The founder and chairman of Quicken Loans Inc., who also is majority owner of the Cleveland Cavaliers, talked about the current state of the market and his online lending firm. He also warned against being too generous with principal reductions.
Dan Gilbert made his comments today in an interview on CNBC Squawk Box. Gilbert, who is also founding partner of Rockbridge Growth Equity, warned about cutting principal as part of foreclosure prevention efforts.
"Reducing principal, to me, is going to continue to put the country and the housing market in a death spiral," Gilbert stated. "You're going to have more and more people who are on that border saying to themselves, 'Well, you know, I'm under water, although I can afford my payments, and my neighbor here is getting their principal reduced, why shouldn't I.'"