A suit filed Monday by the federal consumer financial protection agency says that a financing unit of Clayton Homes, Inc. – the largest manufactured home builder in the U.S. and a wholly owned subsidiary of Berkshire Hathaway, Inc. – provided loans for manufactured homes, or mobile homes, knowing the borrowers would not be able to afford to repay.
The suit by the Consumer Financial Protection Bureau (CFPB) against Vanderbilt Mortgage & Finance, Inc., a nonbank financing company based in Maryville, Tenn., alleges that beginning in 2014, Vanderbilt violated the Truth in Lending Act and Regulation Z (its implementing regulation) by originating loans without making a reasonable, good faith determination of the consumer’s ability to repay the loan.
The bureau says Vanderbilt manipulated lending standards when borrowers did not make sufficient income; fabricated unrealistic estimates of living expenses; and made loans to borrowers it projected could not pay. It said many consumers were charged late fees and penalties when their loans became delinquent and lost their homes when the loans went into default.
The bureau said it seeks, among other things, to bring defendants into compliance, consumer redress, and the imposition of civil money penalties.
CFPB Sues Vanderbilt for Setting Borrowers Up to Fail in Manufactured Home Loans
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