H & R Block to sell mortgage unit

H & R Block announced today that it will sell its Option One Mortgage Corp. unit to private equity firm Cerberus Capital Management LP.
New York-based Cerberus, which created a company called OOMC Acquisition Corp. to execute the purchase, agreed to pay $300 million less than the value of Option One’s tangible net assets, which amounted to $1.27 billion at the end of January.
The value of the transaction will be calculated on the date of closing, which is expected to be Oct. 31.
The Kansas City-based tax preparer brought the unit to market in November, in an effort to bolt the home loan business as defaults in the subprime industry continued to rise (InvestmentNews, November 7) .
H&R Block also said it is closing the unit’s H&R Block Mortgage Corp., but will continue to provide its retail tax and other clients with prime residential mortgage loans through H&R Block Bank.