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A born independent.

Herb Tasker should have been born in Independence, Missouri. But he wasn't. And he isn't running for President of the United States either. But he is the incoming president of the Mortgage Bankers Association of America.

It was November 1981. He had returned early from a vacation in Montana for a hastily scheduled business meeting. The senior partners in Mason-McDuffie Co., a northern California, real estate conglomerate dating back to 1877, had summoned all 44 partners together at an exclusive San Francisco club. They were all aware the company was for sale.

Herb Tasker's then boss turned to him as they were walking toward the meeting room, and said, "'You know, if Weyerhaeuser is the high bidder for the company, they only want to buy the |servicing~ portfolio. You won't have a job.' That's all he said," Tasker recalls. Back then, Tasker, the regional manager handpicked to establish Mason-McDuffie's presence in southern California, had been a partner in the company since 1970. To hear this news just minutes before the vote was taken did not sit that well with him.

As it turned out, Weyerhaeuser did buy the servicing portfolio and left all the rest of the residential mortgage division behind--leaving 59 branches and all the residential production employees wondering about their next jobs.

It was a perfect example of top-down, power management. Perhaps because of lessons like that, Tasker is anything but that type of manager today. He has a streak of stubborn corporate independence in him a mile wide that leaves him with few kind words for the typical hierarchical decisionmaking of corporate America.

Tasker, determined not to lose his team, set about negotiating the formation of Mason-McDuffie Mortgage Corporation (or "Mason-McDuffie 2"). A group of junior partners under Tasker's leadership were bought out by the senior partners. Pooling their new-found wealth they formed a joint venture with the second highest bidder for the portfolio--Twin City Federal Savings in Minneapolis--and created an employee-owned mortgage company.

So, by February 1982, the residential division was officially incorporated with Tasker as president, CEO and chairman of the board. The branch network was trimmed back to 22. The portfolio, which had 400 loans in the first month of operations, had 1,200 by the next month, setting a growth pattern that would continue. But just as things were starting to take off, more corporate complications started to come in view.

Tasker recalls that in April 1982, just two short months after getting the company going, "the individual we put the deal together with--a lawyer and head of real estate for Twin Cities Federal--quit. So that left me with no real contact in Minneapolis."

Tasker flew back to Minneapolis to meet with the chairman of the thrift and attend a board meeting. He says, "I looked around the table at the board. There must have been 25 people there. The average age was 71. When I started talking about the terms of our agreement with Twin Cities Federal, I could see that nobody understood what I was talking about."

The long and short of it was Tasker knew right then the relationship was not going to work. But decisiveness is one of Tasker's key traits if you talk to business intimates of the mortgage banker. That decisiveness led Tasker to go to First Bank in Minneapolis in June 1982 to see about getting a loan to buy out the ownership stake held by Twin Cities. By late June, Tasker had succeeded in rounding up the money to buy the company back outright.

Today, Tasker ranks the decision to buy the fledgling company back from Twin Cities as one of the more difficult ones he's had to make in his career. The reason he says it was so tough: "because I knew when I went back to Minneapolis I didn't have enough money to meet the price that I thought he was going to ask. That was an interesting challenge."

But the decision proved right on the money, as the California real estate market powered the growth of the little company that had branches but no servicing. The branches the company did have were in some strong jumbo loan markets, and on top of that, this was the time when the California real estate market was growing like gangbusters. If you ask senior mortgage bankers familiar with Tasker's career what some of his successes have been, they quickly point to "that company." Manuel Mendel, former CEO of AmSouth Mortgage Company, Inc., and somewhat of a mentor to Tasker, says that Herb and his management team took the portfolio "from ground zero and grew it to about $1 billion |in servicing~ in a couple of years, in what started out to be a bad market."

Tasker still has the dollar figures and dates at his fingertips. "Inside of two years and two months--starting from ground zero, we built the portfolio back up to $1.2 billion." Furthermore, they did it on their own and not for the stockholders of a corporation or some outside monied interests. Because by July 1, 1982, the former Mason-McDuffie mortgage banking crew had become outright owners of "Mason-McDuffie" 2, with their personal net worths securing the debt. All their success (or failure) would directly affect their wallets.

This brings us to a key tenet of Tasker's management philosophy--you give as many of your people a piece of the action as you can, so they have a real stake in the quality and success of the operation and you can share the wealth when it's a job well done.

One of those employee/owners and a 19-year, close business partner of Tasker's is Suzanne Samson, executive vice president of All Pacific Mortgage Company. All Pacific is Tasker's current company, where he is chairman of the board and CEO. Samson, one of the original junior partners in the old Mason-McDuffie partnership, recalls the attitude in the industry toward the new company when it was just starting out. "We would go to MBA |conferences~ and people were really rooting for us. We were David in a world of Goliaths. We had a lot of goodwill behind us."

Another key employee from the old partnership was Bill Godfrey, now an owner and senior vice president in charge of secondary marketing for All Pacific Mortgage Company. Godfrey was to play a key role with Tasker in the next chapter going forward in Tasker's career-long attempt to steer clear of outside ownership.

Weyerhaueser, seeing the success of the production operation under the old Mason-McDuffie production crew, came back again and this time made a very attractive offer for the whole company. Tasker recalls the price with some pride even though both he and Godfrey were the sole votes against the buyout. But there was a price that Tasker would have to pay too. His independence as an owner was gone.

He is very candid when he recalls what life under a large corporate parent was like: "My goal always was to own part of what I'm doing. I didn't want to take it public and answer to stockholders. We worked |for~ four years for Weyerhaeuser and lived in corporate America and that was not a happy time."

Tasker notes that the primary business goals of mortgage banking don't mesh well with other businesses, where the operating goals are more short-term and the shareholder is king. He recalls how this made his job as executive vice president of Weyerhaeuser Mortgage Company, Woodland Hills, California, from 1984 to 1988 a difficult assignment. "George Weyerhaeuser, who is a terrific guy, used to say to me: 'Herb, you and I don't really agree with how we run the business. I know you want to build servicing and I want to sell servicing and to offset things that are happening in the paper and lumber business.' So they were forever selling the best of the mortgage company to keep the other things going. They were making short-term decisions, where I was on a long-term track of building a mortgage company."

The Weyerhaeuser years for Tasker ended in 1988. The terms of the deal to buy Mason-McDuffie included an earn-out clause that stretched over three years and a non-compete clause that went for four years and, characteristically, Tasker met his end of the bargain. But once his obligation had been honored, he was decisive. On a Tuesday night, two days before the expiration of the non-compete clause, Tasker decided to quit. The next morning, he had 1,900 people reporting to him and in the afternoon he was out of a job.

The next fourteen months were spent investigating "different possibilities for going back into the business." Looking back, he calls this period a "sabbatical." Others not quite so hooked on the business might have taken their own personal assets and simply managed them. But as his business friend Manuel Mender noted, Tasker's decision to buy and run a brand new company was not surprising if you know Herb. "He came back in because he likes the business, it's as much a hobby or a toy as anything to him. Herb is doing this because Herb likes to do this--it's an extension of his personality."

Thinking back on this period, Tasker says, "Quitting Weyerhaeuser was a tough decision." Equally tough was "Deciding to go back into the business in 1989, versus retiring and staying home. There have been a lot of times when I thought I should have stayed home."

Part of those feelings no doubt stem from the fact that the world of mortgage banking has changed a lot from the early days of Mason-McDuffie when there was capital to be had to build a business, and the price you could get for servicing was rich. Not only has the industry itself changed, but the entire U.S. economy has been in a serious and stubborn recession for a good while now. What's more, interest rates have become more volatile, depreciation is no longer an isolated phenomenon, and California's economy is no longer healthy. This makes the normal diceyness of being a mortgage lender--even more dicey--especially when your own money's at risk.

But a very successful fellow mortgage banker and friend of Tasker's, Felix Beck, chairman and CEO of Margaretten Financial Corporation, Perth Amboy, says Tasker has a lot of strengths that make him well suited to weather the ups and downs of the business. Beck says that is why "I've spent most of my life trying to hire him." He counts among Tasker's attributes the fact that he is "a natural salesman, a straight talker, someone you can trust, a person with the courage of his convictions, someone with a broad understanding of the business, and someone who not only says what he believes, but can say it effectively."

Early days

When Herb Tasker first put down roots in northern California he had the good fortune of picking a spot that was God's idea of real estate paradise--at least until recently. When Tasker got out of the Navy, he found himself in the San Francisco Bay area--at a time when that market was poised for some phenomenal growth in real estate values and population.

As a 1958 graduate of Colgate University, where he got an undergraduate degree in psychology and economics, Tasker got out of the service facing a career decision. Should he get a graduate degree or what? He says, "I didn't know why I'd want to go to business school and I didn't have the money to do it. So, as an alternative, I had to go to work. But when I went to work, I always tried to get ahead of the curve. It started when I tried to get the president of Mason-McDuffie to send me to a Dale Carnegie course, because my wife was pregnant and I didn't have any money. He refused."

Tasker says the executive told him instead to go to an organization called Toastmasters--a group that anyone can join for little or no cost and learn the art of public speaking. Tasker took him up on the suggestion and now considers Toastmasters "one of the greatest organizations in the country." He also went to Dale Carnegie, but paid for it on his credit card over six months.

Self-improvement mission

This intense self-improvement drive is kind of Herb Tasker's missionary work in the business. He says he tries to get as many of All Pacific's 75 loan officers to go through Toastmasters training, as will go. But he also sends them to Dale Carnegie. To further his own professional growth, he attended night school at the University of California, Berkeley and got a certificate in real estate. He also attended through MBA's School of Mortgage Banking and holds a CMB. He also went through executive management school at the University of California at Irvine.

Tasker saw this personal drive to upgrade his skills and knowledge pay off in his own career. He also sees in this effort to export the religion of self-improvement a means of possibly heading off increasingly intrusive regulation of the business. If the industry can succeed in self-regulating by imposing high standards and ethics, perhaps there will be fewer cases where consumer grievances prompt more government regulation.

But he admits that getting today's young professionals motivated to take on this kind of extracurricular work is a tough sell. He tried it with his own four children and only the oldest son took him up. Treak Tasker went through both Toastmasters and Dale Carnegie and is pursuing a career as a commercial mortgage banker with Harding Fletcher Company. "The other three just look at me like I'm nuts," Tasker says.

Beth, his daughter, works for Cellular One Telephone and lives in San Francisco, and the youngest two are twin boys--Bob and Chris. Bob works for PMI Mortgage Insurance as an underwriter. Chris, just got out of Cal, Berkeley, and is a sales representative for Cable and Wireless. Herb's wife, Bourke, is the source of the Montana connection. A log cabin in Montana built in 1912 is an old summer home that has stayed in her family for 80 years.

The All Pacific venture

Perhaps part of the endless drive to be better than you've been is what drove Herb Tasker to try his hand at building just one more company. And it was a chance to do it his way. Many aspects of All Pacific Mortgage Company reflect what Tasker and his top co-owners and colleagues are all about. Take the 401(k) plan. As Samson, All Pacific executive vice president, says, "He really believes in giving things back to people. As a tiny new company, we had a 401(k) established--the fanciest 401(k) you've ever seen. We were still putting up branches and had no money to put into it and he said 'I don't care. Someday we'll be able to put money into it.' Our employees knew that about Herb. We had 85 percent participation in our 401(k) with no guaranteed matching contribution. The fact that Herb stood up there and said I want to do this for you, and some day we'll have money in it was enough for them. Our broker couldn't believe it."

Tasker and his core team of long-time mortgage business partners decided to buy All Pacific in July 1989 from Valley Federal Savings in Fresno. When they bought it, the mortgage company had two branches and forty people, with no more than five or six loan officers. In the first year, they changed the name from All Valley to All Pacific Mortgage Company. Tasker says in retrospect, it probably would have been easier to start the company from scratch rather than retrofit the thrift-owned mortgage company into an independent mortgage company.

Tasker notes the growth of his new company is visible in the production volume. He says when they first bought All Pacific in 1989, the annual production volume was roughly $130 million. In 1992, Tasker predicts All Pacific will do more than $1 billion in fundings. About 30 percent of the volume comes from wholesale business done with mortgage brokers, and the balance comes from the retail operation.

As of this summer, All Pacific had a servicing portfolio of roughly $800 million, Tasker said. He adds that to cover operating expenses, the company is still having to sell a large percentage of its servicing, which he monitors like a hawk.

One senses there is a bit of the business activist about Herb Tasker, in the way that he goes about ensuring that those who toil in the trenches get a piece of the action. If one were to write the business manifesto of Herb Tasker, you wouldn't need to go any farther than the fact that the key executives, most branch managers and even some top producers at All Pacific own a piece of it.

Tasker says his management philosophy has three key components. First, you must "build a team that has the highest integrity and credibility. That impacts everything you do." Then, you give these people a tangible and long-lasting reason to stay, by giving them an opportunity to own part of what they're doing. And, on top of that, Tasker believes that you give your fellow owner/managers freedom to manage. This is how he puts it: "There's a great deal of insecurity in the mortgage business, so that people tend to take jobs hoping the company will survive, only to find out they've worked for eight or nine years to have the company go out of business. So one of the things that has attracted people to us is that not only can they own part of what they're doing, but they can have a real say in the direction of where we're going, because we don't have some American corporate partner who's going to change directions every third week. Or a major financial institution that has different ultimate goals than we do as a mortgage company."

Doesn't do road shows

The real Tasker manifesto comes out when you ask if All Pacific would consider doing a public stock offering. He replies, "When you do an IPO |initial public offering~, you have a new boss and that's the stockholder. So everything you do goes in the newspaper. When we have a loss for a quarter--a marketing loss--that's our problem. We don't pay dividends and we're not worried about the stock price. And I don't do road shows singing for my supper. Now, it would be wonderful to have a couple of hundred million dollars to use at my discretion to buy a portfolio or get a corporate jet or something of that nature. But there's a price you pay for that. So you get down to what price glory, and what lifestyle, and how much is enough. And we're happy to grow in our niche and control our own destinies and do the things that we do because it makes good business sense for the long haul, as opposed to looking good in the paper for the short haul to create dividends on the stock."

When you walk into All Pacific Mortgage Company in Concord, California, you quickly see it's a very straightforward and utilitarian place--no glitter, no glitz, no corporate art treasures, no marble coffee tables, and certainly no corporate jets, although Tasker does tool around in a BMW with a bizarre barking electronic alarm system. But the first thing you notice when you enter the reception area are the faces of all the producers on the "APMC Wall of Fame." This is a mortgage company that puts its loan officers in a place of tribute--they are considered the lifeblood.

After all, Tasker came up through production and that shaped him. He says he worked "in the field" doing loan production from roughly 1964 to 1974. "I've always viewed myself as somebody that came out of the trench, because I was a loan officer for so many years. A lot of people think this has left me with serious brain damage."

This identification with the people on the front lines in the business seems to shape his sense of mission as president of the industry's trade group. He is not comfortable with MBA's long time line about being the "pre-eminent trade association for real estate finance." It sounds too lofty and snobby. He says, "I don't want to be necessarily pre-eminent. I want to be hands-on proactive, a bridge builder to bring people into our association."

With that as his mission, Tasker has set about trying to make MBA bring mortgage brokers more into the fold and the workings of the committee structure. He notes that MBA has established a full-time wholesale committee and he says he wants to build on efforts already taken "so that brokers feel that they can come and be part of our governing process as an association."

The FHA reforms passed in 1990 with the Cranston-Gonzalez National Affordable Housing Act hit Tasker's business directly. Reversing the negative impact of those reforms and others that damage the viability of FHA will be high on a list for Tasker's presidency. When All Pacific Mortgage began in 1989, the company was doing roughly 50 to 60 percent FHA business, particularly in the central Valley California locations where the company is the strongest. Today, Tasker says the percentage has skidded to 15 to 20 percent and is still dropping.

But perhaps Tasker's biggest concern today is the problems in the California economy. His servicing portfolio is probably 85 to 90 percent concentrated in the state and Tasker notes that for the first time, California is seeing net job loss. To try to diversify the portfolio, All Pacific is looking at starting up "some type of operation" in two other states. Although his company is exclusively in residential lending, he adds that California's commercial real estate problems are "the worst in the country," and may take until 1997 to resolve.

On top of all that, it's an election year and the results of the contests could spook the stockmarket and send interest rates climbing, which would be disastrous for real estate, Tasker notes. Like many independent businessmen he is a tough critic when it comes to Congress and the presidency. But he appears to come by it honestly. Tasker notes that his 82 year-old mother, a life-long Republican, is not going to vote for George Bush. She told her son four years ago, at 78, that Bush lacked a domestic policy. She had him pegged pretty darn early. But she likes Ross Perot. No wonder Herb Tasker is such a born independent. It must be in the genes.

Janet Reilley Hewitt is editor in chief of Mortgage Banking magazine.
COPYRIGHT 1992 Mortgage Bankers Association of America
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:profile of incoming president of Mortgage Bankers Association of America Herb Tasker
Author:Hewitt, Janet Reilley
Publication:Mortgage Banking
Date:Oct 1, 1992
Previous Article:In the year 2002.
Next Article:A pivotal year for servicing.

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