IndyMac acquires reverse mortgage provider

IndyMac Bank has announced it will acquire Financial Freedom Holdings, a leading provider of reverse mortgages in the country, by purchasing approximately 94 percent of its outstanding shares of common stock.

Financial Freedom Holdings will become a subsidiary of IndyMac Bank. The transaction is valued at about $80 million, assuming Financial Freedom performs as projected through the closing date.

The transaction is expected to close in the second or third quarter, pending certain conditions such as regulatory approval.

The remaining common stock shares are held by Financial Freedom's CEO and are subject to a separate stock purchase agreement with IndyMac Bank. Financial Freedom's CEO and certain other senior management members have employment agreements with IndyMac, contingent upon the transaction's closing.

Reverse mortgage loans produced by Financial Freedom in 2003 totaled $976 million. Reverse mortgages are non-recourse, predominantly FHA-insured mortgages that allow homeowners aged 62 or older to convert home equity to cash.

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