H&R Block president William Anderson said last week that he was looking to get into subprime lending in a "big way." On Wednesday he found it.

The company announced it had agreed to buy Option One Mortgage Corp. from Fleet Financial Group for $190 million.

The acquisition will "allow us to achieve scale much faster," Mr. Anderson said. He said Block was ramping up a program to make subprime mortgage loans from its 8,300 retail offices.

Option One expects to originate more than $1.5 billion in subprime mortgage loans this year-50% more than in 1996-through its affiliations with 5,000 mortgage brokers. In addition, the company has a servicing portfolio of almost $2 billion.

Option One will now provide servicing for loans originated through H&R Block offices, and will make their securitization much more cost-efficient, Mr. Anderson said.

Hilary Renz, senior vice president of Cohane Rafferty Securities, a Harrison, N.Y., investment banking firm, said Option One's servicing operation is one of the top in the industry.

The acquisition of one of the top 20 subprime mortgage originators will give H&R Block substantial muscle in the business of lending to homeowners with poor credit. "They have the potential to be a very interesting competitor," said Merrill Ross, analyst at Friedman, Billings, Ramsey in Arlington, Va.

H&R Block has no plans to change the management team of Option One, said Mr. Anderson.

"We would like to give them the opportunity to realize their potential," he said. H&R Block does not have the regulatory restraints of a bank holding company, so Option One will have more flexibility, he noted.

Option One management is "delighted" with the move, said William Davis, vice president. The company has been up for grabs since January. Analysts cited Fleet's asking price, reportedly between $250 million and $300 million, discouraged some potential buyers.

H&R Block stepped in at the right moment. Stocks of subprime lenders have fallen recently as investors have become queasy about the highly volatile business.

Block "timed the market to pick off a real value," Ms. Ross said.

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