Company: FOACW
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001828937-25-000009
Chunk: 239

Company: Finance of America Companies Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 3
Chunk 239
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, loss frequency, loss severity, and discount rate assumptions.Level 3Commercial mortgage loans - securitizedThis product is valued using a DCF model utilizing a single monthly mortality prepayment rate (“SMM”), discount rate, and loss rate assumptions.Level 3(1) The Company aggregates loan portfolios based on the underlying securitization trust and values these loans using these aggregated pools. The range of inputs provided is based on the range of inputs utilized for each securitization trust.

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Finance of America Companies Inc.Notes to Consolidated Financial Statements

Loans held for investmentNon-agency reverse mortgage loansThe Company values non-agency reverse mortgage loans utilizing a present value methodology that discounts estimated projected cash flows over the life of the loan portfolio. The primary assumptions utilized in valuing the loans include WAL, LTV, CPR, loss severity, HPA, and discount rate. Level 3HECM buyouts (nonperforming)The fair value of repurchased loans is based on expected cash proceeds of the liquidation of the underlying properties and expected claim proceeds from HUD. The primary assumptions utilized in valuing nonperforming repurchased loans include WAL, CPR, loss frequency, loss severity, and discount rate. Termination proceeds are adjusted for expected loss frequencies and severities to arrive at net proceeds that will be provided upon final resolution, including assignments to the FHA. Historical experience is utilized to estimate the loss rates resulting from scenarios where FHA insurance proceeds are not expected to cover all principal and interest outstanding and, as servicer, the Company is exposed to losses upon resolution of the loan.Level 3Commercial mortgage loansThis product is valued using a DCF model with SMM, discount rate, and constant default rate (“CDR”) assumptions.Level 3Other assetsRetained bondsManagement obtains third-party valuations to assess the reasonableness of the fair value calculations provided by the internal valuation model. The primary assumptions utilized include WAL and discount rate.Level 3Loans held for sale - residential mortgage loansThis includes all mortgage loans that can be sold to the agencies, which are valued predominantly by published forward agency prices. This will also include all non-agency loans where recently negotiated market prices for the loan pool exist with a counterparty (which approximates fair value), or quoted market prices for similar loans are available.Level 2MSRThe Company valued MSR internally through a DCF analysis and calculated using a pricing model. This pricing model was based on the objective characteristics of the portfolio (loan amount, note rate, etc.) and