With its deal to buy Money Store, First Union Corp. is set to bulk up an already ample home equity lending business.

The Charlotte, N.C.-based bank has been making subprime mortgage loans for three and a half years through its First Union Home Equity Bank. Now that Money Store-one of the oldest companies in the business-is going to be under the First Union umbrella, bank executives are hoping to draw on the corporation's expertise.

"The Money Store is a fabulous company," said Chris Oddleifson, president of First Union Home Equity Bank. "They have been doing B and C underwriting for a lot longer than we have."

Money Store's 31 years of experience with subprime loans allow it to "go deeper into the risk bucket," Mr. Oddleifson said. "We have a lot to learn from them."

First Union Home Equity Bank originated about $2 billion in home equity loans in 1997 through 120 branch offices that are linked with several thousand brokers. About half that volume was B and C loans-those made to customers with tarnished credit histories.

Mr. Oddleifson said the unit is planning to increase its origination volume to $3 billion in 1998.

But Money Store, which will operate as a stand-alone unit, will provide much more than advice to First Union. This year the bank began a subprime program that lets it make loans through its 1,900 branches. The program was designed with First Union Home Equity Bank in mind as underwriter, but Money Store could play an active role, Mr. Oddleifson said.

"The Money Store acquisition will dovetail with that perfectly," he said. "We can refer loans right through." The Yes Bank program has yet to generate any sizable volume, First Union officials said.

First Union has also been beefing up its home equity securitization business. Several high-profile subprime deals last year brought notoriety to the bank's capital markets unit. Most recently, the unit worked with Freddie Mac in December to issue a $407 million securitization.

Now the unit will securitize Money Store's loans, which could mean a 500% jump in volume next year. First Union is prepared for the ramp-up, said Wes Jones, managing director of First Union's conduit programs.

"We have a very good sales and distribution force," Mr. Jones said. Stepping up volume should not be a problem, he added, noting that First Union has used Lehman Brothers as a co-manager on home equity deals.

Mr. Jones said the unit would continue to look outside of the bank's divisions for subprime loans to securitize. "We're still in the bulk market," he said, although prices in the bulk subprime sector have been high in recent months.

Last year the unit securitized more than $1 billion of home equity loans, Mr. Jones said.

"We bank a lot of people-people with pristine credit and those who have fallen on hard times," Mr. Jones said. "And we want to assist all of them."

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