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H&R Seeks Buyer for Mortgage Unit

July 23, 1999|Edmund Sanders

H&R Block Inc. says it is looking to sell its Irvine-based wholesale mortgage unit, Option One, in an effort to focus on its retail businesses. Option One, founded in 1992, specializes in mortgages to customers with bad credit, originating about $3.6 billion in loans in the last year. That makes the company--which employs 1,500 people nationwide--slightly larger than Orange-based rival Long Beach Financial Corp., which recently agreed to sell itself for $350 million to Seattle-based Washington Mutual Inc. Kansas City, Mo.-based H&R Block bought Option One in 1997 from a unit of Fleet Bank as part of a diversification into non-tax businesses. Now company officials say they want to sell all or part of the Irvine unit and use the money to expand into other retail businesses. H&R Block has retained Friedman, Billings, Ramsey & Co. to help find potential buyers or joint venture partners. Option One reported annual revenue of about $222 million and a pretax profit of $75 million for the fiscal year ended April 30. The company has 25 offices nationwide.

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