Leading reverse mortgage industry lender American Advisors Group (AAG) informed wholesale partners on Wednesday that due to the impending acquisition of AAG by Finance of America Companies (FOA), loans in process will need to be funded by March 31, and AAG’s existing wholesale division will stop accepting new loans beginning on March 1. This is according to a partner communication reviewed by RMD.
All loans submitted after March 1 will need to go directly to Finance of America Reverse (FAR), the entity which will oversee the AAG assets in the impending acquisition deal. Loans currently in process with AAG that are submitted prior to March 1 will need to be purchased or funded by March 31, and any loans that cannot meet that deadline will need to be resubmitted through FAR.
For existing AAG partners not yet approved by FAR, the companies have put into place a “streamlined approval process,” according to the communication, and are encouraged to reach out to their account executives to begin the process. For partners who are already approved by FAR, no further action will be required.
A FAR spokesperson declined to provide additional comment.
Previously, representatives of AAG referred any questions regarding the acquisition to FAR.
FOA announced its intention to acquire AAG in early December 2022, in a deal supported by a $30 million capital investment through a private placement of FOA’s common stock from existing stockholders, including entities affiliated with chairman and founder Brian Libman.
The timing of FOA’s acquisition announcement coincided with the shutdown of the company’s forward mortgage business, which led to a $302 million loss in the third quarter. The reverse mortgage division, however, was profitable.
“Both AAG and FAR will continue to operate as separate brands under the FOA umbrella,” FAR President Kristen Sieffert told RMD in December regarding the acquisition process. “Upon closing, the AAG centralized retail team will operate under the AAG brand, which they have invested heavily in over the years. [I] will oversee the entire company following closing and integration, including the various sales channels and across both brands.”
It remains unclear which AAG employees will be moving under FAR’s corporate umbrella once the deal goes through. In the December interview, Sieffert said only that personnel decisions would be made on a case-by-case basis.
Industry reactions to news of the deal ran the gamut from concern about another major lender effectively exiting the space, and optimism about FAR’s assumption of control over a well-regarded call center.
In her interview with RMD, Sieffert said that the acquisition of AAG’s advertising apparatus was an essential piece of the transaction, and industry professionals were encouraged that AAG’s well-recognized advertising would continue with spokesman Tom Selleck.