The third big rating agency, Fitch Ratings, hasn't done any in-depth scores on the company. The other agency, S&P Global Ratings, last affirmed Quicken as "BB" in 2017, or two notches below investment grade on that agency's scale. More: War erupts between mortgage giants Quicken Loans, United Shore "So If you begin to let the air out of that balloon, then everything begins to collapse.” ”If you took Dan Gilbert’s enterprises out of the equation, Detroit's downtown would be basically crawling along in rebuilding itself," said John Mogk, a Wayne State University law professor who specializes in urban development. Gilbert's real estate firm, Bedrock, owns or controls about 100 properties in greater downtown Detroit and has undertaken expensive renovations of many of them. Among other projects, the firm is building what would be the tallest skyscraper in Detroit, surpassing the Renaissance Center in height.
No one contends that Quicken Loans is facing any immediate danger of a cash crunch, but the rating agencies' cautionary assessment raises questions about the long-term stability of the mortgage lender's business model - as well as downtown Detroit's continued resurgence, which has relied on Gilbert's ability to finance big real estate investments. For the rating agencies, a fundamental issue is not how well Quicken is managed, but rather the nature of its business as a non-bank mortgage lender that is reliant on short-term financing - and without any bank deposits to fall back on.ĭuring last decade's mortgage market meltdown and financial crisis, several similar lenders collapsed when their short-term borrowing arrangements dried up.
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