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Kansas City, Mo. – H&R Block Inc.’s mortgage unit lost a $1.5 billion credit line, falling “dangerously close” to the minimum amount demanded by a hedge fund firm that has agreed to buy the money-losing home lender.
The so-called warehouse credit facility for Option One Mortgage Corp. wasn’t renewed by Lehman Brothers Holdings Inc. when it expired June 28, H&R Block said in a federal filing. That reduced the unit’s borrowing capacity to $8 billion in committed loans and $2 billion in uncommitted lines of credit.
Cerberus Capital Management LP, a New York-based hedge fund manager, demanded that Option One maintain warehouse lines of at least $8 billion when it agreed to buy the unit in April.
