FoA downsizes amid corporate restructuring and market downturn
Multichannel lender finance of america (FoA) laid off hundreds of employees across multiple rounds in the second and third quarters of 2022. The layoffs come amid a downturn in the mortgage market and a restructuring of a larger company, several said. current and former employees at HousingWire.
The Texas-based company has reduced its workforce in centralized operations and branches, cutting processors, underwriters, reviewers and the support team, with its last layoff on July 15, sources said.
The job cuts also affected FoA staff in the Philippines, where the company has employees “for clerical duties, such as opening loans, disclosures, and assessment checklists,” according to a former employee in a management position.
FoA did not respond to requests for comment.
Mario Glover, a former business support analyst, was fired in a video call with his manager and a human resources representative on July 15, just three months after starting work at the lender.
He was given no notice – and, after two weeks, he is still waiting for his two-week severance package.
“I was there to help internal employees with software and technical issues,” Glover said. “When I started we were probably seeing 1,200 tickets a week, and now it’s between 500 and 600 – so you don’t need the same number of people to support employees.”
Like many competitors, FoA’s traditional mortgage business has been hurt by rising mortgage rates.
Corporate loan origination volume fell to $5.1 billion in the first quarter, down 26% from the prior quarter and 39% from the first quarter of 2021. Overall, FoA recorded a loss of $64 million in the first quarter of 2022. (The company is expected to report second-quarter results on Thursday.)
FoA cut around 600 jobs between March 2021 and March 2022.
“As the volume goes down, the number of people you need goes down. And it’s hard. You have to let people go,” Patti Cook, the former chief executive, told HousingWire in an interview in late March. “We let people go ashore, to the United States, and we have a big operation in Manila – we had to cut staff there as well.”
FoA’s subsidiary, Incenter, operates an overseas branch in Manila for transactional execution support, according to documents filed with the Security and Exchange Commission (SECOND). Cook said in March that the company had about 1,000 employees in the Philippines.
Besides the market downturn, sources said there was another reason for the downsizing: FoA is restructuring its operations.
“The market downturn is a reason for the layoffs, that’s for sure. But they are using this as an opportunity to restructure the organization with their ‘One FOA’ initiative,” a former official said. “It hasn’t been explained very well, but it’s basically a flattening of the organization, taking business channels out of their current silos.”
Amid changes to the C-Suite and the non-bank lender’s business lines, mortgage industry veteran Bill Dallas has stepped down as president of Finance of America Mortgage in March.
Cook stepped down as CEO on June 30 due to an existing medical condition. During his time as CEO, the company debuted on the New York Stock Exchange in April 2021, after merging with the blank checks company Play again Acquisition Corp.
Graham Fleming, chairman since October 2020, is the interim CEO, responsible for the term, reverse, commercial and renovation loan segments, as well as lender services.
In his March interview with HousingWire, Cook said the company plans to consolidate the wholesale business under Joe Hullinger, president of Finance of America Commercial.
Meanwhile, the call centers were to be led by Kristen Sieffert, president of Finance of America Reverse. The former CEO said these were steps to optimize the company’s business in the current environment.