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H&R Block sees added sub-prime loan loss

March 14, 2007|From Bloomberg News

H&R Block Inc. will post $29 million more in pretax losses from sub-prime mortgages than first reported last month, and the company's third-quarter regulatory filing will be delayed.

H&R Block, the nation's biggest tax-preparation company, said Feb. 22 that it had a net loss of $44.7 million in the quarter ended Jan. 31.

Since then, the Kansas City, Mo.-based company has reviewed its Option One mortgage unit because of "declines in the value of mortgage loans, including the value of nonperforming loans," according to a federal filing Tuesday.

The company put Irvine-based Option One up for sale in November, and Chief Executive Mark Ernst reaffirmed last month that he still expected to get bids of $1.3 billion or more. Some analysts, including UBS' Kelly Flynn, have said Option One may sell for as little as $600 million, or not at all, after worse-than-expected delinquencies and a drop in demand for mortgages.

H&R Block's quarterly report with the revised figures should be filed with the SEC by March 19, the company said.

Option One previously ranked among the 10 biggest U.S. issuers of sub-prime mortgages. Ernst said in February that an announcement of Option One's sale would be made by the end of this month.

H&R Block shares fell 79 cents to $20.05. The announcement about the delayed filing was made after the end of regular trading.

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