Contifinancial Corp. is forming a retail unit to supplement its recent string of acquisitions.

Contidirect, Hatboro, Pa., will make loans directly to consumers and through brokers. The start-up is an attempt to increase Conti's retail originations until they compose half of the company's overall loan production. Many subprime lenders have beefed up retail production in the past year. These loans tend to prepay less often, and usually are more profitable than wholesale loans.

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