The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Vanderbilt Mortgage & Finance, a subsidiary of Warren Buffett’s Berkshire Hathaway, alleging the company knowingly approved risky loans for borrowers purchasing manufactured homes. According to the CFPB, Vanderbilt ignored “clear and obvious red flags” indicating that borrowers could not afford their mortgages, placing many families in financial hardship. In one instance, the bureau cited a family with 33 debts already in collection, who fell behind on payments just eight months after receiving a loan.
CFPB Director Rohit Chopra accused Vanderbilt of deliberately trapping borrowers in precarious financial situations to secure manufactured home sales. Vanderbilt operates under Berkshire’s Clayton Homes, the largest builder of manufactured homes in the U.S. Both Vanderbilt and Clayton, based in Tennessee, have yet to comment on the lawsuit.
This is not the first time Berkshire’s manufactured housing business has faced scrutiny. A decade ago, Clayton Homes was accused of predatory lending, though Buffett defended its practices, asserting compliance with state and federal laws. Following the 2008 financial crisis, mortgage lenders were mandated to verify borrowers’ income and ensure loans could be reasonably repaid. However, the CFPB claims Vanderbilt failed to meet those standards, at times manipulating its lending criteria or relying on unrealistic estimates of living expenses.
Berkshire Hathaway, based in Omaha, owns a diverse portfolio of companies, including major brands like Geico, Dairy Queen, Helzberg Diamonds, and the BNSF railroad, along with manufacturers and utilities. The lawsuit against Vanderbilt highlights ongoing concerns over lending practices in the manufactured housing industry.
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