Item 1.01. Entry into a Material Definitive Agreement

On August 1, 2007, Option One Mortgage Corporation, (“OOMC”) (a wholly-owned indirect subsidiary of H&R Block, Inc. (the “Company”)), Option One Loan Warehouse, LLC (a wholly-owned subsidiary of OOMC), Option One Mortgage Capital Corporation (a wholly-owned subsidiary of OOMC) and Option One Owner Trust 2001-2 (the “Trust”) entered into Amendment Number Nine to the Second Amended and Restated Sale and Servicing Agreement with Wells Fargo Bank N.A. (“Wells Fargo”) (the “BofA Amendment”).

The primary purpose of the BofA Amendment was to eliminate the “minimum net income” covenant in OOMC’s off-balance sheet financing arrangement with Bank of America, N.A. (“BofA”) (the “BofA Warehouse Facility”). The “minimum net income” covenant required OOMC to have a minimum net income of at least $1 based on the quarter ending October 31, 2007 and to maintain a minimum net income of at least $1 for every quarter thereafter.

The BofA Warehouse Facility provides funding totaling $2,252,000,000 through June 12, 2008, subject to various triggers, events or occurrences that could result in earlier termination and bears interest at one-month LIBOR plus additional margin rates. The BofA Warehouse Facility is subject to various OOMC performance triggers, limits and financial covenants, including a tangible net worth ratio, tangible net worth to total required capital ratio, non-warehouse leverage ratio and cross-default features in which a default under other arrangements to fund daily non-prime originations would trigger a default under the BofA Warehouse Facility. In addition, the BofA Warehouse Facility permits BofA at any time to require the Trust to redeem specified borrowed amounts outstanding under the BofA Warehouse Facility.

Under the BofA Warehouse Facility, non-prime loans originated by OOMC are sold daily to the Trust, which utilizes the BofA Warehouse Facility to purchase the loans. The Trust subsequently sells the loans directly to third-party investors or back to OOMC to pool the loans for securitization, as directed by its third-party beneficial interest holders. The decision to complete a whole loan sale or a securitization is dependent on market conditions. See “Off-Balance Sheet Financing Arrangements” in Item 7 of the Company’s Form 10-K for the fiscal year ended April 30, 2007.

Certain parties to the BofA Warehouse Facility have other relationships with the Company or its affiliates. BofA and an affiliate of Wells Fargo are lending parties pursuant to credit facilities maintained by Block Financial Corporation, as borrower, and the Company, as guarantor, with various lenders. In addition, Wells Fargo serves as the indenture trustee under other mortgage warehouse facilities maintained by OOMC or its affiliates.