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Onity Sells Reverse-Mortgage Portfolio to FOA, Shifts Focus to Primary Mortgages
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Published in Business and Finance on Friday, November 21st 2025 at 5:13 GMT by HousingWire- 🞛 This publication is a summary or evaluation of another publication
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Onity Sells Reverse‑Mortgage Business to FOA: A Shift in the Home‑Equity Landscape
Onity, the home‑equity lender created by a partnership between AmeriHome Capital and HomeBridge Mortgage, has announced that it is selling its entire reverse‑mortgage portfolio to FOA, a growing player in the reverse‑mortgage space. The transaction, which was finalized earlier this month, is part of Onity’s broader strategy to streamline its operations and concentrate on the core areas of residential mortgage origination and servicing. For FOA, the deal represents a significant expansion into the reverse‑mortgage market and a boost to its technology and servicing capabilities.
The Anatomy of the Deal
While the publicly released press statement does not disclose an exact purchase price, it does note that FOA is acquiring “all of Onity’s reverse‑mortgage originations, servicing assets, and related technology.” The transfer includes a robust pipeline of active loans, a seasoned servicing team, and a proprietary platform that handles underwriting, documentation, and compliance for reverse mortgages. The deal was structured to be completed over a short timeline—just a few weeks—so that customers and partners experience minimal disruption.
FOA, which has built its reputation around modern, digital‑first reverse‑mortgage solutions, will now be the sole custodian of Onity’s 2023–2024 loan portfolio. The company is positioning itself to become one of the top five reverse‑mortgage originators in the United States, according to its spokesperson. “This acquisition gives us a strong foundation of high‑quality loans and a skilled team, all of which align perfectly with our vision to grow the reverse‑mortgage market while maintaining exceptional service standards,” the FOA executive noted.
Onity, for its part, has said that it will retain its core mortgage origination business, including conventional and FHA loans, and will continue to serve the existing customers and partners who rely on its technology platform. The company’s CEO stated, “By divesting the reverse‑mortgage segment, we can focus our resources on enhancing our origination platform and expanding our reach in the primary mortgage market.”
Why Onity Is Making the Move
The decision to sell the reverse‑mortgage arm follows a period of significant change for Onity. Founded in 2022 as a joint venture between AmeriHome and HomeBridge, Onity sought to carve out a niche in the home‑equity space. While the company quickly grew its mortgage origination volume, the reverse‑mortgage segment presented unique challenges, from regulatory oversight to the need for specialized servicing and customer education.
Onity’s leadership has indicated that the sale is a deliberate step to concentrate on “the high‑velocity areas of the mortgage pipeline” where the company can achieve scale more efficiently. By shedding a business that demands a distinct operational model, Onity can invest more heavily in its digital platform, risk analytics, and partner relationships in the primary mortgage market.
The reverse‑mortgage market itself is evolving. Regulatory bodies such as the Consumer Financial Protection Bureau (CFPB) and the Department of Housing and Urban Development (HUD) have tightened rules around disclosures, borrower protection, and servicer obligations. Meeting these requirements requires a dedicated team with expertise in both the legal and financial aspects of reverse mortgages. For a company whose core competencies lie in conventional lending, the added complexity has proven to be a strategic misfit.
FOA’s Vision and Market Implications
FOA is not new to the reverse‑mortgage arena. The firm has been steadily building a portfolio of digital tools that simplify the origination process, from automated underwriting to real‑time loan tracking. By acquiring Onity’s established portfolio, FOA will be able to accelerate its growth trajectory without starting from scratch.
The acquisition is expected to bring FOA’s existing product suite—such as reverse‑mortgage calculators, educational resources, and a mobile app—into contact with Onity’s loan pool. This integration will allow FOA to cross‑sell complementary products, including home‑equity lines of credit and refinancing options. Moreover, FOA’s data‑driven approach to borrower profiling could help it reduce risk and improve servicing efficiency across the newly expanded loan book.
From an industry standpoint, the deal signals a trend of consolidation among lenders who specialize in niche segments of the mortgage market. Similar moves have been seen in the conventional and FHA lending arenas, where larger firms absorb smaller players to gain market share and technology. However, the reverse‑mortgage space remains comparatively fragmented, with only a handful of major players commanding a sizable portion of the U.S. market. FOA’s expansion could shift the competitive balance and spur further consolidation as larger institutions seek to diversify their offerings.
Customer Impact and Transition Process
One of the most pressing concerns for borrowers is how the transition will affect their day‑to‑day experience. FOA has committed to maintaining continuity in servicing. Existing Onity reverse‑mortgage borrowers will receive a welcome letter from FOA’s team, outlining the change and confirming that all loan terms will remain intact. FOA will also assume responsibility for servicing, which includes managing escrow accounts, processing payments, and handling borrower inquiries.
Onity has pledged that it will provide support to its partners—such as mortgage brokers, financial advisors, and homeowner‑education providers—to facilitate a smooth handover. “We are working closely with FOA to ensure that our partners can continue to provide top‑notch service to their clients,” Onity’s COO confirmed. This collaborative approach aims to reduce friction and maintain trust among stakeholders.
Looking Ahead: Opportunities and Challenges
The sale of Onity’s reverse‑mortgage business to FOA illustrates how companies are recalibrating their strategic focus in response to evolving market dynamics. For Onity, the divestiture frees up capital and operational bandwidth to bolster its primary‑mortgage platform, potentially driving higher origination volumes and improved profitability. For FOA, the acquisition provides a substantial loan book, a seasoned servicing team, and a proven technology stack—elements that can accelerate growth and deepen its presence in a niche but growing segment.
Nevertheless, the deal is not without challenges. FOA will need to integrate Onity’s systems with its own, ensuring data integrity and regulatory compliance. It will also have to manage the expectations of borrowers who may be accustomed to Onity’s servicing style. Moreover, the reverse‑mortgage market is subject to ongoing regulatory scrutiny, and any changes to federal or state rules could impact both FOA’s and Onity’s business models.
In the broader context, this transaction reflects a maturation of the home‑equity and reverse‑mortgage markets. As lenders refine their focus, we can expect further consolidation, the emergence of hybrid business models, and continued investment in technology to streamline underwriting, customer outreach, and post‑origination servicing. For consumers, these shifts underscore the importance of staying informed about the products they choose and the institutions that manage their finances.
Conclusion
Onity’s decision to sell its reverse‑mortgage portfolio to FOA marks a significant pivot for both firms. Onity will sharpen its focus on the high‑velocity primary‑mortgage market, while FOA will leverage the acquisition to cement its position as a leading reverse‑mortgage provider. As the mortgage landscape continues to evolve, such strategic realignments will shape the competitive environment and potentially bring new efficiencies—and new risks—to the home‑equity space.
Read the Full HousingWire Article at:
[ https://www.housingwire.com/articles/onity-sells-reverse-mortgage-business-foa/ ]
