Quicken founder and Warren Buffett have ties beyond Yahoo deal
By Dan Freed
DETROIT (Reuters) - The connection between Quicken Loans Inc founder Dan Gilbert and billionaire magnate Warren Buffett became evident last month with news that Buffett was backing Gilbert's surprise bid for Yahoo Inc.
But the two men have another business connection that hasn't been reported: an exclusive mortgage-purchasing agreement between Quicken and a subsidiary of Buffett's conglomerate Berkshire Hathaway Inc.
Berkshire owns a company called Vanderbilt Mortgage and Finance Inc, which buys mortgages for traditional houses exclusively from Quicken, Buffett said in an interview. Vanderbilt's primary business is funding mortgages for Clayton Homes, the largest U.S. maker of mobile and manufactured homes, which is also owned by Berkshire.
"We buy a very few loans unrelated to the manufactured home business, and Quicken is the one we buy them from," Buffett told Reuters.
Quicken has been selling loans to Vanderbilt for nearly a year in a test program, spokesman Jordan Fylonenko said in an email. The partnership has led to about $20 million in closed loans so far, and Quicken is issuing new loans at a rate that would generate $50 million per year, he said.
Fylonenko declined to discuss the rationale for its program with Vanderbilt.
The purchases account for a small portion of either company's business. Quicken, for instance, generated $78.5 billion of mortgages altogether last year. Still, the arrangement shows that Buffett and Gilbert are looking for creative ways to work together.
Prior to this deal and the Yahoo bid, their only known business relationship was one in which Berkshire provided Quicken insurance for a NCAA basketball contest the lender sponsored in 2014. Continued...