Finance of America Companies (FOA) announced on Monday that its acquisition of reverse mortgage lender American Advisors Group (AAG) has resulted in Graham Fleming being named CEO on a permanent basis and former Finance of America Reverse president Kristen Sieffert being promoted to the parent company’s president.
Each promotion is effective on April 5. In a previous earnings call, FOA leadership explained that the closing of the AAG deal was scheduled to take place on March 31.
Fleming, who joined FOA in 2013, has served as interim CEO since former CEO Patti Cook retired in 2022. Fleming has 25 years of experience in the mortgage industry, which includes prior leadership positions at Icon Residential Lenders and Finance America, a company that is unrelated to FOA.
“I am proud to lead Finance of America as we bring a differentiated offering to the industry that will help even more Americans embrace a modern retirement and understand the value and benefits of home equity,” Fleming said in a statement. “We have long been the largest provider of proprietary reverse products and a leader in education for the industry. Our recent acquisition adds a new direct-to-consumer channel to our capabilities and expands our reach to millions of consumers.”
Sieffert joined the company in 2012 and was promoted to COO the following year. She became the president of FAR’s predecessor, Urban Financial, in 2015 — and oversaw the rebranding efforts later that year.
“I am excited to work with so many talented individuals focused on helping Americans live well, longer,” Sieffert said. “We believe the home can act as a shelter and a springboard for today’s modern retirees to achieve their goals and thrive. By making the home the centerpiece of longevity and retirement, Finance of America is committed to becoming a lifelong resource that empowers customers with innovative tools to build a remarkable, fulfilled and most importantly, sustainable financial future.”
‘New chapter’ with AAG deal
Sieffert said the FOA team has helped to make the company the “driving force” for the reverse mortgage product category.
“This sets an enormous stage for us to do what we do best – innovate and execute – and to elevate the customer experience,” Sieffert said. “It also allows us to look toward expanding our impact. With the large direct-to-consumer platform AAG provides, Finance of America’s deep innovation strengths and capital markets prowess will open expansion opportunities as we create new financial products aimed at the core 55+ homeowner audience.”
By closing the AAG deal, the FOA platform is now built around the concept of assisting its clients with their aging in place goals, the company said.
In addition to reverse mortgages — both the Federal Housing Administration (FHA) and private-label options — the company offers products related to home improvement, remodeling and homesharing.
“With the recently closed AAG acquisition, Finance of America is now one of the largest reverse mortgage lenders in the United States,” the company said in its announcement. “The transaction adds a direct-to-consumer retail channel whose advertising reaches more than 10 million consumers annually. The transaction highlights FOA’s strategic vision to become the preeminent destination for Americans who can benefit from a modern, enhanced retirement approach that centers on unlocking the potential of the home to deliver an incredible array of advantages.”
The AAG deal was first announced in December. Shortly after, Sieffert said that in addition to acquiring the AAG reverse mortgage lending business assets, the company plans to take advantage of advertising campaigns with AAG spokesman and actor Tom Selleck.
“AAG’s marketing apparatus, including the advertising featuring Tom Selleck, is a critical piece of the acquisition, and continued investment in broad audience exposure is a key part of the model for this channel,” Seiffert said in December.
Reactions to the consolidation of two of the industry’s largest players were divided, but many industry insiders said they were hopeful that the deal would benefit the wider reverse mortgage business.
FOA reported $182 million in net losses for its Q4 2022 financial results, and FOA’s adjusted net loss was marked as $56 million. For the full year, FOA recorded an adjusted net loss of $61 million. The company attributed the majority of the losses to the dissolution of its forward mortgage division late last year, but said it remains committed to “high growth” businesses, including FAR.
The FAR and AAG consolidation will make FOA easily the largest reverse originator in the industry.
“AAG is the largest HECM originator, while we are the largest proprietary originator, making it a strategic fit within our company and our focus,” Fleming said on the earnings call.
According to Home Equity Conversion Mortgage (HECM) endorsement data compiled by Reverse Market Insight (RMI), AAG was the largest lender in the industry, while FAR was the fourth largest, with 17,440 endorsements between the two companies recorded in the 12 months ending in February 2023.