A tiny thrift in Southern Florida is making a big play for subprime loans.

Oceanmark Bank in North Miami has set up a wholesale network to capture business from so-called B and C borrowers - people who have experienced credit difficulties.

The $50 million-asset bank is doing more than $100 million of these loans a year, executives said.

And Burton Horowitz, sales manager, said Oceanmark is gearing up for expansion - partly through a foray into California.

The savings bank is preparing to open two offices in the state, one in the southern part and one in the north.

Mr. Horowitz said he is not worried about the abundance of lenders there. California is at the start of an economic upswing that will mean room for many mortgage banks, he said.

The subprime market, with bigger risks but higher rates, is "the business we feel is the best and most profitable," he said.

Oceanmark, with 10 years in the business, is experienced at handling the risks, so it can work even with some of the worst cases, Mr. Horowitz said. The bank's "extremely liberal" program lets even customers with many delinquencies qualify for loans, he said.

Small but savvy companies like Oceanmark are the backbone of the subprime lending industry, said Jennifer E. Schneider, vice president in the mortgage unit at Duff & Phelps Credit Rating Co., New York.

Big operations with B and C departments play only a small part, Ms. Schneider said. Most subprime lenders are smaller, focused companies - which are likelier to hang in when less serious players fall by the wayside, she said.

"If you're really focused on the B and C arena, you'll be more successful than if you just dabble."

Underwriting B and C loans relies heavily on evaluating the property available as collateral. As a result, Ms. Schneider said, lenders must pay close attention to appraisals.

She recommended putting an appraiser on staff, rather than relying on independent appraisers.

The detailed standards available for underwriting conventional loans often don't apply to B and C loans, she noted. Therefore, she said, lenders should have separate underwriting forces, trained to be more flexible, for the subprime market.

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