A consortium of private equity and hedge fund firms, including J.C. Flowers & Co., is close to a deal to buy the assets of failed mortgage lender IndyMac, according to media reports.

The consortium would buy the bank and its 33 branches, IndyMac's reverse-mortgage unit and a $176 billion loan-servicing portfolio, the source said told Reuters.

Flowers, of New York, is a private equity firm founded by a former Goldman Sachs partner. The prospective buyers also include Dune Capital Management and hedge fund Paulson & Co., an Associated Press source said.

Dune has recently been cleared for a bank charter. In principle, this means the firm could qualify for federal money under the so-called TARP program. FDIC officials have not confirmed the reports, saying an announcement should be made by year-end.

IndyMac Bank was taken over by regulators after it failed July 11 in one of the largest bank failures in U.S. history. At the time, it had $32 billion in assets and $19 billion in deposits. FDIC estimates IndyMac's failure cost the agency $8.9 billion.

IndyMac Bancorp Inc., the holding company, later filed for Chapter 7 protection, indicating it plans to liquidate.

• Read the full Associated Press story.

• Read the full The Mortgage Lender Implode-O-Meter story.