Company: FOACW
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001628280-25-052025
Chunk: 61

Company: Finance of America Companies Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Item 1
Chunk 61
---
 3

22

Finance of America Companies Inc.Notes to Condensed Consolidated Financial Statements (Unaudited)

HECM 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 3Other assetsLoans held for saleThe reverse mortgage loans are valued based on an expected margin on sale.Level 3Retained 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 3LiabilitiesHMBS related obligationsHMBS related obligationsThe fair value is based on the net present value of projected cash flows over the estimated life of the liability. The fair value of the HMBS related obligations also includes the consideration required by a market participant to transfer the HECM and HMBS servicing obligations, including exposure resulting from shortfalls in FHA insurance proceeds as well as assumptions that it believes a market participant would consider in valuing the liability, including, but not limited to, assumptions for repayment, costs to transfer servicing obligations, shortfalls in FHA insurance proceeds, and discount rates. The significant unobservable inputs used in the measurement include WAL, CPR, and discount rates.  Level 3Nonrecourse debtNon-agency reverse mortgage loan securitizations and performing/nonperforming HECM securitizationsThe fair value is based on the net present value of projected cash flows over the estimated life of the liability. The significant unobservable inputs used in the measurement include WAL, CPR, and discount rates.Level 3Convertible NotesConvertible NotesThe Convertible Notes are measured based on the closing market price of the Company’s publicly-traded stock on the applicable date of the Condensed Consolidated Statements of Financial Condition. Refer to Note 10 - Notes Payable for additional information. There were no Convertible Notes as of December 31, 2024.Level 2Repurchase Agreement obligationRepurchase