IndyMac Bancorp, which runs one of Southern California’s largest savings and loans, today said it is pondering selling through an initial public offering a 20 percent stake in a unit that provides reverse mortgages.

The company said its board of directors authorized management to evaluate and plan for the potential sale of a minority economic stake of approximately 20 percent in IndyMac Bank’s reverse mortgage subsidiary, Financial Freedom Senior Funding Corp.

Pasadena, Calif.-based IndyMac said conducting an IPO for Financial Freedom will allow it to monetize its investment in the unit, foster growth, and eventually help support both companies’ stock prices.

Offsetting these benefits to a minor extent, the company said, is the additional time and expense of management overseeing a second public company. IndyMac did not provide a timetable for an IPO.

A reverse mortgage is a loan that enables homeowners 62 or older to borrow against the equity in their homes, without having to sell the home, give up title, or take on new monthly mortgage payments. Loan proceeds can be used for any purpose, and taken out as a lump sum, fixed monthly payments, line of credit, or a combination.

Financial Freedom originated $1.1 billion in reverse mortgages and earned $8 million in the first quarter of 2006, compared to $507 million in originations and $4.2 million in earnings for the first quarter of 2005, the company said.

For the full year 2005, Financial Freedom’s national market share is estimated to be 56 percent of reverse-mortgage originations and 53 percent of reverse-mortgage servicing, and as of March 31, 2006, Financial Freedom had 984 employees, the company said.

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