For Douglas K. Freeman, the prospect of being chief executive of a publicly traded company in his hometown was enough to lure him out of early retirement.

Certainly the new post will not give him much time to relax. Turning around Resource Bancshares Mortgage Group, Columbia, S.C., could well be the toughest job of the former Bank of America Corp. executive's career.

Mr. Freeman, 49, takes over a company that is treading water in a treacherous market. Amid rising interest rates and falling loan volume, Resources' stock has plunged almost 80% in 17 months, to $4.625 at the close of trading Friday. The company's $9.1 billion of loan production in the first 11 months of last year was off 39% from the same period a year earlier. And in December, Resource laid off 18% of its staff.

"We have to, in the short term, build back investor confidence that we are a company that can create products that can get better returns for our investors," Mr. Freeman said last week. "In the process of gaining back investor confidence, we will also get the confidence of our customers."

Boyd M. Guttery, the recently elected chairman of Resource's board, said that though he realized when interviewing Mr. Freeman that they had met early in their careers, the hiring was not just an old-boy-network deal.

Mr. Freeman brings high-level management experience and a record of creativity and innovations, Mr. Guttery said. "He loves to think and loves to be active. That's what we were looking for."

Mr. Freeman's career began with the old Citizens & Southern banking system and included executive positions with Wells Fargo & Co. and Barnett Banks Inc. He announced in the fall that he would retire at yearend from Bank of America Corp., of whose consumer finance group he was president. But retirement turned out to be little more than a plane flight to South Carolina.

Mr. Freeman said Resource has the infrastructure to transform its fortunes. Its current focus is on providing a commodity, with little service - a "hollow strategy" for the long run, he said. The trick, he said, will be to turn the company into a full-service operation.

Mr. Freeman said he plans develop a more robust product line - possibly including more subprime mortgages and loans too large for sale to the government-sponsored enterprises.

He also said Resource would try to distinguish itself through better, personalized service. He said he wants to transform Resource from a Wal-Mart kind of operation to something more like Nordstrom's.

That may be a good plan, said Mike McMahon, an analyst at Sandler O'Neill & Partners. Resource's emphasis on mortgage originations rather than servicing leaves it particularly vulnerable in times of rising interest rates and declining volume, Mr. McMahon said.

Such companies have fared especially poorly lately. Though most mortgage banks have suffered, companies that service loans in addition to originating them have been able to offset some of the loss of volume with gains in the value of their servicing portfolios.

Some more diversified mortgage players have turned to counter-cyclical products such as home equity lines and loans to offset the decline in the first-mortgage origination market.

Mr. McMahon maintains a "buy" rating on Resource's stock. He said that as long as the company continues to buy back its stock at half the book value of about $10.50, he will remain positive.

Mr. Freeman acknowledged that the industry faces lean times, but he argued that the mortgage market remains cyclical and will eventually recover.

"This is the fifth time I've seen this in my 30 years in the business," he said. "The weak will fall by the wayside, but the industry will also come up with more products to meet customers needs. Those who emerge will emerge stronger."

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