Richest Mortgage Moguls

Forbes’ 2007 list of the World’s Richest People consisted of a record 946 billionaires, including 178 newcomers, for a combined net worth of $3.5 trillion, up $0.9 trillion from last year. Two-thirds of last year’s billionaires were richer and only 17 percent were poorer.

Among those who were poorer this year was Ameriquest founder Rolland Arnall, whose net worth of $2.5 billion occupied spot No.369 on this year’s list, down from $3.0 billion and spot No. 224 last year.

The magazine noted Ameriquest’s subprime business is facing tough times as rising interest rates and default rates are hammering profits. Arnall recently hired JPMorgan to sell Ameriquest, which last year paid $325 million to 49 states to settle predatory lending charges, and closed 230 retail offices and fired 3,800 employees 5 months later.

At No. 349 was Clemmie Spangler Jr. through his fortune of $2.6 billion, which he has partly amassed through the 32 million Bank of America shares he owns, according to Forbes. The Harvard graduate salvaged his father’s business, Bank of North Carolina, before it merged with NCNB, now BoA, in 1982.

Carl Pohlad’s net worth of $2.6 billion earned him spot No. 349, down from No. 245 last year when Forbes said he was worth $2.8 billion. The Minnesota Twins owner, formerly a used-car salesman, bought Marquette Bank in 1955 and sold it to Wells Fargo in 2001 for $1 billion. The Pohlad family privately owns NorthMarq Capital Inc., a national real estate investment banker that provides multifamily mortgage financing, among other services.

At No. 314 was Donald Trump with a net worth of $2.9 billion, which is $0.3 billion more than Forbes listed last year. But even so, Trump constantly disputes the figure, claiming, “I’m worth $6 billion,” the magazine said. The 60-year-old real estate mogul was recently granted the right to proceed with a $5 billion defamation lawsuit against a New York Times reporter who claimed in a book that Trump was worth just a few hundred million dollars. “The Donald,” who recently opened Trump Mortgage Co., became a billionaire during the 1980s and almost lost it all after the 1990 real estate crash. Now besides being a TV star, Trump gets a “generous” cut from builders who affix “Trump” to their condos.

Charles Schwab climbed up 13 spots from last year’s list to No. 155 as his $5.2 billion net worth grew by $1.2 billion in that time, according to the magazine. In 2005, Schwab switched listing of the discount brokerage he founded 36 years ago, which offers mortgage financing through Schwab Bank, from New York Stock Exchange to Nasdaq, which he believes includes companies that are more “forward-thinking.”

With a net worth of $6 billion, Eli Broad, who cofounded Kaufman & Broad with a $25,000 investment, is the world’s 119th-richest man, according to Forbes. While KB Homes sold its mortgage unit KB Home Mortgage Co. to Countrywide Financial Corp., the deal included the formation of a 50/50 joint venture through which KB continues to originate loans.

George Kaiser, who owns over 45 million shares of BOK Financial worth $2.3 billion, placed 80th on the list for his net worth of $8.5 billion.

The head of Berkshire Hathaway, Warren Buffet, again came in second on the list due to his $52 billion fortune, thereby remaining the richest individual in the mortgage-lending world. Despite donating to charity the majority of his Berkshire shares last June — worth $31 billion at the time — the 76-year old Nebraskan is $10 billion richer than last year, as Berkshire stock shot up 22 percent in the past year.

Buffet studied under value-investing guru Benjamin Graham at Columbia University and learned to hunt for undervalued stocks. Buffet bought control of textile firm Berkshire Hathaway in 1965 and added insurance underwriting for the investable float. Since then the holding company’s umbrella contains utilities and energy companies, among others, as well as mobile home manufacturer Clayton Homes Inc., parent to Vanderbilt Mortgage and Finance Inc. and 21st Mortgage Corp.

Because rankings were based on a snapshot of balance sheets taken on Feb. 9, the five executives who took Fortress Investment Group public that morning made the cut, Forbes said. Among Fortress’s companies is Nationstar Mortgage LLC, which recently acquired nonprime lender Champion Mortgage from KeyCorp.

Fortress subsidiary Newcastle Investment Corp. announced a deal to acquire $1.7 billion in subprime loans during the next month. The secondary transaction calls for Nationstar to service the loans.