Financial Corporation of America (FOA), a leading reverse mortgage lender, has experienced a round of layoffs affecting multiple levels of the organization, including retail and corporate leadership positions. The news was first reported by National Mortgage News.
Last year, FOA catapulted itself into the top spot in the reverse mortgage industry almost overnight after completing an acquisition of the former industry leader American Consulting Group The company also faces financial challenges based on its recent earnings report and looming threats. New York Stock Exchange (New York Stock Exchange), its shares may be delisted.
Company statement
In a statement provided to housing line, FOA President Kristen Sieffert explained the reasoning behind the layoffs.
“American Financial News continuously evaluates all aspects of our business to improve operating performance and execute our long-term growth strategic plan,” Sievert said. “So as we simplify the business, we are optimizing spending and eliminating some positions in the retail and corporate sectors.
“Our core focus is on creating modern retirement living centered around home equity, and we will continue to make decisions that enhance our platform and ability to serve our clients, teammates and investors,” she said.
It was not specified how many employees or which specific departments were affected.
Sieffert added that Paul Fiore, who most recently served as FOA’s chief retail sales officer and joined the company through the AAG acquisition, “has decided to pursue other career opportunities and we wish him the best in the future.”
Sievert added that Fiore’s successor has already been selected.
“At the same time, we are pleased to announce that James Mittleman will lead retail sales. With more than two decades of extensive industry experience, we believe James is the right leader for our company at this important inflection point,” she said.
In a public post on LinkedIn, Fiore expressed gratitude for his time at FOA and AAG.
“It’s never easy to say goodbye. Saying goodbye 15 years later is even harder,” Fiore wrote. “When I look back on my career at AAG/FAR, I am proud of everything we have done as a team. […] I believe in the leadership of our CEO and am excited to take on the challenge of building a business from the ground up.
“To grow from a small brokerage to over 2,000 employees and the most recognized brand in the reverse mortgage industry is an incredible accomplishment, and it’s all thanks to the most incredible group of people I’ve had the privilege to work with. Human hard work and dedication,” he added.
recent history
In a business update issued to the company’s shareholders in April, the company explained that the acquisition of AAG resulted in “aggressive actions to realign its origin and back-office headcount to align with ongoing operations.” Following the acquisition of AAG, the company reportedly The company’s overall headcount is down about 30% from its peak in the second quarter of 2023.
This leaves FOA with “less than 1,000 employees” by the end of 2023, leaving the organization “well-positioned to evaluate opportunities for further industry consolidation,” the company explained.
The company is also transforming into what it calls a “deleveraging, cash-generating business model,” which it plans to do by “monetizing its existing balance sheet while new businesses generate free cash flow and long-term equity value.”
Prior to this update, the company received two separate notices from the NYSE explaining that its shares could be delisted from the exchange if it did not improve its share price performance. The first notification was issued in December 2023, and the second notification was issued in February.
The New York Stock Exchange requires listed stocks to maintain a price of at least $1 per share “for 30 consecutive trading days,” but the price reached that threshold only seven times in 2024.
Home Equity Conversion Mortgage (HECM) Endorsement Data Reverse Market Insights (RMI), FOA remains the industry’s leading lender, approving 7,784 loans in the 12 months to May 2024.
