HSBC’s high interest tax loan partner H&R Block Inc. reported a bigger net loss during its fiscal first quarter late Thursday as the tax-preparation company was hampered by loss provisions of more than $100 million in its mortgage-services business. The company said that it had a net loss of $131.4 million, or 41 cents a share in the period vs. a $28 million loss or 8 cents a share a year earlier. First-quarter revenues were $540.8 million, compared with $615 million a year ago.
The results includes a loss provision of $102.1 million, or 19 cents a share after tax, related to estimated liabilities in H&R Block’s mortgage-services business Option One Mortgage Corp., according to the company. The provisions were announced earlier this year, it said. “Except for mortgage services, each of our business segments performed in line with expectations during this seasonally slow quarter when we normally report an operating loss,” said Mark Ernst, chief executive of H&R Block, in a statement.
When asked by Household – HSBC Watch – then known as Household Watch – H&R Block claimed they were not involved in sub-prime predatory lending. Consumer advocates claim that statement is untrue. Block was later sued and charged with racketeering in conjunction with HSBC, Household International, and H&R Block.
Deny it all they want but these two scamming companies – Block and HSBC – cannot hide from Wall Street. Here are some details about the reported loss:
Results included a loss of $61.3 million, or 19 cents per share, for loans the company had to buy back from Wall Street investors because more customers of its Option One Mortgage Corp. subprime unit are falling behind on payments. Subprime borrowers have weaker credit histories than prime borrowers, and often miss payments faster as interest rates rise or the economy slows. The mortgage loss, disclosed on August 24, was the latest setback for a company already facing regulatory and litigation problems, errors in computing its own taxes, and a loss of market share to rival Jackson Hewitt Tax Service Inc.
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