Robbins' family reunion: John Robbins was a leader in the mortgage business long before he took the chairman's post for the Mortgage Bankers Association. His successful career has been noted for many things, but the loyalty of his senior management team is perhaps the most telling

Mortgage Banking, Oct, 2006 by Janet Reilley Hewitt

Legally, with board approval in hand, the company could have gone ahead with the plan. But Robbins says, "We went back to the shareholders feeling that it was only right, because they really had invested in a real estate investment trust with the idea that [their] money was going to be earning dividends."

Here's where it gets painful. Robbins decided to personally call every shareholder who owned 2,000 shares or more.

When the REIT first went public, shares sold at $15. At the time he was making these calls, shares were trading for between $4 and $6. Needless to say, the calls were not that easy to make.

Robbins says, "I'd get a hold of somebody on a weekend, and they'd go, 'Who are you?' And I'd explain, and then the next thing out of their mouth was, 'Is this really you?' And I'd say, 'You know, I'm not some paid actor.'"

Some would say, "'Well, Mr. Robbins, you haven't done a great job with my money, and what makes you think that this new idea is going to produce any better results than the old idea?'"

Robbins eventually won just enough votes to hit the 66 2/3 percent mark. But the margin of victory was so slim, it hinged on the vote cast by one shareholder who invested his life savings in the stock. This shareholder ended up changing his vote and supporting Robbins at the final moment during the special shareholder meeting. Robbins, in his reasoned and persuasive way, was able to explain to an average investor why REITs were not right for the mortgage banking landscape at the time.

Back in wholesale

Once the vote was approved in 2002, the stage was set for Robbins to build yet another mortgage company. This one would be wholesale-only and sell all its servicing. The timing was perfect for AmNet to ride the incredible housing boom that is only now ending.

As Robbins assembled his team to build the new wholesale lending company, 11 of his key staff from the old American Residential moved over to join him. It was like old times.

But when that boom market began to normalize in 2004, Robbins did what he does best: He took stock of where the business was headed.

Eventually, that introspection prompted him to look for a buyer for his successful new company. He was originating billions in home loans, but he was selling them as a correspondent to much larger players.

Robbins started paying attention to the rankings of top wholesalers. AmNet was sitting at around No. 16 or 17. Robbins began studying the companies above his on the list. He thought about the advantages they had and where the market was going.

He had seen this stage in the cycle before. Price wars would bring a "cleansing of the hives," Robbins says, and only the most efficient would survive.

But this time around, he didn't see the opening that would give a medium-size player a profitable place at the table. He says, "We have today what I think of as the greatest disparity [ever] between the small and medium-size mortgage bank, and the very large mortgage banks."

In other words, the big guys (or those owned by the big guys) would be the dominant players in the market ahead.