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Mortgage MagnatesTycoons ranked by Forbes Magazine

March 16, 2005

By COCO SALAZAR

Forbes magazine’s latest ranking of the World’s Richest People has the chief executive of a mobile-home finance holding company in its number two spot, with several other mortgage-related billionaires sprinkled elsewhere on the list.

While Bill Gates’ net worth of $46.5 billion kept him crowned as the richest man on earth for the 11th time, this year the gap of wealth narrowed between him and the second-richest, Berkshire Hathaway Inc. chief executive and chairman Warren Buffett with $44 billion. The 74-year old Nebraskan has been a director of Berkshire since 1965, building it to a $133 billion holding company by applying value-investing principles in insurance, energy, carpets, jewelry, furniture, paint and apparel. Also, he has big stakes in American Express, Coca-Cola and Gillette.

In August 2003, Berkshire acquired mobile home maker Clayton Homes Inc., whose subsidiaries Vanderbilt Mortgage and Finance Inc. and 21st Mortgage Corp. recently started servicing a $4 billion manufactured home loan portfolio bought from Chase Home Finance. According to Forbes, Berkshire bought Clayton after reading the autobiography of the company’s founder.

Franklin Booth Jr., who invested $1 million to initiate Berkshire, ranked as the 366th richest man with a net worth of $1.8 billion. The great-grandson of Time Mirror Co.’s founder, he briefly worked for the LA Times‘ editorial, the Los Angeles Mirror. Booth then partnered with [now Berkshire vice chairman] Charles Munger on a small real estate deal, was introduced to Buffett in 1963, and now holds 17,700 shares worth $1.5 billion. He also owns large orange grower Otis Orchards. The Los Angeles resident is an avid fisherman, flies his own Learjet and relaxes on 4,000-acre cattle ranch, Forbes said.

Berkshire’s Munger, with a net worth of $1.7 billion, placed 387 on Forbes’ richest list. He met Buffett in 1959 and soon began investing in the holding company. While far less wealthy than partner Buffet, the self-made 80-year old billionaire “still plays integral role at Berkshire…vice chairman since 1978, demands intense number-crunching analysis of investments,” Forbes said. He has also has substantial stakes in Costco Wholesale, legal news publication Daily Journal, and real estate investment firm Price Legacy.

The 71st richest man with $6.1 billion is the cofounder of KB Homes, Eli Broad, according to Forbes. The self-made billionaire bought his first piece of real estate at age 20. He cofounded Kaufman & Broad with $25,000 and made it one of the nation’s biggest home builders, which has a mortgage financing unit as well. Broad racked up $18 million in 1998 when he sold SunAmerica, an insurance company focused on the retirement market. A big arts collector and benefactor, he recently donated $60 million to the Los Angeles County Museum of Art.

With a net worth of $3.2 billion, Charles Schwab was listed as No. 170. The 67-year old Californian reportedly opened stock market to the masses with his discount brokerage in 1971. He handed down his CEO reigns in 2003, and took them back last year after the company posted sagging profits. Dyslexic, he established Charles and Helen Schwab Foundation to help children with learning disabilities, according to Forbes. The brokerage provides mortgage financing through Schwab Bank.

In slot No. 272, was $2.3 billion banking mogul Carl Pohlad. The 89-year-old former car salesman took over his brother-in-law’s bank in 1955, turned it into several operations under the name “Marquette Financial Cos.” and sold it to Wells Fargo for $1 billion in 2001. Pohlad owns the Minnesota Twins and his family privately owns real estate investment firm NorthMarq Capital Inc., which among its services provides multifamily lending.

With a net worth close to Pohlad’s, Clemmie Spangler Jr. tied for the title of the 272nd richest man in the world. The Harvard graduate restored failing Bank of North Carolina before it merged with NCNB in 1982. It was renamed NationsBank, which is now Bank of America. Spangler holds 32 million shares worth $1.5 billion and his wife sits on the board of directors, according to the magazine.

At No. 321, with a net worth of $2 billion was Roland Arnall, the founder of Ameriquest. The 62-year old Californian started the full-service lender as Long Beach Savings & Loan in 1980. The self made billionaire has also amassed his fortune through investments in oil and gas, insurance and real estate.

Carl Lindner Jr. and his family filled spot 366 with $1.8 net worth. Lindner’s come a long way since dropping out of high school at age 14 to help run a family dairy business during the Depression. With his siblings, he opened an ice cream store in 1940 and built the 220-store United Dairy Farmers chain. He stepped into finance with small thrifts, and today, American Financial Group has big stakes in insurance, banking. The family of the Cincinnati Reds majority owner controlled banking and financial service provider Provident Financial Group, which was recently acquired by National City.

The other half of Forbes‘ list included: William Pulte, of homebuilder Pulte Homes; and the three founders of Golden West Financial, Herbert and Marion Sandler and Bernard Osher.


 

Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. email: [email protected]

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