Private investors agree to buy IndyMac

PASADENA, Calif., Jan. 3 (UPI) -- IndyMac Bank, the California thrift that was taken over by federal regulators in July, found a buyer Friday, a group of private investors.

The investment group is headed by Steven Mnuchin, head of Dune Capital Management, the Los Angeles Times reported. It includes John Paulson, a hedge fund manager who made billions of dollars betting on a collapse in the housing market.

The group agreed to pay $13.9 billion for IndyMac and to share losses with the Federal Deposit Insurance Corp., the FDIC said. Terry McLaughlin, a veteran of Merrill Lynch Bank and Trust and Fleet Bank, is to be president and chief executive officer.

In 2007, IndyMac employed about 10,000 people at its Pasadena, Calif., headquarters and its branches. It was one of the 10 biggest mortgage lenders in the country.

Before it became the third-largest bank to fail since the FDIC was formed in 1934 to insure deposits, it tried to move into conventional mortgage lending from subprime loans.