Which brings me back to my day in Gilbertville, as it's pejoratively or lovingly called — depending on if you're Forbes or a local barstool historian.
During the rest of my meeting with Gilbert, I breeze through topics he seemingly expected me to touch on: the still-ongoing employment overtime lawsuits, the predatory lending case in West Virginia (which Gilbert calls "one of the most egregious things I've ever seen in business"), and what the company is doing downtown.
On the overtime lawsuits (and, really, on the vast majority of lawsuits the company considers meritless), Gilbert says: "When companies settle, they become co-conspirators, because they just feed the monster. We're not going to do that ... For us, I couldn't look at our people every day and say we paid this." He emphasizes that the company has faced only one, maybe two court judgments in its 29-year history.
After a fast-paced 75 minutes, Gilbert and I part ways. Gilbert tells me during our interview to ask direct questions about lending claims to the remaining group of about a dozen I'll interview for the day, all white males, besides one black female, Leslie Andrews, director of community outreach in Detroit for Quicken and one black male, Tony Nuckolls, vice president of training and development. Emerson takes me down to the ninth floor to meet with them.
On the way down, I return to this point: Access for a journalist is needed in some circumstances, sure. Right now, I still am surprised by the kind I've been given. Why all the trouble?
Over the course of the next 90 minutes with some of the company's top execs and legal counsel, the conversation zeroes in on a number of issues related to legal complaints filed against Quicken and the company's overall culture. Some pick away at sandwiches catered by the nearby Potbelly Sandwich Shop and take pulls on provided Kirkland bottles of water.
This group of top Quicken reps, located in what I believe was called the Boblo Room, never gets around to discussing specifics on certain lawsuits I mention in the initial set of emailed questions to the company, because it becomes evident early on that everyone in the room would speak only in generalities.
So in the same follow-up email to Emerson, I ask directly about the specific loan for the Detroit homeowner referenced in the Deutsche lawsuit. Emerson tells me to "keep in mind" that the company has sold more than 2 million loans, and for years has had stringent underwriting controls in place.
"However, when a national home lender closes more than 2.1 million mortgages, one would always be able to find a handful of loans and situations — even with the most stringent controls in place — where something potentially went wrong," he writes.
And, he continues, "Clearly, it would be an unfair characterization that anything in our underwriting or loan processing systems is defective using a handful of loans (or even hundreds of loans or more) as evidence of such."
I wonder if Emerson's response would be similar if I included the fact that the same lawsuit from Deutsche mentions a loan for a home in Washtenaw County where the borrower allegedly represented he earned $13,500 per month. As it turns out, the borrower's bankruptcy documents filed after he received the loan show, he only earned roughly $8,837 per month.
Or, if perhaps Emerson's response would change if I had mentioned the lawsuit filed by a Romulus woman who claimed her Quicken loan officer, one day before closing, increased her closing costs by roughly double — and then gave her an interest rate nearly 2 percentage points higher. The net effect? The homeowner's monthly cost shot up $850 dollars, or 73 percent, to $2,036 per month, court documents show. Still, the homeowner, the director of human resources at Wayne County's Third Circuit Court, signed anyway, which is partly why her case was dismissed by the Sixth Circuit Court of Appeals.
Or, perhaps his response would have changed if I had mentioned the 79-year-old retired woman on a fixed income I recently met who, seven years ago, was sold a 30-year mortgage for a home that was already paid off. She needed the financing to make necessary repairs to the home. The terms of her agreement required her to pay interest-only for the first decade.
She will be 102 when her mortgage is fully amortized.
'A Friendly Reminder'
While profiles of the business mogul paint the picture of a man who's driven to rebuild the city, Gilbert makes no bones about it that he doesn't possess a silver bullet to resolve all of Detroit's problems. That hasn't stopped a number of prestigious news organizations from raising the billionaire's standing to that of a savior.
With that, Gilbert has been recognized as someone who's quick to speak his mind. At times, his word is taken into consideration to almost-comical points: For instance, after CBS' 60 Minutes broadcast a report about Detroit that included an interview with Gilbert, the billionaire wasn't pleased with the finished product. So he tweeted about it. Promptly, local outlets took his comment and wrote stories grounded entirely upon his tweet.
In 2008, Crain's Detroit Business penned an exposé on a convoluted lawsuit involving Quicken-financed mortgages. Quicken contended a borrower had conspired to fraudulently purchase 16 homes through the company. As Anna Clark noted in CJR, "Crain's saw the lender as part of a culture of 'easy money, rushed deals.'"
Crain's noted inconsistencies on the borrower's loan applications with Quicken: "Her income ranged from $5,000 to $35,000 per month ... her liquid assets from $5,000 to $35,000," the newspaper reported. "Five times, she was a first-time home buyer."
At the time, Gilbert was incredulous.
"Crain's came to these intellectually impotent conclusions over 16 loans where we are the plaintiff suing for fraud," Gilbert wrote in a response letter to Crain's. "The other approximately 400,000 loans we closed in all 50 states over the past eight years avoiding fraud, subprime and other short-sighted mortgage fads of the last decade somehow went unaccounted for in the articles."But, only three years later, real estate reporter Michael Hudson of the Center for Public Integrity took a deep dive into Quicken's record. To some, Hudson found, Quicken had in fact hopped onto the bandwagon with some of those mortgage fads. Between lawsuits from employees who painted a work culture unlike the one Gilbert portrays to the public, and cases involving borrowers who contended they were given a raw deal from Quicken, Hudson wrote those "claims are at odds with [Quicken's] squeaky clean image."
No local media followed Hudson's lead. When a reporter from CBS News asked Quicken for comment on the story, the company jumped to extremes. A spokesperson immediately sought to discredit Hudson, who has covered the finance industry for over two decades, and his outlet as a "not very credible source."
Nearly four years after the report was published, Gilbert tells me that the Center for Public Integrity is "biased against us." Before I left for my other interviews, he provided me with a daunting nine-page, point-by-point rebuttal that seemingly was shared with local media outlets at the time Hudson's report was published. Clearly the perceived offense years ago is still on his mind.
Another current employee who declined to be named says that Quicken, as a whole, is very touchy about news coverage and actively seeks out the identities of those who speak to the media anonymously — characterizing the process as a "very diligent" hunt to out those who talk.
That concern runs up the chain. When Metro Times sister paper Cleveland Scene made exploratory phone calls to employees on a Quicken story unrelated to the housing crisis, it received an unprompted email from Tad Carper, VP of Communications for the Cleveland Cavaliers, asking what the Quicken story was all about.
And when MT wrote a lowly three-paragraph blog post about one of Gilbert's gaming entities being fined in Ohio, our phones blew up for hours as his press reps sought out an editor to change the headline, worried it would cost them a gambling license.
Even when it comes to potential errors made by smaller, left-leaning online news outlets, Quicken makes a point to reach out. Late last year, in response to a story from Voice of Detroit on the planned redevelopment of another building in Capitol Park, a spokesperson repeatedly sought a correction to clarify Gilbert's connection to the developers of the project.
Surprisingly, a number of people not involved with Quicken or the media discouraged us from running this story, as if Gilbert's powerful influence has seeped into Detroit's collective consciousness.
What does it say about Detroit?
There will be years to come to debate the relative impact of Gilbert's investment in Detroit. Many boosters feel energized that this is the moment, finally, Detroit has been awaiting.
Still, there are mentalities at odds in Detroit questioning how the city should grow. The discussions boil down to a simple, philosophical question: What is a city supposed to be?
In time, Detroiters will see if Gilbert lives up to his grandstanding promises of revitalizing the city. All that can be proved at the moment is that Detroit indeed highly regards its billionaires, placing uncritical faith in their enormous wealth, their ideas, their vision. It's a common feature of the city's history, putting all of its eggs in the baskets of its elite. They have been continually granted enormous power to guide the city.
And so it's fascinating that the most visible among them made his fortune in an industry that caused the nation in general — and Detroit, in particular — so much grief. Gilbert's efforts put him in a better position than ever to appear as the city's savior.
Given a positive public profile heightened by the media, an uncritical public, and eager-to-please officials, there hasn't been a conversation over these mounting ironies: Was Quicken a major part of the problem Gilbert now, at least in Detroit, is seen as riding to the rescue to solve? Is that a conversation we even want to have?
Updated 9:12 a.m., Nov. 12: We added a line clarifying the 2008 Crain's Detroit Business article.
