Steven F. Herbert, chief financial officer of Resource Bancshares Mortgage Group, says he is astonished by the recent selloff in his company's stock.

One would expect the stock to trade lower when rising interest rates are curtailing lending volume. But the Columbia, S.C., mortgage bank's shares have dropped 50% over the last four months, to a low of $6 this week. That is 50% less than book value.

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