Company: FOACW
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001628280-25-052025
Chunk: 78

Company: Finance of America Companies Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Item 1
Chunk 78
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 loss is not probable but is reasonably possible or may consider a loss to be probable but cannot calculate a precise estimate of losses. For these matters, the Company may be able to estimate a range of possible loss. In determining whether it is possible to provide an estimate of loss or range of possible loss, the Company reviews and evaluates its material litigation and regulatory matters on an ongoing basis, in conjunction with any outside counsel handling the matter. Based on our assessment of the facts and circumstances, we do not believe any of these matters, individually or in the aggregate, will have a material adverse effect on our financial position, results of operations, or cash flows in a future period. The Company is a defendant in a representative lawsuit alleging violations of the California Labor Code and brought pursuant to the California Private Attorneys General Act (“PAGA”). The Company has settled the individual arbitration claim for a de minimis amount and is defending the representative PAGA claim. Due to the unpredictable nature of litigation generally, and the wide discretion afforded the Court in awarding civil penalties in PAGA actions, the outcome of this matter cannot be presently determined, and a range of possible losses cannot be reasonably estimated. Although this action is being vigorously defended, the Company could, in the future, incur a judgment or enter into a settlement that could have a negative effect on its results of operations in any particular period.Legal expenses, which include, among other things, settlements and the fees paid to external legal service providers, were $0.5 million and $1.6 million for the three and nine months ended September 30, 2025, respectively, and $0.7 million and $2.8 million for the three and nine months ended September 30, 2024, respectively. These expenses are included in General and administrative expenses in the Condensed Consolidated Statements of Operations.

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

12.    Commitments and ContingenciesServicing of Mortgage LoansThe Company has contracted with third-party providers to perform specified servicing functions on its behalf. These services include maintaining borrower contact, facilitating borrower advances, generating borrower statements, collecting and processing payments of interest and principal, and facilitating loss-mitigation strategies in an attempt to keep defaulted borrowers in their homes. The contracts are generally fixed-term arrangements, with standard notification and transition terms governing termination of such contracts.For reverse mortgages, defaults on loans leading to foreclosures may occur if borrowers fail to meet