Consolidation at Option One

Even as H&R; Block continues its effort to sell Option One Mortgage Corp. in Irvine, the tax advisor says it is consolidating the subsidiary’s retail operations in Burlington, Mass.

The reorganization will combine Option One’s specialty of targeting borrowers with bad credit with the traditional loan business of Assurance Mortgage Corp. of America, which H&R; Block acquired a year ago.

The combined retail operations, to be renamed H&R; Block Mortgage, will open offices inside H&R; Block financial centers nationwide, said Pat Rank, head of retail operations for Option One.

Although the new unit will be based at Assurance’s headquarters in Burlington, it will function as a subsidiary of Option One, he said.

Because Option One had only a small retail presence in Irvine--the bulk of the company’s work here is primarily as a wholesale lender--no jobs will be affected by the reorganization, Rank said.

It was undecided whether the new retail unit would be sold along with Option One when, or if, a buyer is found.

H&R; Block hired investment advisors last year to sell Option One, saying it wanted to focus on other retail businesses.

Option One originates about $5 billion in loans a year and reported a pretax profit of $43 million during the six months ended Oct. 31. The company employs 1,700 nationwide, including about 750 in Irvine.

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Edmund Sanders covers financial institutions and fraud for The Times. He can be reached at (714) 966-5811 and at edmund.sanders@latimes.com.