Sub Prime Mortages put H&R Block in Hole
HSBC’s high interest tax loan partner H&R Block Inc. lost $156.5 million during its second quarter, nearly twice its loss from a year ago, primarily because of weaker results in its mortgage business.
The Kansas City-based company said it continues to weigh a sale or spinoff of its Option One Mortgage business, which makes home loans to borrowers with lower credit ratings. Option One lost $39 million, before taxes, in Block’s recent quarter after having earned $48.8 million in the same period a year earlier.
“The issue for us in the second quarter was ongoing weakness in the mortgage industry,” Block chief executive Mark Ernst said in the company’s announcement.
Consumer advocates at Household - HSBC Watch asked Block’s spokesperson about sub prime lending. In 2001 Block denied having a sub prime mortgage business. Or was the term ‘predatory lending’? At any rate HSBC is ready to ride in as a white knight, helping Block with high interest refund anticipation loans which got both companies sued. At one time Block and HSBC were charged with racketeering, influence, and corruption under RICO laws designed for organized crime.
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