Jamie Spencer
The U.S. Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Clayton Homes, the manufactured housing division of Warren Buffett’s Berkshire Hathaway, accusing it of pressuring borrowers into unaffordable loans.
- Defendant: Vanderbilt Mortgage and Finance, a subsidiary of Clayton Homes.
- Allegations: Ignored clear indicators that borrowers could not afford their loans, leading to late fees, penalties, repossessions, and bankruptcies.
In one example cited, Vanderbilt approved a loan for a family of five, leaving them with only $57.78 per month for discretionary spending. The couple eventually defaulted, according to the complaint.
CFPB’s Claims
CFPB Director Rohit Chopra said:
“Vanderbilt knowingly traps people in risky loans in order to close the deal on selling a manufactured home.”
The CFPB alleges violations of the federal Truth in Lending Act and seeks civil fines and restitution for borrowers harmed by Vanderbilt’s lending practices.
Background on Clayton Homes
Clayton Homes, headquartered in Maryville, Tennessee, is the largest builder of manufactured homes in the U.S. These homes, including mobile homes, are often purchased by individuals with lower credit scores and incomes or those living in rural areas.
- History of Allegations: In 2015, The Seattle Times reported that Clayton drove Black, Hispanic, and Native American borrowers into subprime loans they could not afford.
- Ownership: Clayton Homes has been part of Berkshire Hathaway since 2003, generating $9.1 billion in revenue in the first nine months of 2024.
The CFPB’s complaint was filed in federal court in Knoxville, Tennessee, near Clayton’s headquarters.
