Global credit rating agency DBRS Morningstar assigned a good rating to reverse mortgage industry leader Finance of America (FOA), reconfirming the ranking the company was assigned at a similar point last year. The rating is officially classified as MOR RVO2 by Morningstar.
Morningstar characterized FOA's earnings generation capacity as acceptable despite its reliance on transactional revenue sources, which introduces the potential for meaningful volatility in earnings. Its credit risk is limited due to securitization and selling of loans rather than holding them on its balance sheet.
Similar to other nonbank mortgage companies, FOA's narrow funding profile relies predominantly on secured wholesale funding sources, leading to a highly encumbered balance sheet that may limit financial flexibility during periods of market stress.
#dbrs-morningstar #finance-of-america #reverse-mortgage-industry #credit-rating #senior-leadership-stability
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