Register staff writer Mary Ann Milbourn reports:
Option One Mortgage Corp. in Irvine got an additional $350 million in financing available to fund servicing advances through lender Greenwich Capital Financial Products Inc., according to an SEC filing by parent company H&R Block Inc.
The amended agreement, signed Nov. 16, gives Option One access to $750 million to fund servicing advances, up from $400 million before.
At the same time, Option One ended its $750 million warehouse facility with Greenwich. The facility was used to fund mortgage originations, but with the the drop in loan applications, Option One said it no longer was needed.
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Option One is one of many mortgage companies hit by the subprime mortgage meltdown this year. H&R Block sought to sell the mortgage unit to private equity firm Cerberus Capital Management, but the deal faces uncertainty due to the major losses at Option One.
Have you ever heard the saying “Robbing Peter to pay Paul”…it’s a common saying in the subprime industry.