Finance of America (FOA) has closed a deal to acquire Onity's reverse mortgage assets, adding $5.2 billion in unpaid principal balance (UPB) to its portfolio. The transaction includes Onity's servicing rights and its pipeline of reverse mortgage loans, marking a significant consolidation in the specialized lending space.
Onity will exit the reverse mortgage origination business entirely as part of the agreement. The move allows FOA to scale its reverse mortgage operations at a time when the sector faces demographic tailwinds from an aging population.
The deal underscores ongoing consolidation in the reverse mortgage market, where larger players are absorbing smaller originators to gain economies of scale. FOA is positioning itself to capture a larger share of home equity conversion mortgage (HECM) volume.
For borrowers, the consolidation could mean more standardized servicing but fewer originators to choose from. Sellers may benefit from increased liquidity as larger firms like FOA streamline operations across a larger asset base.
Some analysts caution that rapid consolidation may reduce competition, potentially leading to less favorable terms for borrowers over time. However, proponents argue that scale improves compliance and customer service capabilities.