Kansas City-based H & R; Block Inc. saw an $85.5 million loss for the quarter through April, driven by its Irvine subprime mortgage unit Option One Mortgage Corp.
Troubles at Option One couldn’t overcome an 8% gain in H & R; Block revenue amid a surge in tax preparations in the quarter.
H & R; Block said Thursday it’s moving ahead with plans to sell Option One Mortgage Corp. to an arm of Cerberus Capital Management LP, a New York-based private equity firm.
The company said it expects the sale to close by October.
How much Option One is selling for is unclear. Analysts predict Cerberus won’t pay more than $800 million for the troubled operation.
Last month, Option One said it was cutting 600 jobs and combining offices.
As part of the consolidation, a Lake Forest facility is set to combine with Option One’s Irvine Spectrum headquarters by July.
