While much of 2023 was focused on bolstering its presence in the space, highlighted by the launch of a proprietary second-lien product and integration with American Advisors Group — the former top reverse-mortgage lender it acquired — future goals will require a heavy marketing push, part of the Plano, Texas-based company's three-year plan.  

"There's a significant gap as it relates to customer understanding and appeal of reverse mortgage products and the category overall," said Kristen Sieffert, president of Finance of America Cos., in its fourth-quarter earnings call.

Finance of America's goal is to eventually originate $300 million per month in reverse mortgages, which would translate into an approximate 40-cent to 50-cent adjusted earnings per share, Finance of America leaders said. Current monthly volumes come in between $100 million and $150 million, CEO Graham Fleming said during the call. 

In the fourth quarter, Finance of America reported improvement in its earnings with net income of $164.7 million. The bottom line was highlighted by noncash positive fair-value changes on its assets and factored in both a gain of $171.4 million from continuing operations and a $6.7 million loss from discontinued segments. The quarterly profit was a reversal from losses of $175 million in the third quarter and $180 million a year earlier. 

For the full year, Finance of America posted a $218.2 million loss, narrowing from $715.6 million in 2022. 

In its retirement solutions unit, newly produced reverse mortgages totaled $446 million in the final three months of 2023, down from $512 million in the third quarter. The segment recorded a pre-tax loss of $13 million, improving from $20 million in the third quarter. 

The lender attributed the decrease in volume to seasonal patterns and also its move to a single origination platform after the AAG merger, the last major integration milestone.

"With much of the foundational work close to being completed. It paves the way for a shift of attention to the growth levers in the plan," Sieffert said. 

The company might have a large task ahead in order to meet monthly origination goals. A recent study from Fannie Mae found only 15% of homeowners over the age of 60 willing to tap into their property's equity in retirement. Over 40% said they would not consider the option at all.

"We now have the components to change this," Sieffert said. "Within our three-year plan, we're committed to breaking this adoption barrier by investing in modernized messaging digital technology, and tailored customer-centric experiences." 

The plan would also have it lean into artificial intelligence. "We have selected key AI partners, and are excited to leverage these tools across sales, operations, marketing and data analytics," Fleming said.  

Meanwhile, Finance of America's portfolio management unit posted pre-tax fourth-quarter profit of $217 million compared to a loss of $124 million three months earlier. Assets under management inched up to $26.8 billion from $26 billion quarter over quarter

During the call, company leadership briefly addressed ongoing concerns about its potential delisting from the New York Stock Exchange. The NYSE warned Finance of America twice over three months about noncompliance after it failed to maintain the average minimum stock price of $1 per share over a consecutive 30-day period, most recently in mid February.