H&R Block Inc. has signed a definitive agreement to sell the mortgage loan servicing business of its Option One Mortgage Corp. (OOMC) subsidiary to an entity sponsored by WL Ross & Co. LLC, a private equity firm.
According to the companies, under the purchase agreement, the buyer will acquire all of the assets and certain liabilities related to OOMC's servicing business, including the assets of OOMC's call center subsidiary in India. H&R Block previously shut down OOMC's mortgage origination activities after exiting an earlier sale agreement with Cerberus Capital Management LP in Dec. 2007.
Through the acquisition, H&R Block and OOMC are relieved from any obligation to provide servicing advances after the closing date, except that H&R Block has agreed to finance approximately $100 million of servicing advances that are presently ineligible for the servicing facility for an additional period.
Completion of the transaction is subject to the satisfaction of specified closing conditions, including obtaining a certain percentage of specified third-party consents relating to the transfer of servicing rights, the expiration of the applicable waiting period under the Hart-Scott-Rodino Act, and certain other customary closing conditions.
