v3.26.1
Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2026
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements comprise the financial statements of FOA and its controlled subsidiaries. The condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and pursuant to the accounting and disclosure rules and regulations of the U.S. SEC. The accompanying condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of its financial condition as of March 31, 2026, its results of operations for the three months ended March 31, 2026 and 2025, and its cash flows for the three months ended March 31, 2026 and 2025. The Condensed Consolidated Statement of Financial Condition at December 31, 2025 was derived from audited financial statements but does not contain all of the footnote disclosures from the annual financial statements. Operating results for the interim periods are not necessarily indicative of the results that may be expected for any future period or for the full year. The condensed consolidated financial statements, including the significant accounting policies, should be read in conjunction with the consolidated financial statements and notes as of and for the year ended December 31, 2025 within the Company’s Annual Report on Form 10-K. The significant accounting policies, together with the other Notes to Condensed Consolidated Financial Statements, are an integral part of the condensed consolidated financial statements.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates regarding loans held for investment, HMBS related obligations, and nonrecourse debt are particularly subject to change. Actual results may differ from those estimates and assumptions due to factors such as changes in the economy, interest rates, secondary market pricing, prepayment assumptions, home prices, or discrete events affecting specific borrowers, and such differences could be material.
Recently Adopted Accounting Guidance
StandardDescriptionEffective DateEffect on Consolidated Financial Statements
Accounting Standards Update (“ASU”) 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt InstrumentsIn November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-04, which is intended to clarify the requirements for determining whether to account for certain early settlements of convertible debt instruments as induced conversions or extinguishments.January 1, 2026The adoption of this ASU did not have a material impact on our consolidated financial statements.
ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract AssetsIn July 2025, the FASB issued ASU 2025-05, which is intended to provide a practical expedient to measure credit losses on accounts receivable and contract assets.January 1, 2026The adoption of this ASU did not have a material impact on our consolidated financial statements.
ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use SoftwareIn September 2025, the FASB issued ASU 2025-06, which amends guidance related to accounting for the development costs of internal-use software.January 1, 2026The adoption of this ASU did not have a material impact on our consolidated financial statements.
Recently Issued Accounting Guidance, Not Yet Adopted as of March 31, 2026
StandardDescriptionDate of Planned AdoptionEffect on Consolidated Financial Statements
ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement ExpensesIn November 2024, the FASB issued ASU 2024-03, which is intended to improve disclosures by providing more detailed information about the types of expenses in commonly presented expense captions in the income statement.For the year ending December 31, 2027 and interim periods beginning in 2028.This ASU will result in additional expense disclosures, but the Company does not expect it will have a material impact on our consolidated financial statements.

Adoption of this ASU should be applied on a prospective basis, but retrospective application is permitted.
Business Segment Reporting
12. Business Segment Reporting
The following tables present financial information by segment (in thousands):
For the three months ended March 31, 2026
Retirement Solutions Portfolio ManagementTotal Reportable SegmentsCorporate and OtherTotal
Portfolio interest income
Interest income$— $467,603 $467,603 $— $467,603 
Interest expense— (401,333)(401,333)— (401,333)
Net portfolio interest income— 66,270 66,270 — 66,270 
Other income (expense)
Net origination gains60,887 — 60,887 — 60,887 
Gains on securitization of HECM tails, net— 11,667 11,667 — 11,667 
Fair value changes from model amortization— (32,020)(32,020)— (32,020)
Fair value changes from market inputs or model assumptions— 19,924 19,924 — 19,924 
Net fair value changes on loans and related obligations60,887 (429)60,458 — 60,458 
Fee income5,742 493 6,235 (123)6,112 
Non-funding interest expense, net— — — (12,698)(12,698)
Net other income (expense)66,629 64 66,693 (12,821)53,872 
Total revenues66,629 66,334 132,963 (12,821)120,142 
Expenses
Salaries, benefits, and related expenses25,713 4,298 30,011 12,593 42,604 
Loan production and portfolio related expenses1,934 15,732 17,666 — 17,666 
Loan servicing expenses— 7,446 7,446 — 7,446 
Marketing and advertising expenses13,339 — 13,339 — 13,339 
Amortization and depreciation 9,409 5 9,414 438 9,852 
General and administrative expenses6,321 2,466 8,787 5,672 14,459 
Total expenses56,716 29,947 86,663 18,703 105,366 
Other, net— — — 21,481 21,481 
Net income (loss) before taxes$9,913 $36,387 $46,300 $(10,043)$36,257 
For the three months ended March 31, 2025
Retirement Solutions Portfolio ManagementTotal Reportable SegmentsCorporate and OtherTotal
Portfolio interest income
Interest income$— $480,602 $480,602 $— $480,602 
Interest expense— (410,167)(410,167)— (410,167)
Net portfolio interest income— 70,435 70,435 — 70,435 
Other income (expense)
Net origination gains46,038 — 46,038 — 46,038 
Gains on securitization of HECM tails, net— 10,481 10,481 — 10,481 
Fair value changes from model amortization— (40,956)(40,956)— (40,956)
Fair value changes from market inputs or model assumptions— 88,263 88,263 — 88,263 
Net fair value changes on loans and related obligations46,038 57,788 103,826 — 103,826 
Fee income5,683 786 6,469 (123)6,346 
Non-funding interest expense, net— — — (14,912)(14,912)
Net other income (expense)51,721 58,574 110,295 (15,035)95,260 
Total revenues51,721 129,009 180,730 (15,035)165,695 
Expenses
Salaries, benefits, and related expenses21,852 3,632 25,484 8,446 33,930 
Loan production and portfolio related expenses1,526 9,804 11,330 — 11,330 
Loan servicing expenses— 7,741 7,741 — 7,741 
Marketing and advertising expenses10,730 — 10,730 1 10,731 
Amortization and depreciation 9,330 18 9,348 310 9,658 
General and administrative expenses5,024 2,536 7,560 5,419 12,979 
Total expenses48,462 23,731 72,193 14,176 86,369 
Other, net— — — 2,367 2,367 
Net income (loss) before taxes$3,259 $105,278 $108,537 $(26,844)$81,693 
The following table presents total assets by segment (in thousands):
March 31, 2026December 31, 2025
Retirement Solutions$170,088 $214,601 
Portfolio Management31,051,691 30,458,518 
Total reportable segments31,221,779 30,673,119 
Corporate and Other106,360 60,179 
Total assets$31,328,139 $30,733,298 
The Company has identified two reportable segments: Retirement Solutions and Portfolio Management. The Chief Operating Decision Maker (“CODM”) are certain officers of the Company, which include the Chief Executive Officer, Chief Financial Officer, and Chief Investment Officer. The CODM evaluates the performance of the Company’s segments based on net income (loss) before taxes. The CODM uses this reported measure along with periodic reviews of results and overall market activity to allocate resources to segments in the planning and forecasting process.
Retirement Solutions
Our Retirement Solutions segment conducts all of our Company’s loan origination activity, including the origination and acquisition of HECM loans and non-agency reverse mortgage loans through both the retail and third-party originator channels. The Retirement Solutions segment generates revenue from fees earned at the time of loan origination as well as from the initial estimate of net origination gains, with all originated loans accounted for at fair value. Once originated, the loans are transferred to our Portfolio Management segment, and any future fair value adjustments, including interest earned, on these originated loans are reflected in the revenues of our Portfolio Management segment until final disposition.
Portfolio Management
Our Portfolio Management segment provides product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services to the Company. Our Portfolio Management team acts as the connector between borrowers and investors. The direct connections to investors, provided primarily by our Financial Industry Regulatory Authority (“FINRA”) registered broker-dealer, allow us to innovate and manage risk through better price and product discovery. Given our scale, we are able to work directly with investors and, where appropriate, retain assets on the balance sheet for attractive return opportunities. These retained investments are a source of growing and recurring interest and other servicing-related income. The Portfolio Management segment primarily generates revenue from the net interest income and fair value changes on portfolio assets, monetized through securitization, sale, or other financing of those assets.
Corporate and Other
Corporate and Other consists of our corporate services groups that support the operations of the Company, as well as certain inter-segment revenues and expenses that are eliminated in the condensed consolidated financial statements.
The Company’s segments are based upon the Company’s organizational structure which focuses primarily on the services offered. Corporate functional expenses are allocated to individual segments based on actual cost of services performed based on a direct resource utilization, estimate of percentage use for shared services, or headcount percentage for certain functions. Non-allocated corporate expenses include administrative costs of executive management and other corporate functions that are not directly attributable to the Company’s reportable segments. Revenues generated on inter-segment services performed are valued based on similar services provided to external parties.