Is IndyMac Looking To Unload Financial Freedom?
December 16th, 2007 | by admin Published in Commentary, Financial Freedom, Products, Reverse Mortgage | 8 Comments
According to a recent article from Bloomberg, IndyMac CEO Michael Perry mentions that the company is considering selling part of its reverse mortgage business. IndyMac bought Financial Freedom in 2004 for $125 million and Perry estimates the current value at $300 million to $500 million. Since acquiring Financial Freedom, IndyMac has recouped $135 million in profits from the business.
In early November, the second- largest independent U.S. mortgage lender, reported a loss five times bigger than the company forecast in September as foreclosures and late payments rose to a record. Most of IndyMac’s recent credit problems stem from loans to home builders, home-equity lines of credit and subprime loans to the riskiest borrowers, Perry said. The #1 Alt-A lender in 2006 has stopped virtually all of that lending, and is only originating conforming Fannie & Freddie paper. Conforming A-Paper is a great business but it’s all about price and from my experience IndyMac has never been competitive in that arena.
I’m curious why IndyMac doesn’t focus all of their resources on the reverse mortgage market when they see the success that FF is having? Maybe they are… Recently IndyMac AE’s started calling to get us signed up to sell them reverse mortgages… not conforming A-Paper. It’s funny, when I tell them we are already signed up with Financial Freedom it’s obvious that they are embarrassed and they politely ask me not to tell our FF AE’s that they called.
It’s obvious that IndyMac is struggling right now but is it worth selling your most profitable line of business to keep your boring A-Paper wholesale business? If you have $300 - $500 million laying around it sounds like Michael Perry might want to hear from you.
IndyMac Reports $202.7 Million Loss on Late Payments (Update6) (Bloomberg)
Technorati tags: Reverse Mortgage, Reverse Mortgage News, IndyMac, Financial Freedom
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December 16th, 2007 at 6:11 pm (#)
[…] Is IndyMac Looking To Unload <b>Financial Freedom</b>? […]
December 17th, 2007 at 10:46 am (#)
Hm, just a thought…
I wonder if Chase, Citigroup, or WAMU will decide to enter the reverse mortgage market by purchasing Financial Freedom… .
These financial institutions are the only ones who have not entered the reverse mortgage industy yet…
Does anyone know what is keeping these top lenders from penetrating the reverse mortgage market?
December 17th, 2007 at 1:10 pm (#)
“It’s obvious that IndyMac is in trouble right now but is it worth selling your most profitable line of business to keep your boring A-Paper wholesale business? “(/i>
Well said, however, based on IMB’s current share value, it might be the only thing keeping them alive.
Although, a $300 - $500 million pricetag for Financial Freedom is excessive, based on their latest Fitch rating.
January 10th, 2008 at 2:35 pm (#)
I have NOT heard that IndyMac is in the market for selling FF. In fact they are stolling doing loans. Please give more information but as of today 1/9/08 they have No plans for this action.
January 10th, 2008 at 2:40 pm (#)
As far as I know
indymac has no intentions of selling FF They are still doing doing loans as of today 1/9/08.
January 21st, 2008 at 1:51 pm (#)
[…] no secret that IndyMac has been contemplating selling Financial Freedom but I would think a well functioning Financial Freedom would get a better price vs. low on staff […]
July 16th, 2008 at 9:38 pm (#)
I knew Mike Perry did know what he was doing. That’s the reason why I accepted their voluntary severance packet in Fall ‘07. For the good of company, No Indymac managers should be running Financial Freedom. Give the power back to FF.
July 18th, 2008 at 10:42 am (#)
Very Interesting !!
Wonder who will take over F F now that IndyMac failed.
Would be nice if was Wells Fargo ??