It seems everyone had their fingers in the subprime lending debacle. It amazes me that so many other non-mortgage related companies had mortgage units that were helping to push those ridiculous loans at people.
H&R Block Inc (HRB.N) said on Tuesday the sale of its struggling subprime home lender unit, Option One Mortgage Corp, to Cerberus Capital Management LP was terminated, a move that will trigger $75 million of charges and 620 job cuts.
Block shares were down 7.5 percent to $18 in pre-market trade.
The end of the deal “is not a good thing,” said Alexander Paris, an analyst at Barrington Research in Chicago. “There’s charges and losses, but it might be making the best out of a bad situation.”
The best out of a bad situation would find mortgage companies freezing rates and even rolling some of them back to a point where people wouldn’t actually lose their homes. It sounds better than having millions of empty homes all around the country.
I wonder how many other companies, like H&R Block, will be recording mortgage related losses before the year ends.
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