Company: FOACW
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001828937-25-000009
Chunk: 167

Company: Finance of America Companies Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 3
Chunk 167
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 combines the use of a discounted cash flow (“DCF”) model and analysis of current market data to arrive at an estimate of fair value. The cash flow assumptions and prepayment and repayment assumptions used in the model are based on various factors, with the key assumptions being prepayment and repayment speeds, credit loss frequencies and severity, and discount rate assumptions. The changes in fair value due to portfolio runoff and realization of modeled income and expenses are recorded in Fair value changes from model amortization in the Consolidated Statements of Operations, and other fair value changes are recorded in Fair value changes from market inputs or model assumptions in the Consolidated Statements of Operations. The interest recognized on these financial instruments is recorded in Interest income or Interest expense in the Consolidated Statements of Operations. 

The following table provides an analysis of all components of net portfolio interest income (in thousands):

For the year ended December 31, 2024For the year ended December 31, 2023Interest income:Interest income on mortgage loans(1)$1,890,700 $1,617,954 Other interest income14,514 10,923 Total portfolio interest income1,905,214 1,628,877 Interest expense:Interest expense on HMBS and nonrecourse obligations(1)(1,559,341)(1,273,159)Interest expense on other financing lines of credit(77,945)(87,839)Total portfolio interest expense(1,637,286)(1,360,998)Net portfolio interest income$267,928 $267,879 

(1) Amounts include interest income and expense on all loans held for investment, subject to HMBS related obligations, loans held for investment, subject to nonrecourse debt, other loans held for investment, HMBS related obligations, and nonrecourse debt.

For the year ended December 31, 2024 versus the year ended December 31, 2023

Total revenues increased $56.5 million or 49.0% as a result of the following:

•Net fair value changes on loans and related obligations improved $44.5 million or 30.9% primarily as a result of improved fair value changes from model amortization compared to the 2023 period. The improvement in fair value changes from model amortization of $27.3 million was primarily due to a higher modeled yield on a larger portfolio during the year ended December 31, 2024 compared to the 2023 period.

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