IndyMac Bank, Pasadena, Calif., has reported an agreement to buy the nation's largest reverse mortgage lender, Financial Freedom Holdings Inc., Irvine, Calif.Lehman Brothers Bank FSB, New York, owns the majority of Financial Freedom, with the remaining shares owned by James Mahoney, Financial Freedom's chief executive. IndyMac said it has agreed to acquire Lehman Brothers' 93.75% equity stake for approximately $80 million. Mr. Mahoney will retain his share of the company. He and other members of senior management have entered into employment agreements with IndyMac. The company said it would have a permanent capital deployment of $50 million to $60 million. Those funds could come from a common stock offering or the issuance of trust preferred securities. Financial Freedom originates the Federal Housing Administration's Home Equity Conversion Mortgage and Fannie Mae's Home Keeper product as well as its own proprietary product. Approximately 93% of the loans are HECMs that were sold to Fannie Mae. Financial Freedom's volume in 2003 totaled $976 million.

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