Negotions to Sell Option One Fall Through

H&R Block, the owner of the subprime home mortgage lender Option One Mortgage, announced today that the sale to Cerberus Capital Management was canceled.

H&R Block stated that Option One Mortgage will no longer accept loan applications, that it will cut 620 jobs, and will close three of the companies offices. The fall through of this deal will amount to millions of dollars in write offs by Option One Mortgage. The company expects to record a write down of as much as 125 million dollars for the third quarter of this year.

The agreement fell through because “the mortgage market today has undergone vast changes since last April, when the original Cerberus deal was signed,” said H&R Block’s chairman Richard Breeden. He also stated that they were trying to restructure the deal but could not get it to mutual satisfaction.

H&R Block is not trying to sell Option One Mortgage’s servicing business separately now that they’ve shut down their subprime mortgage generation department. They hope to get a better deal than the one with Cerberus now that the generation department is not a part of it.

To read more about H&R Block, Cerberus terminate Option One deal head on over to Reuters.