Company: FOACW
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001828937-25-000009
Chunk: 45

Company: Finance of America Companies Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 8
Chunk 45
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96

We have identified the yield spread component of the discount rates used in the valuation of these non-agency reverse mortgage loans and related obligations as a critical audit matter because of (i) the significant judgments made by management in determining the yield spread component of the discount rates and (ii) the high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the appropriateness of the yield spread component of the discount rates, including specialized skill and knowledge needed.

The primary procedures we performed to address this critical audit matter included: 

•Utilizing personnel with specialized skill and knowledge in valuation to assist in assessing the reasonableness of the methodology utilized by management to determine the discount rates, including the basis for the yield spread component of the discount rates.

•Assessing the reasonableness of the yield spread component by (i)  evaluating the relevancy and reliability of the source of the benchmark yield spread information, (ii) agreeing the benchmark yield spread information to the third-party report, (iii) testing the completeness and accuracy of the underlying transactional details, and (iv) validating the arithmetic accuracy of the calculation of the yield spread utilized in the determination of the discount rates.  

•Assessing the reasonableness of the yield spreads by (i) comparing the yield spreads utilized to yield spreads implied by recently observed transactions, (ii) comparing, on a sample basis, the benchmark yield spread information utilized to independent third-party yield spread information, and (iii) by comparing changes in yield spreads for historical transactions to changes in the benchmark yield spread information.

/s/ BDO USA, P.C.

We have served as the Company’s auditor since 2021.

Philadelphia, Pennsylvania

March 14, 2025

97

Finance of America Companies Inc.Consolidated Statements of Financial Condition(in thousands, except share data)

December 31, 2024December 31, 2023ASSETSCash and cash equivalents$47,383 $46,482 Restricted cash254,585 178,319 Loans held for investment, subject to Home Equity Conversion Mortgage-Backed Securities (“HMBS”) related obligations, at fair value18,669,962 17,548,763 Loans held for investment, subject to nonrecourse debt, at fair value9,288,403 8,272,393 Loans held for investment, at fair value520,103 575,228 Intangible assets, net216,342 253,531