Company executives hinted at this during its first quarter earnings call in May, when discussing the balance sheet.

"We are moving proactively to review our options and holding productive conversations with the necessary parties to identify an optimal path forward," when it came to the debt due in November 2025, Matthew Engel, chief financial officer, said on the call. "While it is premature to discuss specifics, we are encouraged by the early conversations."

The specific vehicle involved, FOA Funding, issued $350 million of 7.875% senior notes in November 2020. That was after FOA inked a deal to go public via a special purpose acquisition company merger deal inked in October 2020. At the time, its business model was much different than it is now.

In October 2022, FOA exited the first mortgage origination business to concentrate on reverse mortgages and home equity products. That included the December 2022 purchase of the then-largest Home Equity Conversion Mortgage lender, American Advisor Group. It also operates a mortgage services business.

Since going public, the company has seen its share of financial difficulties. In June it conducted another round of layoffs. It has received two notifications from the New York Stock Exchange for its stock price being out of compliance with the exchange's rules.

FOA posted a $20.3 million loss in the first quarter.

Under the exchange offer, the current note holders would get up to $200 billion of 7.875% senior secured first lien notes due in 2026 and $150 billion of 10% exchangeable senior first lien notes due in 2029, according to a Securities and Exchange Commission filing.

However, on the senior secured notes, the interest rate jumps a full percentage point on the first anniversary of the closing date through the scheduled maturity date. If any notes are still unpaid after Nov. 30, 2026, the interest rate goes up another percentage point to 9.875%.

Simpson Thacher & Bartlett served as counsel and Houlihan Lokey Capital as financial advisor to the company and its subsidiaries.

The transaction already has the approval of holders of over 93% of the aggregate principal amount of the notes. That includes the "Libman Parties" that hold 22% of the notes, which notified the board on June 24 they intended to participate in the exchange. Brian Libman is the founder and chairman of FOA.

Finance of America is the latest mortgage company in recent weeks to go back to the capital markets, either to issue new debt or exchange old notes for later maturities.

On June 25, the same day FOA made its announcement, New York Mortgage Trust priced $60 million of 9.125% senior unsecured notes due to mature on July 1, 2029.

Redwood Trust on June 14 priced $85 million of senior unsecured notes due in 2029 at an interest rate of 9%.

Meanwhile, Loandepot, which is undergoing its own significant restructuring, received the support of nearly all the holders for an exchange of its $497.7 million of 6.5% senior notes due next year for new 8.25% notes maturing in 2027. The exchange ratio is $1,100 in new notes and cash for $1,000 of old notes.

Other nonbanks that did debt offerings this year are Mr. Cooper, Pennymac and Rithm Capital.