H&R Block

Option One Eliminates 100 Percent Mortgages in Subprime, Alt-A; Not Alone 

Irvine, Calif.-based subprime lender Option One Mortgage will no longer fund 100 percent loans, reflecting a broader change in the subprime market towards stricter underwriting standards. Housing Wire obtained a copy of a letter from Option One president Steve Nadon, sent to brokers yesterday, which said the company will no longer accept loan submissions for loans above 95 percent combined loan-to-value (CLTV). Option One officials confirmed the move to HW on Thursday afternoon, noting its decision applies to both subprime and Alt-A loan programs and that it expects no layoffs as a result of the changes. The lender, affiliated with tax services provider H&R Block (NYSE:HRB), has been on the auction block for some time, with company officials stating in a recent earnings call that they expect to announce a deal to sell the subprime mortgage operation sometime before the end of March.