularly generative artificial intelligence,AI, into new or existing offerings may result in new or expanded risks and liabilities, including due to enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality or security risks, as well as other factors that could adversely affect our business, reputation, and financial results. Some states, such as Colorado, have recently enacted comprehensive laws relating to the deployment and development of certain artificial intelligenceAI systems. Additional states may adopt laws relating to artificial intelligenceAI in the future. The CFPB and HUD have also provided commentary regarding the use of artificial intelligenceAI and may take further actions in relation to the regulation of the use and development of artificial intelligenceAI in the future. We will need to ensure that our use of artificial intelligenceAI is in compliance with applicable regulatory requirements as they develop. See “—Risks Related to Laws and Regulations—We operate in a heavily regulated industry, and our loan origination and servicing activities expose us to risks of noncompliance with an increasing and inconsistent body of complex laws and regulations at the U.S. federal, state, and local levels.” In addition, our personnel could, unbeknownst to us, improperly utilize artificial intelligenceAI and machine learning-technology while carrying out their responsibilities. The use of artificial intelligenceAI can lead to unintended consequences, including generating content that appears correct but is factually inaccurate, misleading or otherwise flawed, or that results in unintended biases and discriminatory outcomes, which could harm our reputation and business and expose us to risks related to inaccuracies or errors in the output of such technologies and the risk that using such technologies could result in leakage of our confidential information.

We useaccount estimates in measuring or determining the fair value offor the majority of our assets and liabilities.liabilities at fair value, which is determined using financial models that are based on market inputs and model assumptions. If ourmarket estimatesinputs proveor tomodel beassumptions incorrect,change, we may be required to write down the value of these assets or write up the value of these liabilities, which could adversely affect our business, financial condition, and results of operations.

WeThe use financial models that utilize, wherever possible, market participant data tofair value inputs of many of our assets and liabilities in our portfolio are not readily observable. To determine the fair value of certain of our assets and liabilities, including warrants, our mortgage loans held for sale, MSR, derivative assets and liabilities, HMBS related obligations, and nonrecourse debt for purposes of financial reporting.reporting, we use financial models that utilize, wherever possible, market participant data. We also use models to estimate the change in value of loans held for investment due to market or model input assumptions as an add back to calculate Adjusted Net Income and Adjusted EBITDA.Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”). These models are complex and use asset-specific collateral data and market inputs for interest and discount rates. In addition, the models are complex because of the high number of variables that drive cash flows in each of the respective assets and related liabilities.

As a result of the foregoing, valuations are inherently uncertain and may fluctuate over short periods of time, especially during periods of elevated market volatility. This is particularly the case with respect to the fair values of the Company’s assets and liabilities that are classified as Level 3 in the fair value hierarchy used by the Company due to the fact that unobservable inputs are significant to their fair value measurement. See Note 5 - Fair Value in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K. Our determination of fair value with respect to these assets and liabilities may differ from the fair value that would have been determined if a readily observable market for these types of assets and liabilities existed. If the assumptions we use in our models prove to be inaccurate, if market conditions change, or if errors are found in our models or weaknesses in our model governance, we may be required to write down the value of suchcertain of our assets or we may be required to write up the value of certain of our assets may decrease,liabilities, which could adversely affect our business, financial condition, and results of operations. The fair value of the assets and liabilities related to our securitizations rely on forward rates of interest. Further, the durations of assets and liabilities may not match, resulting in sensitivities to specific portions of the forward curve for interest rates. If these assumptions prove to be wrong or the market for interest rates changes, we may be required to write down the net value of our assets related to our securitizations.

Our business could suffer if we fail to attract, or retain, highly skilled employees,employees. In addition, our success depends on the continuing efforts of our founder and changes in ourchairman, executive management teamteam, mayand bekey disruptive to our business.personnel.

Our future success will depend on our ability to identify, hire, develop, motivate, and retain highly qualified and skilled personnel for all areas of our organization. Trained and experienced personnel in the mortgage industry are in high demand and may be in short supply, particularly those with training and experience specific to thehome equity-based financial products such as reverse mortgage industry.mortgages. Companies with which we compete may be able to offer more attractive terms of employment. In addition, we invest significant time and expense in training our employees, which increases their value to competitors who may seek to recruit them. We may not be able to attract, develop, and maintain the skilled workforce necessary to operate our businesses, and labor expenses may increase as a result of a shortage in the supply of qualified personnel.

Additionally, the experience of our founder and chairman and members of our executive management team is a valuable asset to us. Our executivekey managementpersonnel team hashave significant experience in the financial services industry and would be difficult to replace. Disruptions in management continuity could result in operational or administrative inefficiencies and added costs, which could adversely impact our business, financial condition, and results of operations, and may make recruiting for future management positions more difficult or costly. We cannot assure you that we will be able to attract and retain key personnel or members of our executive management team, which may impede our ability to implement our current strategy or take advantage of strategic acquisitions or other growth opportunities that may be presented to us, which could materially affect our business, financial condition, and results of operations.

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the applicable listing standards of the NYSE.NYSE and NYSE Texas. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs; make some activities more difficult, time-consuming, and costly; and place significant strain on our personnel, systems, and resources. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls over financial reporting.

In order to develop, maintain, and improve the effectiveness of our disclosure controls and procedures and internal controls over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related and audit-related costs and significant management oversight. Our internal controls, including any new controls that we develop, may become inadequate because of changes in conditions in our business. Weaknesses in our disclosure controls and internal controls over financial reporting may be discovered in the future. Any failure to maintain effective disclosure controls and internal controls over financial reporting could have a material and adverse effect on our business, results of operations, and financial condition; investor confidence in our reported financial information; and could cause a decline in the trading price of our securities. See “—Risks relatedRelated to Ownership of our Class A Common Stock—The Company incurs significant expenses and administrative burdens as a public company, which could have a material adverse effect on our business, financial condition, and results of operationsoperations,” and “—Risks relatedRelated to Ownership of our Class A Common Stock—The Company may not be able to effectively continue to implement and maintain controls and procedures required by the Sarbanes-Oxley Act that are applicable to us.us,” and “—Risks Related to Ownership of our Class A Common Stock—If we experience material weaknesses or deficiencies in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial results, in which case our business may be harmed, investors may lose confidence in the accuracy and completeness of our financial reports, and the price of our securities may decline.”

The success of our acquisitions areis dependent, in part, on our ability to integrate, grow, and scale the newly acquired business into our Company efficiently, which poses substantial challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity.

We collect and store certain personal and financial information from customers, employees, and other third parties. Security breaches or cyber-attacks involving our systems or facilities, or the systems or facilities of our service providers, could expose us to a risk of loss of personally identifiable information of customers, employees, and third parties or other confidential, proprietary, or competitively sensitive information, which could potentially have an adverse impact on our future business with current and potential customers, results of operations, and financial condition. A breach involving personally identifiable information of consumers could in particular be detrimental to the Company’s reputation and subject the Company to regulatory and consumer-facing obligations, which could have a material adverse effect on the Company. We could also be subjected to cyber-attacks, such as ransomware, that could result in slow performance and loss or temporary unavailability of our information systems, adversely affecting our operational efficiency and ultimately our results of operations and financial condition. Other mortgage lenders and servicers and other mortgage industry participants have in the past been the subject of cyber-attacks resulting in data breaches and temporary unavailability of information systems. For example, in November 2025, Situs AMC Holdings Corporation (“SitusAMC”), a third-party vendor, announced that a data breach had occurred, affecting accounting records, legal agreements, and customer records relating to SitusAMC’s clients, including records associated with due diligence activities in the residential mortgage sector. The Company uses certain of SitusAMC’s services and received notice from SitusAMC that it is possible that Company data was involved in the data breach. While SitusAMC subsequently informed the Company that no consumer personally identifiable information or sensitive confidential information attributable to the Company was involved in the data breach, the scope of the data breach and whether any Company data was involved is still being assessed. At this time, the Company has not been informed of, and is not otherwise aware of, any data relating to it or its loans that has been affected by the data breach. Mortgage lenders, servicers, and other mortgage industry participants may continue to be targeted in such attacks in the future. Globally, cyber-attacks are expected to continue accelerating in both frequency and sophistication with increasing use by malicious actors of tools and techniques that could hinder our ability to identify, investigate, and recover from incidents. Such attacks may also increase as a result of retaliation by members of foreign countries in response to actions taken by the U.S. in connection with geopolitical conflicts in many parts of the world, such as the ongoing Ukraine-Russia war and the conflicts in the Middle East.East, including the recently escalating attacks between the U.S. and Iran. Furthermore, our employees operate under a hybrid workforce model and such model may be more vulnerable to security breaches.

We are dependent on the secure, efficient, and uninterrupted operation of our technology infrastructure, including computer systems, related software applications, and data centers, as well as those of certain third parties and affiliates. Our websites and computer/telecommunication networks must accommodate a high volume of traffic and deliver frequently updated information, the accuracy and timeliness of which is critical to our business. Our technology must be able to facilitate a loan application experience that equals or exceeds the experience provided by our competitors. Further, we are working to build a digital channel that will supplement our existing lines of business and leverage automated digital tools to improve efficiency and the overall ease of transacting. We have or may in the future experience service disruptions and failures caused by system or software failure, fire, power loss, telecommunications failures, team member misconduct, human error, computer hackers, computer viruses and disabling devices, malicious or destructive code, denial of service or information, as well as natural disasters, terrorism, war, health pandemics, and other similar events, and our disaster recovery planning may not be sufficient for all situations. This is especially applicable in the response topost the COVID-19 pandemic and the shift we have experienced in having most of our employees work from their homes, as our employees access our secure networks through their home networks. The implementation of technology changes and upgrades to maintain current and integrate new technology systems may also cause service interruptions. Any such disruption could interrupt or delay our ability to provide services to our clients and loan applicants, and could also impair the ability of third parties to provide critical services to us.

Reputational risk is inherent in our business. Negative public opinion can result from our actual or alleged conduct in any number of activities, including marketing, loan origination, loan servicing, debt collection practices, corporate governance, and other activities. Negative public opinion can also result from actions taken by government regulators and community organizations in response to our activities, from adverse actions taken by rating agencies, from adverse reports published by analysts, from consumer complaints, including in the CFPB complaints database, from litigation filed against us, and from media coverage, whether accurate or not.not, and from action or inaction on the part of third parties with whom we partner or otherwise do business. See “—Risks Related to Laws and Regulations—We are subject to legal proceedings, federal or state governmental examinations, and enforcement investigations from time to time. Some of these matters are highly complex and slow to develop, and results are difficult to predict or estimate.” The reverse mortgage origination business as a whole had reputational issues arise after 2007, when home values were decreasing nationwide, and the only products available to consumers were HECM loan products. Prior to 2015, HECM loan products were not underwritten to confirm the ability of borrowers to pay taxes and insurance; while the proceeds provided initial cash benefits to the borrowers, if they ultimately were unable or unwilling to pay property taxes and insurance, foreclosures for default would result, and eventually the reverse mortgage borrowers would be evicted. In addition, for various reasons, borrowers would sometimes not have their spouses as co-borrowers on the reverse mortgage loan, with the result that when the borrower died, the non-borrowing spouse would be facing a due and payable balance, which they often were not able to refinance. Because absent an event of default, reverse mortgage loans only become due and payable upon the death of the borrower, and the estate or heirs may not be engaged in the post-termination resolution of the reverse mortgage, reverse mortgages end with foreclosure more often than traditional mortgages. Those public filings are aggregated and come under scrutiny by agenda-driven groups who may not understand that the borrower is not being evicted and simply believe they have spotted a pattern of foreclosure for this type of loan. These issues led to adverse publicity in the reverse mortgage industry.

The issuance of specific regulations and guidance requiring that borrowers be clearly informed regarding their obligations to pay taxes and insurance during the application process and the requirement of “financial assessment” by HUD starting in 2015 have greatly decreased the risks of default due to failure to pay taxes and insurance. HUD also provided clear guidance regarding both underwriting and servicing of loans involving non-borrower spouses, significantly decreasing the risks of those situations. Borrower counseling by a HUD-approved counseling agency is required on HECM.HECM loans. FAR also requires pre-application counseling by a HUD-approved counseling agency for its non-agency reverse mortgages, and also underwrites these loans for the borrower’s willingness and ability to pay property taxes and hazard insurance premiums. For its non-agency second lien product, FAR also reviews the borrower’s payment history with respect to the first lien mortgage loan on the related mortgaged property as part of its underwriting process. For its non-agency reverse mortgages, FAR has more latitude to employ a variety of loss mitigation solutions to avoid foreclosure when the borrower is still living in the home.home and to address circumstances where the borrower has passed away while the non-borrowing spouse continues to live in the home (though unlike the HECM program FAR does not provide for a lifetime lease to non-borrowing spouses in connection with its non-agency reverse mortgage loans). Nevertheless, there may be situations where foreclosure is the only resolution to the loan. Further, with respect to the non-agency second lien reverse mortgage product, FAR may be limited in being able to offer loss mitigation solutions if the borrower has defaulted under their first lien mortgage loan, as the first lien mortgage loan lender typically manages the resolution and foreclosure process in such circumstances. Foreclosures where the reverse mortgage borrower or their non-borrowing spouse is still living in the home—or even when thethey borrower isare no longer occupying the home—may lead to increased reputational risk. Negative publicity due to actions by other reverse mortgage lenders could cause regulatory focus on our business as well. In addition, the CFPB has historically closely scrutinized reverse mortgage marketing practices, publishing a 2015 study on this topic and entering into a number of public consent orders with reverse mortgage lenders over their marketing practices. See “—Risks Related to Laws and Regulations—AAG/Bloom was subject to two separate enforcement matters with the CFPB and the Company agreed to comply with the terms of the related Orders in connection with its acquisition of operational assets from AAG/Bloom. Failure to comply with such Orders would have a detrimental impact on our business, reputation, and financial condition.”

Large-scale natural or man-made disasters, such as the recent wildfires in southern California,disasters may lead to further reputational risk in the servicing area. Mortgaged properties are generally required to be covered by hazard insurance in an amount sufficient to cover repairs to or replacement of the residence. However, when a large scale disaster occurs, the demand for inspectors, appraisers, contractors, and building supplies may exceed availability, insurers and mortgage servicers may be overwhelmed with inquiries, mail service and other communications channels may be disrupted, borrowers may suffer loss of employment and unexpected expenses which cause them to default on payments and/or rendersrender them unable to pay deductibles required under the insurance policies, and widespread casualties may also affect the ability of borrowers or others who are needed to effect the process of repair or reconstruction or to execute documents. Loan originations may also be disrupted, as lenders are required to reinspect properties that may have been affected by the disaster prior to funding. In these situations, borrowers and others in the community may believe that servicers and originators are penalizing them for being the victims of the initial disaster and making it harder for them to recover, potentially causing reputational damage to us. Further, if there are significant defaults in the mortgage portfolio that we service as a result of natural or man-made disasters, there are likely to be increased numbers of loans upon which we will be required to foreclose. Larger numbers of foreclosures will increase reputational risk in the mortgage area.

In addition, our ability to attract and retain clients is highly dependent upon the external perceptions of our level of service, trustworthiness, business practices, financial condition.condition, and other subjective qualities. Negative perceptions or publicity regarding these matters—even if related to seemingly isolated incidents, or even if related to practices not specific to the origination or servicing of loans, such as debt collection—could erode trust and confidence and damage our reputation among existing and potential clients. In turn, this could decrease the demand for our products, increase regulatory scrutiny, and detrimentally effectaffect our business, financial condition, and results of operations.

Further, natural catastrophic events, such as the recent wildfires in southern California,events could result in damage to the properties of our borrowers collateralizing our loans. While the geographic distribution of our borrowers somewhat limits our physical climate risk, the impact of such events would be exacerbated if such events were to occur in areas where a significant number of our borrowers are located. See “—Our geographic concentration could materially and adversely affect us if the economic conditions in our current markets should decline or if our current markets are impacted by natural disasters.” Mortgaged properties securing the loans that we originate are required to be covered by hazard insurance customary to the area in which the property is located, however, there could be circumstances where insurance premiums have not been timely paid or the insurance coverage otherwise fails or is insufficient (for example, the National Flood Insurance Program has a cap of $250,000). Further, in certain areas, such as California, earthquake insurance is not required by HUD or other lenders generally. Additionally, as the risk and severity of weather-related natural disasters potentially increases due to climate change, it may become more difficult for borrowers to obtain affordable insurance. If a property relating to a loan held by us were to incur uninsured damage, it may be difficult to effectively monetize such loan via a sale or securitization. Due to the non-recourse nature of reverse mortgage loans, we may ultimately incur losses on thea reverse mortgage loan if the damage results in the property being sold for less than the loan balance at loan maturity. In the case of a HECM,HECM loan, we may also incur losses when a loan matures prior to the completion of repairs following a natural disaster, because we are required to reduce our claim to the FHA by the unrepaired damage amount. If properties relating to loans we have already sold or securitized were damaged, we would be exposed to such losses generally only if we had breached a representation or warranty under the related purchase and sale agreement. However, in cases where we have retained some credit risk, we could suffer losses. In addition, natural catastrophic events often lead to increased delinquencies and increased servicing advances, which create additional risk for us. Natural catastrophic events may also result in longer timelines to liquidate loans at maturity or to assign HECM loans to HUD.

In addition, strikes, war, and other geopolitical unrest as well as health pandemics and epidemics, such as the COVID-19 pandemic, could cause disruptions in our business and lead to interruptions, delays, or loss of critical data. We may not have sufficient protection or recovery plans in certain circumstances, and our business interruption insurance may be insufficient to compensate us for losses that may occur. These types of catastrophic events may also affect loans pending origination that have been rate-locked and loans that we are holding for sale or investment. For example, our gains in connection with securitizations and loans sales, the cost of capital to our Company, and the value of our assets may be adversely affected due to economic or industry sector downturns, geopolitical tensions arising out of wars such as Russia’s ongoing war with Ukraine or the ongoing conflicts in the Middle East,East (including the recently escalating attacks between the U.S. and Iran), and any prolonged occurrence of infectious disease or other adverse public health developments. Restrictions and regulations that result from conflicts and public health events may be complex and frequently changing, and they may impose additional legal compliance costs or business risks associated with our operations. Any escalation in such conflicts or events could lead to disruption, instability, and volatility in global markets and industries that could negatively impact our business, results of operations, and financial condition.

The following discussion of our financial condition and results of operations should be read together with our consolidated financial statements and related notes. This discussion and analysis contains forward-looking statements that involve risk, uncertainties, and assumptions. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of many factors. Also, see “Cautionary Note Regarding Forward-Looking Statements and Risk Factory Summary” in Part I of this Form 10-K. Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” “FOA,” or the “Company” refer to Finance of America Companies Inc. and its consolidated subsidiaries. References to “FOA Equity” are to Finance of America Equity Capital LLC, a Delaware limited liability company, that the Company controls in an “UP-C” structure.

FOA was incorporated in Delaware on October 9, 2020 and became a publicly-traded company on the NYSE in April 2021, with trading beginning on April 5, 2021 under the ticker symbol “FOA.” FOA has a controlling financial interest in FOA Equity. FOA Equity owns all of the outstanding equity interests in FOAF. FOAF wholly owns FAH and Incenter. FAH is the parent of a lending company, FAR, while Incenter is the parent of operating service companies that provide capital markets and portfolio management capabilities.

•We are focused on growing our core retirement solutions business,business whichin benefitsorder fromto demographiccapitalize andon economicthe tailwinds.U.S. home equity-based lending market opportunity. We believe we can continue to enhance, expand, and more effectively dispatch our innovative suite of home equity-based financing solutions to help senior homeowners achieve their retirement goals.

•We connect borrowers with investors. Our consumer-facing business leaders interface directly with the investor-facing professionals in our Portfolio Management segment, facilitating the development of attractive lending solutions for our customers with the confidence that the loans we generate can be efficiently and profitably soldmonetized through sale or securitization to a deep pool of investors, either directly via whole-loan sales or indirectly via the issuance and sale of mortgage-backed securities. We seek to programmatically and profitably monetize our loans, which minimizes capital at risk, whilewith the Company often retaining a future performance-based participation interest in the underlying cash flows of our monetized loans.

Through FAR, the Company originates, acquires, and services (in partnership with third-party subservicers) HECM,HECM loans, which are originated pursuant to the FHA HECM program and are insured by the FHA, and non-agency reverse mortgage loans, which are not insured by the FHA. We have launched several non-agency reverse mortgage loan products to serve the U.S. senior populationpopulation. At the same time, we continuously look to develop and havelaunch plans for additional innovativenew products to satisfy this vast and largely underserved market. For example, inwe 2023, wepreviously launched a non-agency second lien reverse mortgage loan product, second in priority behind the first lien of an existing traditional forward mortgage loan or home equity line of credit collateralized by the same mortgaged property. In 2024, we invested more capital and resources into the second lien product, including marketing and digital efforts, in order to expand its reach through a leading broker facing platform and expansion of the product to additional states. The launch and expansion of theThis second lien product has enabled us to serve borrowers who already have and desire to maintain a low-rate primary mortgage but want the convenience of a flexible second lien loan with no required monthly principal and interest payments,payments. exemplifyingWe anticipate pursuing partnerships with mortgage servicers in the future to make our second lien reverse mortgage loan product available to their eligible traditional mortgage customers with a streamlined approval process, which we expect to broaden the reach of, and raise originations volumes for, the second lien product. Additionally, in October 2025 we announced that we will begin to originate certain traditional home equity loan products. This marks the first time that we will originate traditional home equity loans and enables us to serve potential borrowers who need higher loan-to-value solutions than those provided by our suite of reverse mortgage loan products. Further, in December 2025, we announced a strategic partnership with funds managed by Blue Owl, which includes a joint innovation and product-development initiative focused on the continuous rollout of new, differentiated financial products tailored for people looking to maximize freedom, security, and opportunity throughout their retirement. These efforts exemplify our commitment to meet and serve new kinds of borrowers whose needs are not satisfied by existing available products.borrowers. We are a leader in this market and we are focused on developing and offering products for borrowers with interest in using ahome reverseequity-based mortgagefinancing loansolutions as a retirement planning tool,tools, which we believe will continue to increase our addressable customer base and ultimately raise our origination volumes.

Our Portfolio Management segment provides structuring and product development expertise as well as broker/dealer and institutional asset management capabilities, which facilitates innovation and the successful monetization of our loans. We securitize HECM loans into HMBS, which Ginnie Mae guarantees, and sell the HMBS in the secondary market while retaining the rights to service the HECM.HECM loans. When HECM loans are not eligible for securitization into HMBS or are required to be bought out of a pool of HECM loans previously securitized into an HMBS, we convey the HECM loans to HUD or liquidate them in accordance with program requirements, securitize them into privately placed mortgage-backed securitiesMBS, or hold them for investment. In November 2024, Ginnie Mae announced the finalized term sheet for its HMBS 2.0 programprogram. expected to be implemented in 2025. OnceIf implemented, the HMBS 2.0 program will enable us to securitize into HMBS additional HECM loans that are required to be bought out of pools of HECM loans securitized pursuant to Ginnie Mae’s existing HMBS program or otherwise not eligible for securitization pursuant to Ginnie Mae’s existing HMBS program (subject to expanded eligibility parameters applicable to the HMBS 2.0 program), increasing the HECM loans that we are able to securitize into HMBS. We botheither securitize non-agency reverse mortgage loans into mortgage-backed securitiesMBS sold to investors andor sell them as whole loans to investors.investors, while retaining the right to service the loans. We may also decide to strategically hold certain non-agency reverse mortgage loans for investment. We expect to sell traditional home equity loans as whole loans to investors on a servicing released basis. The capabilities provided by the Portfolio Management segment allowed us to complete several issuancessales and salesissuances of mortgage-backed securitiesMBS backed by our loan products in 2024,2025, including oura firstnearly issuance$2 andbillion salesecuritization of mortgage-backed securities backed exclusively by our non-agency second lien reverse mortgage loanloans product,in demonstratingSeptember 2025, the largest in Company history. This demonstrates the high quality and liquidity of the loan products we originate, the deep relationships we have with our investors, and the resilience of our business model in many economic environments.

OurRepurchase SegmentsAgreement

•prevailing interest rates which impact loan origination volume, with declining interest rates generally leading to increases in volume, and an increasing interest rate environment generally leading to decreases in volume;

•housing market trends which also impact loan origination volume, with aan strongappreciating housing market typically leading to higher loan origination volume, and a weak housing market with decreasing values typically leading to lower loan origination volume;

•broad economic factors such as the strength and stability of the overall economy, including sustained higher or lower interest rates andrates, inflation, the unemployment level, and real estate values.values, and trade and tax policies.

Other factors that may affect our cost base include trends in salaries and benefits costs, sales commissions, loan production and servicing costs, marketing and advertising, technology, rent, legal, compliance, and other general and administrative costs. Management continually monitors these costs through operating plans.

Due to significant inflationary pressures, theThe U.S. Federal ReserveReserve’s raisedmonetary policies and the federal fundsgovernment’s raterecent duringtariff policies may have an impact on economic conditions relevant to our business, including real estate values and prevailing mortgage rates, however, the first three quartersextent of 2023 and during the sameimpact period,remains reduced its overall purchases and holdings of government and mortgage-related bonds.uncertain. Higher interest rates generally ledlead to lower mortgage transaction volumes, increased competition, and lower profit margins. Volatility in market conditions resulting from the foregoing events have caused andpolicies may continue to cause credit spreads to widen, which reduces, among other things, availability of credit to our Company on favorable terms, liquidity in the market, the fair value of the assets on our balance sheet, and price transparency of real estate relatedestate-related or asset-backed assets. More recently, based on weakening inflation pressures, the U.S. Federal Reserve decreased the federal funds rate by 50 basis points in September 2024, 25 basis points in November 2024, and 25 basis points in December 2024, back to December 2022 levels, but indicated that it only projected two interest rate reductions in 2025.

Our Company is actively monitoring these events and their effects on the Company’s financial condition, liquidity, operations, industry, and workforce. These continuing economic impacts may cause additional volatility in the financial markets and may have an adverse effect on the Company’s results of future operations, financial position, intangible assets,condition, and liquidity in 20252026 and beyond. See the Results of Operations.Operations section below.

For further discussion on the potential impacts of the Federal Reserve’s monetary policies,policies and macroeconomic conditions, see “Risks Related to the Business of the Company” and “Our business is significantly impacted by changes in interest rates. Changes in prevailing interest rates due to U.S. monetary policies or other macroeconomic conditions that affect interest rates may have a detrimental effect on our operations, financial performance, and earningsearnings,” as well as “Risks Related to Our Lending Business” and “Our loan origination and servicing revenues are highly dependent on macroeconomic and U.S. residential real estate market conditions” under the section entitled “Item 1A. Risk Factors,Factors.” as suchSuch risk factors may be amended or updated in our subsequent periodic reports filed with the SEC.

We earn interest income on allour loansmortgage held for investment, subject to HMBS related obligations, loans held for investment, subject to nonrecourse debt, and other loans held for investment.loans. Refer to Note 2117 - Interest Income and Interest Expense in the Notes to Consolidated Financial Statements for additional information.

We incur interest expense on our HMBS related obligations, nonrecourse debt, and our financing lines of credit. Interest expense also includes gains or losses on extinguishment of debt related to the purchase of securities that were previously issued by consolidated trusts. Refer to Note 2117 - Interest Income and Interest Expense in the Notes to Consolidated Financial Statements for additional information.

Net origination gains isare the difference between the cost basis of newly originated or acquired loans and their initial estimated fair value recognized at the time of origination.

GainGains on securitization of HECM tails, net

GainGains on securitization of HECM tails, net, isare the fair value gaingains we recognize based onfrom tail securitizations, net of Ginnie Mae guarantee fees.

Fair value changes from market inputs or model assumptions represent other changes to the fair value of portfolio-related assets and liabilities that are not related to new originations, portfolio runoff, or realization of modeled income and expenses. These changes are driven primarily by updates to market inputs or changes in model changes.assumptions. Refer to Note 65 - Fair Value in the Notes to Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques utilized to measure fair value.

We earn variousorigination fees from our customers duringfor theprocessing processmortgage ofloan origination and servicing of loans.applications. Revenue is recognized whenupon the performancesuccessful obligations have been satisfied, which is typically at the time of loan origination or over the lifefunding of the loans serviced.loan.

Non-funding interest expense,income (expense), net

Non-funding interest expense,income (expense), net, includes our non-portfolio interest income andincome, the interest expense associated with the Company’s non-funding debt.debt, and a gain on the exchange of our senior notes. Refer to Note 2117 - Interest Income and Interest Expense in the Notes to Consolidated Financial Statements for additional information.

Salaries, benefits, and related expenses include commissions,salaries, bonuses, equity-based compensation, salaries, benefits, taxes,commissions, and allother payroll related expenses for our employees.expenses.

Loan production and portfolio related expenses include loan origination costs, fees related to loan funding,costs and portfolio expenses associated with our securitizations.

Marketing and advertising expenses are relatedrelate to our brand marketingmarketing, digital innovation strategy, and providing loan product information provided to our customers.

DepreciationAmortization and amortization expensesdepreciation include depreciation and amortization of fixeddefinite-lived intangible assets and definite-liveddepreciation intangibleof fixed assets.

General and administrative expenses include communications and data processing costs, professional and consulting fees, occupancy, equipment rentals, other office related expenses, and other expenses. Refer to Note 2218 - General and Administrative Expenses in the Notes to Consolidated Financial Statements for additional information.

FOA was incorporated in Delaware on October 9, 2020 and became a publicly-traded company on the New York Stock Exchange (the “NYSE”) in April 2021, with trading beginning on April 5, 2021. On August 15, 2025, FOA’s Class A Common Stock (the “Class A Common Stock”) also began trading on NYSE Texas, Inc. FOA continues to maintain its primary listing on the NYSE and trades under the same “FOA” ticker symbol on both exchanges.

Through FAR, the Company originates, acquires, and services (in partnership with third-party subservicers) home equity conversion mortgage (“HECM”) loans, which are originated pursuant to the Federal Housing Administration (the “FHA”) HECM program and are insured by the FHA, and non-agency reverse mortgage loans, which are not insured by the FHA. We have launched several non-agency reverse mortgage loan products to serve the U.S. senior population. At the same time, we continuously look to develop and launch new products to satisfy this vast and largely underserved market. For example, we previously launched a non-agency second lien reverse mortgage loan product, second in priority behind the first lien of an existing traditional mortgage loan or home equity line of credit collateralized by the same mortgaged property. This second lien product has enabled us to serve borrowers who already have and desire to maintain a low-rate primary mortgage but want the convenience of a flexible second lien loan with no required monthly principal and interest payments. In April 2026, FOA rolled out a new second lien reverse mortgage line of credit, which is a non-revolving, multi-draw product that allows borrowers to tap their equity at the times and in the amounts that precisely suit their needs. We anticipateare also pursuing partnerships with mortgage servicers in the future to make our second lien reverse mortgage loan products available to their eligible traditional mortgage customers with a streamlined approval process, which we expect to broaden the reach of, and raise originations volumes for, the second lien product. Additionally, in 2026, we commenced originating certain traditional home equity loan products. This marks the first time that we have originated traditional home equity loans and enables us to serve potential borrowers who need higher loan-to-value solutions than those provided by our suite of reverse mortgage loan products. Further, in December 2025, we announced a strategic partnership with funds managed by Blue Owl Capital, Inc., which includes a joint innovation and product-development initiative focused on the continuous rollout of new, differentiated financial products tailored for people looking to maximize freedom, security, and opportunity throughout their retirement. These efforts exemplify our commitment to meet and serve new kinds of borrowers. We are a leader in this market and we are focused on developing and offering products for borrowers with interest in using home equity-based financing solutions as retirement planning tools, which we believe will continue to increase our addressable customer base and ultimately raise our origination volumes.

We originate reverse mortgage loans through a retail channel (consisting primarily of a centralized retail platform) and a third-party originator (“TPO”) channel (consisting primarily of a network of mortgage brokers). In 2026, we have also begun originating traditional home equity loans initially through an artificial intelligence (“AI”) platform provided by the Better Home & Finance Holding Company (“Better”). In 2025 and 2026, we have continued to take steps to enhance our marketing and digital capabilities. In the first quarter of 2025, we completed the migration of our telephony platform, and we have continued to enhance its performance. In the second quarter of 2025, we launched and transitioned to our new brand platform, “A Better Way with FOA,” alongside the launch of a national advertising campaign, which integrates a mix of traditional and online mediums. This represents a shift in marketing strategy designed to enhance brand visibility and connect with a new generation of customers through modernized messaging that reflects the real-life goals and aspirations of today’s senior homeowners. We have also continued to enhance our digital capabilities by leveraging automated digital tools to improve efficiency and the overall ease of transacting. In June 2025, we launched a digital pre-qualification tool for certain products that can deliver a three-minute pre-qualification experience, setting a new benchmark for speed and customer engagement in the industry. In the fourth quarter of 2025, we launched “Joy,” our AI-powered customer ambassador chatbot, to provide consumer support over the telephone. In 2026, we have expanded Joy’s capabilities, including enabling Joy to provide consumer support via the exchange of online instant messages, and separately have implemented SMS engagement tools for sales teams. These efforts have culminated in the launch of Helix, our proprietary, industry first end-to-end platform that connects how we acquire, evaluate, and move customers through the loan origination process, with Joy operating as the AI layer across that system. Additionally, in 2025, we engaged in efforts to refine the systems used by our mortgage broker partners to improve the efficiency and ease of originations via our TPO channel. We believe that these efforts have and will (i) increase brand and product recognition among customers and mortgage brokers, (ii) improve overall customer experience, and (iii) ultimately raise our origination volumes.

We are engaging in strategic partnerships in an effort to expand the reach of our products. In October 2025 we announced a strategic partnership with Better, pursuant to which we have begun to originate traditional home equity loans through Better’s AI platform and serve as Better’s reverse mortgage origination partner, including both HECM loans and non-agency reverse mortgage loans. Better willis initially leverageleveraging traditional platforms to offer these products; however our goal for this collaboration is to allow us to integrate our reverse mortgage products into a unified digital experience. Additionally, infollowing Novemberthe 2025closing of the OMC Transaction described below, we announcedare thatengaging FARwith and PHHOnity Mortgage Corporation (nowformerly known as OnityPHH Mortgage Corporation) (“OMC”), a subsidiary of Onity Group Inc., entered into an agreement, which was amended in April 2026, pursuant to whichmake FARour willnon-agency acquiresecond a portion of OMC’s HECM loan servicing portfolio and certain otherlien reverse mortgage assets.loan Inproduct connectionavailable to OMC’s eligible traditional mortgage customers with thea transaction,streamlined FARapproval willprocess. We are also acquirepursuing OMC’spartnerships pipelinewith ofadditional mortgage servicers to make our non-agency second lien reverse mortgage loans,loan bringproduct selectavailable membersto their eligible traditional mortgage customers with a streamlined approval process. We believe that these efforts will significantly broaden the reach of OMC’sour experiencedproducts and ultimately raise our origination team onto FAR’s platform, and enter into a subservicing arrangement with OMC. Refer to Note 16 - Subsequent Events in the Notes to Condensed Consolidated Financial Statements for additional information.volumes.

Our Portfolio Management segment provides structuring and product development expertise as well as broker/dealer and institutional asset management capabilities, which facilitates innovation and the successful monetization of our loans. We securitize HECM loans into Home Equity Conversion Mortgage-Backed Securities (“HMBS”), which the Government National Mortgage Association (“Ginnie Mae”) guarantees, and sell HMBS in the secondary market while retaining the rights to service the HECM loans. When HECM loans are not eligible for securitization into HMBS or are required to be bought out of a pool of HECM loans previously securitized into HMBS, we convey the HECM loans to the United States Department of Housing and Urban Development (“HUD”) or liquidate them in accordance with program requirements, securitize them into privately placed mortgage-backed securities (“MBS”), or hold them for investment. In November 2024, Ginnie Mae announced the finalized term sheet for its HMBS 2.0 program. If implemented, the HMBS 2.0 program will enable us to securitize into HMBS additional HECM loans that are required to be bought out of pools of HECM loans securitized pursuant to Ginnie Mae’s existing HMBS program or otherwise not eligible for securitization pursuant to Ginnie Mae’s existing HMBS program (subject to expanded eligibility parameters applicable to the HMBS 2.0 program), increasing the HECM loans that we are able to securitize into HMBS. We either securitize non-agency reverse mortgage loans into MBS sold to investors or sell them as whole loans to investors, while retaining the right to service the loans. We may also decide to strategically hold certain non-agency reverse mortgage loans for investment. We sell traditional home equity loans as whole loans to investors on a servicing released basis. The capabilities provided by the Portfolio Management segment allowed us to complete several sales and issuances of MBS backed by our loan products in 2025 and the first quarterhalf of 2026, including a nearly $2 billion securitization of non-agency reverse mortgage loans in September 2025, the largest in Company history. This demonstrates the high quality and liquidity of the loan products we originate, the deep relationships we have with our investors, and the resilience of our business model in many economic environments.

Net income (loss) from continuing operations before income taxes decreased $45.4$153.0 million primarily as a result of the following:

•Fair value changes from market inputs or model assumptions decreased $68.3$126.5 million primarily due to net changes in interest rates, yields, home price appreciation, and other inputs, which generated lower net fair value gainslosses during the three months ended MarchJune 31,30, 2026 compared to net fair value gains during the 2025 period. Refer to Note 5 - Fair Value in the Notes to Condensed Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques impacting the value of our loans and related obligations.

•Net origination gains increased $14.8$10.5 million as a result of higher reverse mortgage loan origination volumes and higher margins.volumes. We recognized $60.9 million in net origination gains on reverse mortgage loan originations of $596.1 million for the three months ended March 31, 2026 compared to $46.0$66.6 million in net origination gains on loan originations of $560.7$730.0 million for the three months ended June 30, 2026 compared to $56.1 million in net origination gains on loan originations of $602.3 million for the comparable 2025 period.

•Non-funding interest expense, net, decreased $2.2$2.9 million during the three months ended MarchJune 31,30, 2026 compared to the 2025 period primarily due to lower outstanding balances on our working capital promissory notes and senior notesnotes, andas well as a lower interest rate on our remaining promissory note, partially offset by interest expense related to the Amended and Restated Repurchase Agreement during the three months ended March 31, 2026 compared to the 2025 period.note.

•Total expenses increased $19.0$17.0 million primarily due to increases in salaries, benefits, and related expenses as a result of higher compensation resulting from increased loan production, asan wellincrease asin increasedmarketing headcountand advertising expenses related to support the Company’sour investment in ourmarketing technologyfor initiatives,future volume growth, and an increase in loan portfolio related expenses as a result of higher securitization expenses and increased loan production,production. andWe anissued increase$1.2 inbillion marketingof andnotes advertisingduring expensesthe relatedthree months ended June 30, 2026 compared to our$0.9 investment in marketingbillion for futurethe volume2025 growth.period.

•Other, net, increaseddecreased $19.1$21.1 million primarily due to a $16.9$24.3 million gainloss on convertible notes resulting from changesthe increase in FOA’s stock price,price from $16.60 to $27.52 during the three months ended June 30, 2026, as well as valuation changes in certain non-operating assets and deferred purchase price liabilities.

Revenues and fees are directly attributed to their respective segments at the time services are performed. Revenues generated on inter-segment services performed are valued based on estimated market value. Expenses directly attributable to the operating segments are expensed as incurred. Other expenses are allocated to individual segments based on the estimated value of services performed, total revenue contributions, personnel headcount, or the equity invested in each segment based on the type of expense allocated. The allocation methodology is reviewed annually. There were no changes to methodology during the three and six months ended MarchJune 31,30, 2026 and 2025. Expenses for enterprise-level general overhead, such as executive administration, are not allocated to the business segments.

•Net origination gains increased $14.8$10.5 million or 32.3%18.8% as a result of higher reverse mortgage loan origination volumes and higher margins.volumes. We originated $596.1$730.0 million of reverse mortgage loans for the three months ended MarchJune 31,30, 2026, an increase of 6.3%,21.2%, compared to $560.7$602.3 million for the comparable 2025 period. During the three months ended March 31, 2026, the weighted average margin on reverse mortgage loan production was 10.2% compared to 8.2% in the 2025 period, an increase of 2.0%.

•Fair value changes from market inputs or model assumptions decreased $68.3$126.5 million primarily due to net changes in interest rates, yields, home price appreciation, and other inputs, which generated lower net fair value gainslosses during the three months ended MarchJune 31,30, 2026 compared to net fair value gains during the 2025 period. Refer to Note 5 - Fair Value in the Notes to Condensed Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques impacting the value of our loans and related obligations.

•Net portfolio interest income decreased $4.2$8.7 million due to a higher cost of funds within our securitized financing portfolio, which was partially offset by increased gains on extinguishment of debt related to the purchases of securities that were previously issued by consolidated trusts. Fair value changes from model amortization improved $8.9$8.2 million primarily due to higher accreted yield on the Company’s residual interests during the threesix months ended MarchJune 31,30, 2026 compared to the 2025 period.

•Loan portfolio related expenses increased $5.9$3.9 million due to higher securitization expenses during the three months ended MarchJune 31,30, 2026 compared to the 2025 period. We issued $1.7$1.2 billion of notes during the three months ended MarchJune 31,30, 2026 compared to $877$0.9 millionbillion for the 2025 period.

•Non-funding interest expense, net, decreased $2.2$2.9 million during the three months ended MarchJune 31,30, 2026 compared to the 2025 period primarily due to lower outstanding balances on our working capital promissory notes and senior notesnotes, andas well as a lower interest rate on our remaining promissory note, partially offset by interest expense related to the Amended and Restated Repurchase Agreement during the three months ended March 31, 2026 compared to the 2025 period.note.

Other, net, increaseddecreased $19.1$21.1 million primarily due to a $16.9$24.3 million gainloss on convertible notes resulting from changesthe increase in FOA’s stock price,price from $16.60 to $27.52 during the three months ended June 30, 2026, as well as valuation changes in certain non-operating assets and deferred purchase price liabilities.

These non-GAAP financial measures should not be considered as an alternative to net income,income (loss), operating cash flows, or any other performance measures determined in accordance with U.S. GAAP. Adjusted net income, adjusted EBITDA, adjusted earnings per share, tangible equity, and tangible equity per share have important limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of the limitations of these metrics are: (i) cash expenditures for future contractual commitments; (ii) cash requirements for working capital needs; (iii) cash requirements for certain tax payments; and (iv) all non-cash income/expense items.

We define adjusted net income as net income (loss) from continuing operations adjusted for:

We define adjusted EBITDA as net income (loss) from continuing operations adjusted for:

We define adjusted earnings per share as adjusted net income (defined above) plus interest expense on the exchangeable senior secured notes (the “Exchangeable Secured Notes”), net of a tax effect, if dilutive for adjusted earnings per share, divided by the weighted average shares outstanding, which includes outstanding Class A Common Stock plus the Class A LLC units of FOA Equity (“Class A LLC Units”) owned by the noncontrolling interest on an if-converted basis, the exchange of the Exchangeable Secured Notes on an if-converted basis if they are dilutive for adjusted earnings per share, the conversion of the Convertible Notes on an if-converted basis, the conversion of the preferredPreferred stockStock on an if-converted basis, and any shares under the treasury stock method.

The following table presents a reconciliation of net income (loss) from continuing operations to adjusted net income and adjusted EBITDA, as well as adjusted earnings per share, tangible equity, and tangible equity per share (in thousands, except for share data):

Our cash and cash equivalents and restricted cash increased by $52.0$15.8 million for the threesix months ended MarchJune 31,30, 2026 compared to a decrease of $50.1$65.3 million during the comparable period in 2025. Our cash and cash equivalents, excluding restricted cash, increaseddecreased $18.2$4.2 million for the threesix months ended MarchJune 31,30, 2026 compared to ana increasedecrease of $4.6$0.9 million during the comparable period in 2025.

Cash flows from operating activities decreased by $38.8$125.6 million for the threesix months ended MarchJune 31,30, 2026 compared to the corresponding 2025 period, which was primarily attributable to an increase in cash used for originations of loans held for sale, net of proceeds on sale.

The increasedecrease of $49.6$133.2 million in cash flows from our investing activities during the threesix months ended MarchJune 31,30, 2026 compared to the 2025 period was primarily attributable to a $55.8$195.8 million decrease in proceeds/payments on loans held for investment, net of cash used for purchases and originations, and a $91.8 million cash outlay for the OMC Transaction. This was partially offset by a $152.6 million increase in proceeds/payments on loans held for investment, subject to nonrecourse debt, net of cash used for purchases and originations. This was partially offset by a $7.2 million decrease in proceeds/payments on loans held for investment, net of cash used for purchases and originations.

The increase of $91.2$339.9 million in cash flows from our financing activities during the threesix months ended MarchJune 31,30, 2026 compared to the 2025 period was primarily driven by a $516.0$564.0 million increase in proceeds onfrom nonrecourse debt, net of payments.payments, and a $110.6 million decrease in payments on HMBS related obligations, net of proceeds. This was partially offset by a $379.0$291.1 million increase in payments on other financing lines of credit, net of proceeds, $41.6 million of cash used for the repurchase of Class A Common Stock and Class A LLC Units, a $2.1 million increase in payments on HMBS related obligations, net of proceeds, and $1.1$2.3 million of cash used for dividends paid on the Preferred Stock.

Our credit facilities contain various financial covenants, which primarily relate to required tangible net worth amounts, liquidity reserves, leverage ratios, and profitability. These covenants are measured at FAH or FAR. The Company was in compliance with the financial covenants as of MarchJune 31,30, 2026. Refer to Note 89 - Other Financing Lines of Credit in the Notes to Condensed Consolidated Financial Statements for additional information.

As of MarchJune 31,30, 2026, FAR was in compliance with the minimum net worth, liquidity, capitalization levels, and insurance requirements of Ginnie Mae. FAR’s actual ratio of adjusted net worth to total assets was below the Ginnie Mae requirement due to the Company’s determination that HECM loans transferred into HMBS as well as its HECM buyout and non-agency reverse mortgage loan securitizations do not meet the requirements of sale accounting and are not derecognized upon date of transfer. As a result, the Company accounts for HECM loans transferred into HMBS as well as its HECM buyout and non-agency reverse mortgage loan securitizations as secured borrowings and continues to recognize the loans as held for investment, subject to HMBS related obligations or nonrecourse debt, along with the corresponding liability for the HMBS related obligations or nonrecourse debt. Based on this, FAR requested and received a waiver for the minimum outstanding capital requirements from Ginnie Mae. Therefore, FAR 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 MarchJune 31,30, 2026, FAR was in compliance with applicable requirements.

The following description is a summary of certain material provisions of our outstanding indebtedness. As of MarchJune 31,30, 2026, our total debt obligations were $30.8$36.8 billion. This summary does not restate the terms of our outstanding indebtedness in its entirety, nor does it describe all of the material terms of our indebtedness.

As of MarchJune 31,30, 2026, we had HMBS related obligations of $19.1$24.7 billion and HECM loans pledged as collateral to the pools of $19.3$25.0 billion, both recorded at fair value.