John Robbins, CMB, is back for the third big go-round in his 40-year career in the mortgage business. The founder and former chief executive officer (CEO) of American Residential Mortgage (AmRes) and American Mortgage Network (AmNet) is now president and CEO of San Diego-based Bexil American Mortgage, which opened in October 2011. * Robbins, 65, thinks the timing of his third--and likely last--venture is even more auspicious than the previous two, which turned out well indeed. AmRes was sold to Chase Manhattan Bank (now JPMorgan Chase & Co., New York) in 1994, and AmNet was sold to Wachovia Bank (now part of Wells Fargo & Co., San Francisco) in 2005, just before the bottom dropped out of the housing market. * "This is a perfect time to build a new nationwide mortgage bank," says Robbins, a former chairman of the Mortgage Bankers Association (MBA). * "I have always felt real opportunity is born in the vacuum created by the bottom of a cycle. While many lenders are busy dealing with problems arising from a deep housing slump, we have the opportunity to create a nimble, efficient company not burdened with legacy loan-repurchase issues," he says. * Robbins' new company is named after its majority owner, Bexil Corporation, a publicly traded holding company that focuses on investment management and mortgage banking. But it will be run by the Robbins Group, a team of executives that has been with Robbins for decades.
The group includes jay M. Fuller, executive vice president and head of national production; David Wallace, executive vice president and chief financial officer (CFO); Lisa S. Faulk, executive vice president of national operations and fulfillment; and Anna Martinez, executive vice president who is responsible for technology, secondary marketing and correspondent relationships.
The board is made up of Robbins; Bexil Corporation President and CEO Thomas Winmill; and Alex B. Rozek, managing member of Boulderado Group LLC, a Boston-based investment partnership and Bexil investor.
The money-raising process
According to Wallace, who had been senior vice president and controller at AmNet before becoming CFO, he and Robbins began looking for investors in a new company in 2009, but the money-raising process "took longer than either of us anticipated."
They pitched the idea of the new company as a pure startup, with no mortgage industry legacy issues, but that proved to be a tough sell.
"We had no investment banker working for us," Wallace recounts.
"We went to private-equity people John knew. But they couldn't get past the startup risk. They had significant, legitimate worries about a startup being able to get warehouse lines of credit. Private-equity firms have strict rules against financing a startup."
So the two shifted gears. Instead, Wallace says, "We looked at buying an existing platform, because they would have existing warehouse lines in place." But prospective investors had worries about repurchase liability from legacy mortgages. That idea, too, was abandoned.
Enter Bexil, which wanted to get into the mortgage business and was more comfortable with a startup with no legacy issues.
"After examining a number of opportunities in the existing mortgage business, we concluded that loan-repurchase liabilities were difficult, if not impossible, to quantify," Rozek says. "We opted to build a mortgage business from scratch, because this was the only way to be loo percent certain there is no exposure to...