PRINT THIS PAGE WL Ross to acquire Option One's mortgage servicing business for $1.1bn18/03/2008. Source: AltAssets. 
New York-based financial restructuring group WL Ross & Co., through its affiliate, AH Mortgage Acquisition Co., Inc., has agreed to acquire the Option One mortgage servicing business from H&R Block for approximately $1.1bn. WL Ross will pay $41m for the mortgage servicing rights, $942m plus $100m of retained receivable for the $1.1bn of advances and $65m for $85m of other servicing related assets. The advances are expected to increase to about $1.2bn and the increment will be purchased at a 3 per cent discount.
Option One currently services around $53bn of subprime mortgages. In February, WL Ross agreed to acquire $42bn of mortgage servicing rights from American Home Mortgage Investment Corp. The combined total of $95m in servicing rights would create the country's second largest subprime servicing portfolio, according to a statement.
Wilbur Ross, CEO, WL Ross, said, 'Notwithstanding the problems of the subprime lending industry, we regard mortgage servicing as an attractive business and believe that there are considerable economies of scale attached to it. We shall therefore continue to seek acquisitions of prime, Alt-A and subprime servicing.'
Last month, WL Ross agreed to invest up to $1bn in Bermuda-based financial guaranty holding company Assured Guaranty.
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