Watchdog Says Berkshire Hathaway Ignored Red Flags In Home Loans

The federal Consumer Financial Protection Bureau (CFPB) has filed a lawsuit alleging that a unit of Warren Buffett’s Berkshire Hathaway “ignored clear and obvious red flags” indicating that borrowers could not afford the mortgages they received to purchase manufactured homes from another Berkshire company.

The CFPB stated that Vanderbilt Mortgage & Finance’s lending decisions left many families struggling to pay their bills and meet basic needs. I Photo: jongorey Flickr

However, the lender dismissed the claims as “unfounded,” Josh Funk reported for the Associated Press (AP).

The CFPB stated that Vanderbilt Mortgage & Finance’s lending decisions left many families struggling to pay their bills and meet basic needs. In one instance, Vanderbilt approved a loan for a family with 33 debts already in collection.

As a result, the family began falling behind on payments just eight months after the loan was issued.

“Vanderbilt knowingly traps people in risky loans in order to close the deal on selling a manufactured home,” CFPB Director Rohit Chopra said in a statement.

Vanderbilt is part of Berkshire’s Clayton Homes, the largest builder of manufactured homes in the United States. Both Vanderbilt and Clayton are headquartered in Tennessee.

“For 50 years, Vanderbilt Mortgage has increased homeownership in the U.S. The CFPB’s lawsuit is unfounded and untrue and represents the latest example of politically motivated regulatory overreach,” the company said in a statement.