H&R Block losses mounting

first_img160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! The company also said its Option One mortgage subsidiary likely would not be able to meet minimum profit levels at the end of April that are required by eight banks providing funding. H&R Block said it missed the “minimum net income” covenants for Option One on Jan. 24 but received waivers until April 27. Without further waivers, those lenders could pull the plug on further financing. “While this termination could adversely impact (Option One’s) ability to fund new loans, we believe this risk is mitigated by options available to H&R Block,” the company said in the filing. The company said it decided to review the value of Option One after continued weakness in the subprime market, which has seen a dramatic increase in the number of loan defaults in the past year. A slew of banks and firms that lend to subprime borrowers have run into trouble as rising interest rates and falling home prices have increased the number of loan delinquencies and foreclosures. KANSAS CITY – H&R Block Inc. shares dipped to a new 52-week low before recovering Wednesday after the nation’s largest tax preparer said it was boosting its third-quarter loss on subprime lending woes. Shares ended the day at $20.14, up 9 cents. Earlier Wednesday, H&R Block shares lost as much as $1.74 to $18.31, dropping below their 52-week low of $19.75. In a filing with the Securities and Exchange Commission, H&R Block said a $29.2 million pretax cut in the carrying value of its mortgage business deepened its quarterly loss by $15.5 million to $60.3 million, or 18 cents per share. H&R Block reported a third-quarter loss of $44.7 million, or 14 cents per share, on Feb. 22. last_img read more