Wilbur Ross is purchasing H&R Block's Option One mortgage servicing unit for $1.1 billion. The platform currently services about $53 billion in subprime mortgages. WL Ross is paying $41 million for the mortgage servicing rights, $942 million plus $100 million of retained receivable for the $1.1 billion of advances and $65 million for $85 million of other servicing related assets. The advances are expected to increase to about $1.2 billion and the increment will be purchased at a 3% discount as well. Ross said he will continue to acquire prime, Alt-A and subprime servicing, as he sees value in the industry despite the current turmoil. Previously, Ross agreed to acquire $42 billion of mortgage servicing rights from American Home Mortgage Investment Corp. The combination of the two platforms would total $95 billion and would create the country's second largest subprime servicing portfolio, after Countrywide Financial. Ross also said he would offer comparable positions to a number of the employees of Option One's servicing business, which is based Irvine, Jacksonville, Las Vegas and Pune, India. The deal is expected to close by May 30.

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