Fitch Issues Originator/Issuer Update Report On Option One Mortgage Corp

Business Wire, April 22, 2004

Business Editors

NEW YORK--(BUSINESS WIRE)--April 22, 2004

As part of its originator/issuer operational review program, Fitch Ratings has issued a residential subprime originator/issuer review update report on Option One Mortgage Corp. (OOMC) on April 22, 2004, available on Fitch's web site at 'www.fitchratings.com'. Fitch's review confirmed that the company has stable financial support from its parent companies, Block Financial Corporation, with a long-term debt rating of 'A', and H&R Block, Inc. Additionally, Fitch's assessment confirmed that OOMC has significant experience in wholesale production and an extensive control environment over its product sources and processes.

Headquartered in Irvine, CA, OOMC has been originating, acquiring, and servicing non-prime (subprime) residential mortgage loans for more than ten years. As of December 2003, OOMC was the fifth-largest originator of subprime mortgages in the nation, according to statistics complied by Inside B&C Lending. OOMC sources the majority of its production through its wholesale channel, augmented by correspondent bulk and retail through its wholly owned subsidiary, H&R Block Mortgage Corporation. In 2002, OOMC originated or acquired 95,506 loans with an outstanding principal balance of $13.2 billion and in 2003 originated or acquired 133,625 loans totaling $20.1 billion.

OOMC continues to effectively manage its growth in subprime production by hiring and retaining experienced staff, maintaining strong controls, and leveraging the H&R Block, Inc. brand. OOMC's strategy is to continue to gain efficiencies through technology such as automated underwriting, while proactively managing the credit quality of its originations. Fitch will continue to monitor OOMC's performance as the company pursues its growth and technology initiatives.

Fitch's originator/issuer review program was developed to obtain an in-depth understanding of originators/issuers in today's environment, to enhance transaction analysis, and to provide additional information to investors and other market participants. The review performed by the operational risk group focuses on effective lending and sourcing practices, underwriting integrity, and quality control and risk management. The evaluation includes an in-depth analysis of processes, verification of effectiveness of controls, and a targeted review of loans originated or purchased.

This extension of Fitch's detailed loan- and pool-level analysis provides a qualitative indication of risk in RMBS transactions attributable to an originator/issuer's level of risk management and disclosure. The reviews are performed in the context of the criteria set forth in the Fitch Research report 'Reviewing Residential Mortgage Originators' dated July 23, 2001 and available on the Fitch Ratings web site at 'www.fitchratings.com', along with information about other originators/issuers that Fitch has reviewed.