Tax prep and mortgage loans don't mix

From AP-

KANSAS CITY, Mo. - Cerberus Capital Management LP and H&R Block Inc. said Tuesday they terminated their agreement for Cerberus to purchase H&R Block's mortgage subsidiary, which has now stopped accepting new mortgage applications.

H&R Block said it will lay off about 620 employees, close three offices and take a $75 million restructuring charge as it shuts down lending at Option One Mortgage Corp.

About $34 million of that charge will be incurred in the quarter ended Oct. 31, with the rest incurred in the quarter ending Jan. 31, along with about $7 million in previously disclosed restructuring.

H&R Block said it will sell its servicing business, which will result in an another asset impairment charge for the quarter ended Oct. 31 of no more than $125 million. The company hired Lazard to handle that sale.

Cerberus and H&R Block have tried in recent months to renegotiate the agreement regarding Option One, first struck in April, as the mortgage market has been rocked by subprime defaults and tightened lending.

What is H&R Block doing in the mortgage business? Please someone enlighten me. Companies, Sears for one, who get out of their main line of business often wish they didn't. H&R is our most most recent example.

Disclosure- I'm a former H&R Block Tax preparer.
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