Finance of America plans more cuts after big losses in Q2
Finance of America's losses deepened in the second quarter as spread widening intensified, impacting even loan segments that were previously insulated from it, and outpacing gains in areas like servicing advisory services. The company's $0.70 per diluted share in the second quarter was in line with Wall Street Journal estimates. The adjusted net loss for the mortgage division, a category that includes home improvement loans, was $21 million, compared to $10 million the previous quarter. The company's specialty finance and services segment, which includes reverse mortgages, commercial and lender services, took a $1 million loss in the second quarter compared to $47 million in adjusted net profit during the first quarter. Finance of America has already reduced company headcount and expenses by roughly 20%, and it plans to make additional cuts that will save the company over $100 million in 2022, Graham Fleming, president and interim CEO, said in a conference call. The company may invest more in commercial, reverse mortgages and mortgage servicing rights, given that they could be a source of multiple customer leads for its diverse financial services business lines. While Finance of America does not have a large servicing book of business, the demand for its advisory services in that area have been strong.