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Billionaire Wilbur Ross moves into subprime servicing

Private equity firm agrees to buy Option One servicing rights

A private equity firm headed by billionaire Wilbur Ross would become the second-largest servicer of subprime loans -- collecting payments on about half a million mortgages -- if it closes a deal to acquire the servicing business of Option One Mortgage Corp. H&R Block Inc. announced today that W.L. Ross & Co. LLC has agreed to purchase the servicing business of its Option One Mortgage subsidiary and the company's call center in India for about $1.1 billion At the end of January, Option One held servicing rights to $54 billion in mortgages, or about 300,000 loans, according to H&R Block's latest quarterly report to investors. WL Ross last year agreed to pay about $500 million for the rights to service bankrupt lender American Home Investment Corp.'s portfolio of more than 200,000 subprime loans. Together, the Option One and American Home Investment Corp. servicing portfolios would total $95 billion, making W.L. Ross the nation's second-largest subprime loa...

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