| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers O > Headlines for Option One Mortgage Corp. > News item |
H&R Block won't sell Option One Mortgage to Cerberus; mortgage origination to stop
By Lisa Kerner
Charlotte, N.C., Dec. 4 - H&R Block, Inc. agreed to terminate the agreement to sell its wholly owned subsidiary Option One Mortgage Corp. to a Cerberus Capital Management, LP affiliate.
While H&R Block and Cerberus discussed changes to the April 2007 agreement in light of mortgage market conditions, the companies failed to reach an agreement that was mutually acceptable, according to an H&R Block news release.
In addition, H&R Block said it will close all remaining origination activities of Option One and has halted the acceptance of any new loan applications in its effort to exit from subprime mortgage lending. The move is expected to result in the elimination of about 620 staff positions.
Option One will honor its existing loan commitments of some $30 million in principal loan amount. The bulk of the loans should be eligible for sale to Fannie Mae or Freddie Mac, the release stated.
Additional changes to the Option One business include naming Fabiola Camperi as president. Camperi is currently the company's executive vice president of operations.
"The termination agreement frees H&R Block to halt Option One's remaining origination activities without incurring additional operating costs," H&R Block chairman Richard C. Breeden said in the release.
"At the same time, we will continue to pursue the ultimate sale of our servicing activities. The H&R Block board determined this outcome was in the best interests of our shareholders, and we hope it will ultimately lead to higher value than we could have achieved through a renegotiated Cerberus transaction."
H&R Block is a provider of tax, financial, accounting and business consulting services and products based in Kansas City, Mo.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.