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                                                                   EXHIBIT 10.39

                     TERM SHEET FOR RBMG/SHELTON SETTLEMENT

         This Term Sheet is provided in furtherance of settlement negotiations
between attorneys for RBMG and attorneys for Shelton and pursuant to an
agreement among the attorneys that neither the Term Sheet nor any of the
discussions relating to it shall be admissible in any proceeding or used for any
purpose other than in settlement negotiations, except any proceeding to enforce
the terms of the settlement. When signed by both parties, this Term Sheet will
be binding on the parties and constitute the terms and conditions of a
comprehensive settlement between RBMG and Shelton, to be superseded by
definitive agreements and instruments not inconsistent herewith (the "Definitive
Documents").

A.       Nonfinancial Terms

         1.       Agreed Termination Date. Shelton will remain on paid
                  administrative leave until January 31, 1997 (the "Agreed
                  Termination Date"), whereupon his employment by RBMG will
                  terminate. His resignation from RBMG's Board of Directors and
                  as an officer will become effective upon execution and
                  delivery of this Term Sheet.

         2.       RBMG's Terms. Shelton agrees to the nonfinancial terms
                  requested by RBMG throughout these settlement negotiations:
                  (1) resignation and mutual rescission of Shelton's Employment
                  Agreement; (2) release of any and all accrued claims against
                  RBMG, its affiliated companies ("Affiliates") and their
                  officers, directors, employees, attorneys, other
                  representatives and their spouses ("Associates") through the
                  Agreed Termination Date; (3) release of all claims for
                  attorney's fees; (4) indemnification of RBMG, and of its
                  Affiliates and Associates, if Shelton breaches the Term Sheet
                  or the Definitive Documents and institutes proceedings on any
                  released claim; (5) confidentiality; (6) nondisparagement of
                  RBMG and of its Affiliates and Associates; (7)
                  non-solicitation of employees; (8) waiver of future
                  employment; (9) non-assistance of others with claims,
                  administrative charges or causes of action against RBMG and
                  its Affiliates and Associates accrued to date, except under
                  compulsion of law; (10) acknowledgement of no assignment of
                  claims; and (11) release of all claims (including loss of
                  consortium) by Connie Shelton. Shelton will not discuss RBMG,
                  its Affiliates or its Associates with FHLMC, FNMA, GNMA, FHA
                  or VA, except under compulsion of law. RBMG agrees to
                  reciprocal terms in favor of Shelton and Connie Shelton and
                  their attorneys with respect to fees and expenses billed to
                  RBMG and asserted conflicts of interest. Shelton will
                  indemnify RBMG and its Affiliates and Associates for any loss
                  caused by Connie Shelton's failure to release such claims.
                  RBMG will obtain an enforceable covenant by each of RBMG's
                  directors not to disparage Shelton or Connie Shelton or their
                  attorneys with respect to the services that they performed in
                  connection with this settlement and the underlying dispute.
                  For the purposes hereof, the "attorneys" of Shelton and Connie
                  Shelton include Stephen G. Morrison, James C. Gray, Claude S.
                  Scarborough, David E. Dukes, Kenneth E. Young, Patrick
                  Daugherty and Nelson Mullins Riley & Scarborough, L.L.P.;
                  Gaston H. Gage, James Y. Preston, William P. Farthing, Jr.,
                  Jonathan M. Crotty and Parker, Poe, Adams & Bernstein, L.L.P.;
                  Michael F. Pezzulli and Pezzulli & Associates; Professor
                  Dennis R. Nolan; John F. Olson and John H. Sturc and Gibson,
                  Dunn & Crutcher, LLP; Allen W. Groves and Glass, McCullough,
                  Sherrill & Harrold; and George Hunter McMaster and Tompkins
                  and McMaster; together with each past or present partner,


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                  shareholder or employee of every such law firm who at any time
                  provided legal services, or assisted in the provision of legal
                  services, to Shelton or Connie Shelton.

         3.       Coordinated Announcements. On the Agreed Termination Date,
                  RBMG will make a press release announcing Shelton's
                  resignation to pursue other opportunities. Sebastian will be
                  quoted as complimenting Shelton for his vital participation in
                  growing the Company from its infancy through an initial public
                  offering and secondary stock offering -- both highly
                  successful -- to its present position as one of the top 10
                  mortgage companies in the country. Sebastian also will be
                  quoted as saying that he and the Board of Directors are deeply
                  appreciative of Lee Shelton's significant contributions and
                  that they wish him the very best in his future endeavors. All
                  other similar announcements or statements made to RBMG
                  employees, financiers, regulators and others will be
                  consistent with the foregoing. Without limiting the generality
                  of the foregoing and notwithstanding any other provision of
                  this Term Sheet, at no time will RBMG state or imply to anyone
                  that Shelton had any undischarged responsibility (legal or
                  otherwise) at or in connection with Intercounty Mortgage.
                  Sebastian will provide Shelton with a signed letter of
                  reference in the form of Exhibit A to this Term Sheet.

         4.       Miscellaneous. RBMG represents and warrants to Shelton that
                  this Term Sheet is a legal, valid and binding obligation of
                  RBMG, enforceable against RBMG in accordance with its terms.
                  Shelton represents and warrants to RBMG that this Term Sheet
                  is a legal, valid and binding obligation of Shelton,
                  enforceable against Shelton in accordance with its terms. In
                  connection with the amendments to the terms and conditions of
                  Shelton's options and restricted stock effected pursuant to
                  paragraphs B.2 and B.3 below as partial consideration for
                  Shelton's agreements in this Term Sheet, RBMG represents and
                  warrants to Shelton that (i) there presently exists no
                  material nonpublic information concerning RBMG or the market
                  for its stock (other than (a) the information included in this
                  Term Sheet and (b) RBMG's financial results for 1996) and
                  that, (ii) without limiting the generality of the foregoing,
                  RBMG presently knows of no material nonpublic information
                  concerning Intercounty Mortgage. RBMG will obtain Johnson's
                  consent to the settlement with Shelton as contemplated by
                  Section 17 of Shelton's Employment Agreement. All of the
                  parties' agreements and understandings will be merged into the
                  Definitive Documents, which, like this Term Sheet, will be
                  governed by and construed in accordance with South Carolina
                  law. RBMG's obligations under this Term Sheet and the
                  Definitive Documents will be binding on RBMG or any surviving
                  entity in the event of any acquisition or merger, including
                  any acquisition by asset purchase. This Term Sheet may be
                  executed in counterparts.

B.       Financial Terms

         1.       Salary and Bonuses. RBMG will pay Shelton $5 million (less
                  income tax withholdings) in settlement of amounts owed to him
                  under his Employment Agreement. On the effective date of the
                  Definitive Documents (or, if earlier, on the Agreed
                  Termination Date), such amount will be wired to: Northern
                  Trust Co., Chicago, ABA# 071000152, Credit J.C. Bradford,
                  Account # 798630, Re: 116-48206-1-3.



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         2.       Options. Set forth on Exhibit B to this Term Sheet are the
                  number of vested options on RBMG stock, the number of unvested
                  options on such stock and the exercise price, as adjusted, of
                  such options, in each case owned of record by Shelton on the
                  date hereof. Shelton will become 100% vested in his options
                  pursuant to the schedule in the Stock Option Agreement. RBMG
                  will cooperate with a stock broker of Shelton's choice to
                  enable Shelton, at his expense, to effect "cashless exercises"
                  of his vested options and such options will remain exercisable
                  for the remainder of their original ten-year term and be
                  subject to adjustment for future stock dividends
                  notwithstanding Shelton's earlier termination from employment.
                  At its own expense, RBMG will register the exercise of such
                  options, and the resale of the underlying common stock, on
                  Form S-8. RBMG will file such registration statement with the
                  SEC not later than March 31, 1997, and such registration will
                  remain in effect until registration is no longer required to
                  permit an unrestricted resale. At Shelton's request, RBMG will
                  agree to customary indemnification and cross-indemnification
                  terms and conditions in connection with such registration.
                  RBMG will allow Shelton to transfer some or all of his options
                  to members of his immediate family (wife and children) for
                  estate planning purposes to the extent permitted by General
                  Instruction A(1)(a) to Form S-8.

         3.       Restricted Stock. Set forth on Exhibit B to this Term Sheet is
                  the number of shares of restricted stock in RBMG owned of
                  record by Shelton on the date hereof. Shelton will be 100%
                  vested in his restricted stock upon execution and delivery of
                  the Definitive Documents. Such stock will be subject to
                  adjustment for future stock dividends. At its own expense,
                  RBMG will register such stock for resale on Form S-8. RBMG
                  will file such registration statement with the SEC not later
                  than March 31, 1997, and such registration will remain in
                  effect until registration is no longer required to permit an
                  unrestricted resale. At Shelton's request, RBMG will agree to
                  customary indemnification and cross-indemnification terms and
                  conditions in connection with such registration.

         4.       Rabbi Trust. RBMG will promptly process (and not deny)
                  Shelton's claim for benefits under his Deferred Compensation
                  Rabbi Trust so as to assure payment to him of such benefits at
                  the earliest possible date.

         5.       401(k) Plan/Phantom 401(k) Plan. Shelton has elected to
                  participate in RBMG's 401(k) plan in 1997, but will not accrue
                  or be eligible for any bonus in 1997 or thereafter. The
                  remainder of his 1997 contribution will be paid by Shelton
                  from his 1996 bonus, as in past years. All 401(k) plan and
                  phantom 401(k) plan benefits will be paid out to Shelton in
                  accordance with the governing plan documents.

         6.       Benefit Plans. RBMG will allow Shelton and his family to
                  participate in any and all employee benefit plans (including,
                  without limitation, health insurance plans) through the Agreed
                  Termination Date. Shelton will have COBRA rights thereafter.

         7.       Life and Disability Insurance. RBMG will continue to pay all
                  premiums due through the Agreed Termination Date on the life
                  and disability insurance policies currently in effect for
                  Shelton.




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         8.       Legal Fees. RBMG will not pay Shelton's lawyers any of their
                  fees and expenses, whether or not they have heretofore
                  submitted invoices. Shelton will pay his own legal fees and
                  expenses.

         9.       Pension Plan/Pension Restoration Plan. RBMG will consider
                  Shelton an employee for "plan" purposes through the Agreed
                  Termination Date. RBMG will provide Shelton with a written pro
                  forma analysis of the benefits payable to him under his
                  pension and pension restoration plans (assuming retirement at
                  either age 55 or age 65), as well as a written description of
                  the alternatives available to him under such plans.

         10.      Documents; Personal Property. Promptly following the Agreed
                  Termination Date, Shelton shall return to RBMG all documents
                  (including all copies) relating to his employment (as
                  employee, officer and director) with RBMG other than (i)
                  documents relating to this settlement and the underlying
                  dispute and (ii) documents that are Shelton's personal
                  property. Promptly following the Agreed Termination Date, RBMG
                  shall return to Shelton all of his personal property.

                                AGREED ON AND AS OF JANUARY 24, 1997:



                                --------------------------------------------
                                Lee E. Shelton



                                RESOURCE BANCSHARES MORTGAGE GROUP, INC.



                                By:
                                    ----------------------------------------
                                         Edward J. Sebastian
                                         Chief Executive Officer


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               EXHIBIT A TO TERM SHEET FOR RBMG/SHELTON SETTLEMENT

                                [RBMG LETTERHEAD]

                                January 31, 1997


Dear Lee:

The Board, all the RBMG employees, and I would like to extend our very best
wishes to you, Connie and Garrett. We have accomplished some rather remarkable
things together, both at RBMG and Bankers Mortgage, and we are confident of your
continued success. Since 1991, RBMG has completed an initial public offering and
a secondary offering -- both highly successful -- and has risen to become one of
the top ten mortgage companies in the country. A lot has been accomplished, and
we are deeply appreciative of your significant contributions. Thanks again for
all that you have done.

                                                        Sincerely,

                                                     /s/ Ed Sebastian



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               EXHIBIT B TO TERM SHEET FOR RBMG/SHELTON SETTLEMENT


1.       Shelton's options on RBMG common stock:

         a.       No. vested:  257,517

         b.       No. unvested:  171,678

         c.       Adjusted exercise price:  $6.12/share

2.       No. shares of restricted RBMG common stock:  43,286