Private Equity Consortium Pays $13.9B for IndyMac

A consortium of private equity investors led by Dune Capital Management has agreed to pay $13.9 billion to acquire IndyMac and its $158 billion servicing portfolio from the Federal Deposit Insurance Corp. The new owners of IndyMac -- which also includes J.C. Flowers & Co., Paulson & Co. and others -- will control the nation's 10th largest servicing company, according to figures compiled by National Mortgage News and the Quarterly Data Report. Besides the servicing portfolio and platform, Dune and its partners will take control of: a $16 billion loan portfolio, $6.9 billion in securities, the Freedom Financial reverse mortgage business (including $20.2 billion in receivables) and 33 retail branches. The sale is not without risk to the government. FDIC has agreed to share losses on some of the thrift's loans and will be on the hook for $2 billion in construction and other loans made by the Pasadena-based IndyMac. The investors formed IMB Management Holdings to buy the thrift, which will be structured under a holding company called IMB HoldCo LLC. Steven Mnuchin, chairman and co-CEO of Dune, will be chairman and CEO of IMB. The sale was announced Friday afternoon. At least one other bidder -- also a private equity consortium -- was vying for IndyMac, which was created by Countrywide Home Loans in the 1980s as a non-conforming loan conduit. The investor consortium will capitalize the institution with $1.3 billion in cash. IMB will continue IndyMac's much ballyhooed loan modification program where troubled mortgages are restructured, providing consumers with easier payment plans.