KeyCorp on Thursday signed its long-awaited agreement to acquire Champion Mortgage, a source close to the deal said.

The Cleveland-based banking company would pay $200 million for the Parsippany, N.J.-based subprime mortgage lender. The current owners, chairman Joseph Goryeb and his family, would also collect an unspecified portion of Champion's earnings over three years.

A KeyCorp spokeswoman declined to comment. Sources said the deal would be announced early next week. KeyCorp offered a "substantial" premium over the second place bidder, said a lender familiar with the deal.

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