Subprime Mortgages Snare H&R Block

KANSAS CITY – H&R Block, the nation’s leading tax preparation company, said this week it still cannot find a buyer for its troubled subprime mortgage lender, Option One, and has written down the company’s mortgage portfolio by another $29.2 million. The company said it expects to receive as much as $1.3 billion, the book value of the unit, but the ongoing crash of the subprime market makes that projection look too rosy. H&R Block reported this week the reduction in the residual value of the unit’s loan portfolio pushed the company’s losses for its fiscal third quarter ended Jan. 31 to $60.3 million. The company said as of Jan. 31, Option One had violated some of the minimum net income requirements in some of its short-term financing agreements, but received temporary waivers from lenders through April 27.