Indymac Federal Sold to Investor Group for $13.9 Billion

January 5, 2009 No Comments »


The FDIC has entered into a letter of intent to sell Indymac Federal to a private investor group that includes big names such as John Paulson and computer pioneer Michael Dell.

The failed bank will be sold to IMB HoldCo LLC, a thrift holding company controlled by IMB Management Holdings LP, for roughly $13.9 billion, and will be headed by current Dune Capital Management chairman Steven Mnuchin.

As part of the deal, the investor group will receive a $16 billion loan portfolio, a $6.9 billion securities portfolio, and 33 bank branches with approximately $6.5 billion in deposits.

Additionally, the group will get their hands on a servicing platform representing $157.7 billion in unpaid principal balance as well as Financial Freedom, a billion dollar reverse mortgage business.

The FDIC has agreed to share losses on the loan portfolio so long as the new owners continue the company’s existing loan modification program.

The program, launched in August 2008, found that 46,500 mortgages were eligible for modification.

Of those, 32,274 offers have been mailed to date, with 8,512 modifications completed and another 9,480 verbal acceptances of offers received.

The FDIC noted that the streamlined loan modification program has already provided total estimated savings of $423 million on a comparison basis versus the net present value of foreclosure.

The deal is expected to close in the first quarter of 2009, at which time $1.3 billion is expected to be infused into the Pasadena, CA-based bank and mortgage lender by the new owners.

I guess we haven’t seen the last of Indymac after all.

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