The Kansas City, Mo., tax company said it "remains in negotiations to sell its Option One Mortgage Corporation subsidiary.Though the company announced in November it would explore alternatives for its mortgage business and expected to conclude that process in March, recent events in the subprime mortgage industry have affected the process."
Indeed, the business of lending to homebuyers with poor credit histories has practically ground to a halt following a spike in defaults and delinquencies on loans made in 2005 and 2006. Mortgage companies such as
have seen their shares hammered by losses tied to loans gone bad, and Wall Street has cut off funding to lenders including New Century.
said Thursday it expects to cut subprime lending to less than a third of its mortgage business in 2007 from half last year.
Even so, H&R Block chief Mark Ernst said earlier this month that the company hoped to sell Option One for its book value of around $1.3 billion. Analysts are skeptical the company will get a number even approaching that figure.
reported Thursday that the company is cutting back at its other mortgage operation, its H&R Block Mortgage retail lending outfit.