Industry News

H&R Block shutting down Option One, laying off 620

Sale to Cerberus can't be salvaged

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H&R Block Inc. is shuttering Option One Mortgage Corp., after agreeing to call off a deal to sell the troubled lender to Cerberus Capital Management. As of today, Option One has stopped accepting applications for mortgage loans, H&R Block said, and will lay off 620 employees and sell its loan servicing business. Option One will honor about $30 million loans in the pipeline, most of which are eligible for purchase by Fannie Mae and Freddie Mac. After funding loan commitments in process, Option One "will complete its exit from all mortgage origination activities," H&R Block said in a press release. H&R Block's Interim Chief Executive Officer Alan Bennett said the company would focus on its core tax preparation business. Bennett became interim CEO after the Nov. 20 resignation of Mark Ernst. "The principal business of H&R Block is helping millions of individuals and thousands of businesses meet their needs in connection with tax planning and filing tax returns, not making subprime mo...