Pasadena mortgage banker IndyMac Bancorp agreed to acquire 93.75% of Financial Freedom Holdings, a major provider of reverse mortgages, from Lehman Bros. Bank for about $80 million in cash.
Financial Freedom will become a subsidiary of IndyMac. Its chief executive, James Mahoney, who owns 6.25% of the reverse-mortgage firm, will retain that stake and stay on, IndyMac said. The transaction, which must be approved by regulators, is expected to close in the second or third quarter.
Financial Freedom produced $976 million in reverse mortgages in 2003. The loans convert home equity into cash, allowing retirees to remain in their homes while getting a stream of payments.
IndyMac shares rose 44 cents to $33.19 on the New York Stock Exchange.
-- E. Scott Reckard