Quicken Loans’ Gilbert: Go Out There and Grow
SAN DIEGO–The current market holds more opportunity for mortgage companies of all sizes than any time since before the financial crisis, said Quicken Loans Founder and Chairman Dan Gilbert.
“If you’re here, it means you survived Armageddon,” Gilbert said here at the Mortgage Bankers Association’s 102nd Annual Convention and Expo. “What’s going to happen worse than that? Nothing in our lifetimes. So go out there and grow your businesses.”
Quicken Loans CEO and 2016 MBA Chairman Bill Emerson agreed that 2007 and 2008 reshaped the mortgage industry. “People in the industry today want to do things the right way,” he said. “Stop looking backward. You cannot grow and advance when you’re looking in the rearview mirror.”
Gilbert founded the firm that would become Quicken Loans in 1985. Software firm Intuit purchased the company in 2000, but Gilbert and a small group of investors re-purchased it in 2002. It grew to become the nation’s second-largest retail home mortgage lender. He purchased the NBA’s Cleveland Cavaliers in 2005.
Gilbert said the mortgage business differs from other sectors. “Our industry is a little different,” he said. “We always looked at mortgages this way: our products are not that different from anyone else’s products. It’s not like some firm has air conditioning on 30-year loans and another doesn’t, and since the Mortgage Armageddon, there are even fewer products. So it’s not the product. Price is taken away, product differentiation is taken away, so Quicken Loans competes on the way we deliver that home loan to the customer.”
Technology lets Quicken Loans differentiate, Gilbert said. “Technology let us centralize the 50-state, 3,000-county process to close loans. That involved trial and error, figuring it all out, but once you do figure it out, the barriers to entry for others are so high that you can’t even see them.”
Culture represents another differentiator, Gilbert said. “Culture for us is everything. It doesn’t define what you do; it defines who you are. To this day Bill Emerson and I spend at least eight hours with new employees who have started at Quicken Loans within the last six weeks. Because when they don’t know who you are, they start freezing rather than innovating.”
A firm’s culture compares to a skyscraper’s foundation, Gilbert said: “The foundation is the culture and everything else sits on top of it.”
Gilbert’s business ventures have invested more than $1.8 billion in downtown Detroit in the past five years, buying 80-plus properties with the goal of revitalizing the area. “I consider it doing well by doing good,” he said. “I was born in Detroit, as were my dad and grandfather. I wasn’t west of East Lansing until I was 25 or so. When our leases were coming due around 2010 we were spread out in eight buildings. We had three options: renew the leases and stay, build a consolidated campus (in the suburbs) or go to downtown Detroit. We realized the third was how we could make a difference.”
Gilbert said the suburban location also caused the firm to lose some younger applicants. “We started losing graduates of University of Michigan, Michigan State and Wayne State,” he said. “People started declining to work here. One told me that he very much liked the company but did not want to park in a suburb, walk 300 yards across a parking lot into a building then at night walk 300 yards back to the car to go to his apartment. We started realizing that this generation prefers the urban core. This was a move not just to do good, but also to get the best talent we needed.”
At the same time, Gilbert said “these beautiful architectural gems were for sale [in downtown Detroit] for very low cost. Buildings designed by Geary, Yamasaki and other prominent architects were available, our business was growing rapidly and we were able to acquire this real estate in a downtown urban core campus.”
Gilbert called himself grateful to be in the Motor City. “Detroit has given back to us,” he said. “There’s no chance we’d be the company we are without Detroit’s help.”
