When it comes to building market share in mortgages, Warren A. Raybould knows more than a thing or two.
Just look at what he did at Freddie Mac. When he joined the huge secondary-market concern as national sales manager in 1990, it was badly lagging behind archrival Fannie Mae in buying loans from lenders. Fannie was getting 60% of the business to Freddie's 40%. But by the time he left earlier this year, the contest was almost a dead heat.
Now Mr. Raybould is trying to work his magic at California Federal Bank, the nation's fifth-largest thrift. The unit of CalFed Inc. pulled back from lending in the early 1990s to tend to big credit-quality problems and capital woes. Armed with Mr. Raybould, it's coming back.
Mr. Raybould, who joined CalFed last April as executive vice president of residential lending, figures the thrift has grabbed 2.5% of the huge California market, up from just six-tenths of 1% at the end of last year. The goal for next year: 3%.
BankAmerica Corp. has the lion's share of the California market, with 6.5%, according to TRW Redi Property Data.
But CalFed's gains are still significant. "We have moved from getting back up to speed to being at speed," Mr. Raybould said.
Of course, some of the resurgence simply reflects the increased popularity of adjustable-rate mortgages, the product of choice for CalFed and many other big thrifts. As interest rates have risen, consumers have gravitated to adjustables because of their relatively low initial rates.
But that should not diminish the contribution of Mr. Raybould.
When Mr. Raybould rejoined CalFed, the thrift's focus was on retail loan originations, he said. But he soon changed that.
"We felt we could penetrate the market faster in wholesale," he said.
He "restructured and reorganized" two levels of management to do it. About a dozen senior managers either left the company or had their jobs changed to reflect the wholesale focus. Some new managers were brought in.
The result was much-improved wholesale originations. Although the company declines to release specific originations figures, Mr. Raybould said, "We have hit the numbers we wanted."
Observers say he may be just the person to keep CalFed's streak alive.
"He has got all the arrows in his quiver necessary to succeed in this business," said Sam Lyons, senior vice president of mortgage banking at rival Great Western Bank.
He and others said Mr. Raybould, 46, brings both solid knowledge of the industry and true sales savvy. A tall, youthful-looking man with thick dark hair, Mr. Raybould has "a real presence," says David Glenn, Freddie Mac's president.
"Warren fills the room," Mr. Glenn said.
The new job at CalFed represents a homecoming for Mr. Raybould. He had worked at CalFed right before moving east to the Reston, Va.-based Freddie Mac, formally the Federal Home Loan Mortgage Corp.
Speaking in relaxed but measured tones, Mr. Raybould said Edward G. Harshfield, CalFed's president and chief executive, hired him to restructure and reorganize the thrift's residential lending and prepare it strategically for the years to come.
"They were smart enough to know what had to be done," he said. And Mr. Raybould says he has in large measure already done it.
For 1994, Mr. Raybould was handed a mandate to improve the match of assets and liabilities while invigorating adjustable-rate loan production, get the company's asset growth on target, and expand loan funding. Mr. Raybould said CalFed has accomplished all of that.
Despite a third-quarter sale of 44 branches in the Southeast, assets will reach $14 billion at the end of this year, according to Mr. Raybould, down from $14.7 billion at the end of the second quarter. He expects assets to grow 4% to 5% next year.
Mr. Raybould is now preparing a strategic lending plan for 1995 and 1996, to be implemented in January. He said the plan will be presented to the bank's board by the end of the year.
He said the changing lending market is key to his strategic plan. CalFed plans to maximize its product distribution along multiple channels.
"The market is changing so much that you cannot rely on one market," he said.
He said CalFed will try harder to lend to different ethnic and immigrant groups. The thrift will attempt to be more cost efficient. He also said CalFed was "reviewing (its) agreements with employees to motivate them in view of the size of the market."
There was a time when industry observers thought CalFed executives would soon be shopping for locks to permanently close its doors, not planning its return to market share prominence.
In the late 1980s through 1992, CalFed was pummeled by bad real estate loans. A recapitalization in that year did little to alleviate the thrift's problems. By the summer of 1993 it was losing about $40 million per quarter and, with a core capital ratio approaching 4%, it was on the verge of regulatory sanctions and possible federal seizure.
But a drastic plan to sell off troublesome assets, raise capital, and sell marginal operations was launched to resuscitate the institution by Mr. Harshfield. It seems to have worked. CalFed reported its first profit in more than in year in the second quarter.
Mr. Raybould was largely responsible for adding some novel sales methods to CalFed's lending operation when he was last at the bank, from 1984 to 1990. He said CalFed changed to a customer focus at that time by hiring professional salespeople and making them more accessible. Among the innovations: beepers for each loan officer.
He left CalFed for the "broadening experience" at Freddie Mac. His main responsibility there was creating and servicing the agency's relationships with its client lenders.
Mr. Raybould took part in the mortgage banking industry's greatest expansion during the recent two-year refinancing boom. Freddie Mac greatly expanded its market presence during that time.
He said he left Freddie Mac because he wanted to return to the primary lending market. He also wanted to come back to California's golden weather and lifestyle. He bristles at the suggestion that he left Freddie Mac for any other reasons.
"I believe I accomplished what I set out to do at Freddie Mac," he said.
David W. Glenn, Freddie Mac's president and chief operating officer, agrees.
"I think he had an impact on the industry. I think (lenders) knew him; I think they respected him," Mr. Glenn said.
Mr. Glenn said he was especially impressed by Mr. Raybould's energy.
"When we would go to the conventions, we would have these national meetings," Mr. Glenn said. "He would run the show for 18, 20 hours nonstop. He didn't look any more tired when it ended than before it started. He would put every ounce of himself in everything he did."
Mr. Raybould plans on staying at CalFed until he finishes his task. He expects his tenure to be three to five years.
"We are definitely here to maximize shareholder value, and as long as I can play a role in that I will stay here," he said.
