Shares of H & R; Block Inc. slumped more than 10% Friday after warning of trouble at its Irvine-based Option One Mortgage Corp. mortgage unit.
Late Thursday, Kansas City-based H & R; Block said Option One is seeing more late payments and expects to take a quarterly charge of $61 million because of them.
H & R; Block is set to report results for the quarter ended July 31 next week.
Option One is one of several Orange County companies that make home loans to borrowers with imperfect credit. Others include Orange-based ACC Capital Holdings Corp., parent of Ameriquest, and Irvine’s New Century Financial Corp.
Shares of other publicly traded mortgage companies fell Friday on the H & R; Block news.
They include New Century, Newport Beach-based Downey Financial Corp. and Pasadena-based IndyMac Bancorp Inc., which has its mortgage operation in Irvine.
H & R; Block said it expects to set aside $46 million for loans sold in the quarter, and an additional $56 million for loans sold in prior quarters.
