Resource Bancshares Mortgage Corp., eager to expand its fledgling subprime lending unit, is beefing up its management and pushing to expand originations to all of its wholesale offices.

The company announced last month that it would begin originating B and C loans through all six of its retail branches and three of its 11 wholesale offices.

The recently announced hiring of Larry Reed to head the subprime unit gives Resource an executive with 20 years of experience in mortgage banking. He was most recently chief executive of B First Residential, a subprime mortgage lender in the Northeast. He started B First in 1992 and sold his interest last year.

The move into subprime lending is a major diversification move for Resource, of Columbia, S.C. It is one of several traditional mortgage lenders that has begun originating loans to customers with less-than- stellar credit histories, attracted by the high profit margins.

Mr. Reed, senior vice president and director of B and C lending, said that primary focus is spreading the subprime line soon to the remaining wholesale branches . He did not specify a timetable.

Resource has been testing the waters to see if originating subprime loans was a business to emphasize, Mr. Reed said. For now Resource just has a "toe in the water," he added.

Although the company has not closed many B and C loans yet, he said it has about $8 million of loans in the pre-application pipeline.

After he sets up a management team for the unit, Mr. Reed said he will shift his attention to expanding the B and C customer base.

The management team's focus will be building the business and continuing to provide good service, he said. With B and C loan customers, maintaining a high level of service is even more important than with the more traditional A customers, Mr. Reed said.

"The closing side is more critical," he said. "These customers don't do as many loans, so each one means a lot more."

He acknowledges that being hired shows that Resource wants to be a significant player in subprime lending, but he insists it is too early to tell whether the project will take off.

"A year from now, we can have a real discussion about how the business is doing," he said.

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