America’s non-credit business expected to surpass mortgage in ’21

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Finance of America’s diversified business model should help newly opened company “Overcome the obstacles the mortgage business faces in the future,” CEO Patricia Cook said in the company’s first quarter income statement.

During the first quarter, portfolio management based on commissions and lender services Cook noted that the companies have made significant contributions to the company’s results.

“In fact, we expect premiums from our non-mortgage segments to continue to rise for the remainder of the year, while the mortgage segment will decline from last year,” Cook said. “Based on current market conditions, we estimate that the net effect could be a reduction in adjusted EBITDA for the full year of 2021 by about 20% compared to the same period last year.”

Cook pointed to the company’s April launch housing finance departmentwhich he acquired after purchasing the assets of Renovate America out of bankruptcy… In May, the company made its 17th acquisition since it was founded in 2013 by purchasing Wholesale Channel Parkside Lending for about $ 40 million.

The company also launched reverse mortgage hybrid product, EquityAvail, the potential clientele of which in March was estimated at 2 million borrowers.

Funding America reported first-quarter net income of $ 124 million, up from $ 153 million in the fourth quarter; in the first quarter of last year, America’s Finance lost $ 43 million.

His forward mortgage business had $ 96 million in net income before tax in the first quarter as he financed $ 8.4 billion in loans. The profit on the selling margin for the period was 340 basis points.

This compares to a net profit before tax of $ 135 million in the fourth quarter, when he financed $ 8.8 billion, but profit on sales was higher at 431 basis points.

According to Cook, the margins of the correspondent and wholesale channels fell more than the retail ones.

A year ago, Finance of America Mortgage had sales of $ 4.2 billion, net income before taxes of $ 10 million, and profit on sales of 210 basis points.

Compared to the same periods, the reverse mortgage business has shown an increase in profits. It earned $ 45 million in the first quarter, up from $ 33 million in the fourth quarter and $ 17 million in the first quarter of 2020.

According to Cook, “our business of reverse origin, where the drivers of growth are less correlated with the direction of interest rates,” showed “near-record volumes and strong growth.” “Baby boomers in particular are increasingly turning to old age, and our reverse mortgage products enable this demographic to leverage the capital accumulated in their homes.”

Reverse mortgage financing increased to $ 759 million from $ 655 million in the previous quarter and $ 656 million in the previous year.

The commercial segment of the company, which mainly provides loans for fixed, inverted and rent for one family funding was $ 341 million, up from $ 307 million in the fourth quarter, but up from $ 459 million a year ago.

Cook said that “there is more marginal competitiveness in fixed and flip trading, but we are well aware of where this market is and where it will move next.” “I think the real opportunity for us is when you look at [single family rental lending] market.”

This business will benefit from Federal Housing Finance Agency limit about Fannie Mae and Freddie Mac’s ability to acquire non-owner properties, she continued.

Incenter, a lending business, generated $ 13 million in pre-tax revenue in the first quarter, driven largely by strong agency and underwriting revenues and increased activity mortgage brokerage and consulting business.

In the fourth quarter, he earned $ 4 million, and in the first quarter of last year, he earned $ 3 million in this segment.



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