Vanderbilt Mortgage & Finance, which originates loans for manufactured homes, is being sued by the Consumer Financial Protection Bureau (CFPB) for putting borrowers into loans they could not afford.
The CFPB alleges that Vanderbilt failed to make reasonable, good-faith determinations of borrowers’ ability to repay loans and manipulated lending standards when borrowers did not make sufficient income.
In its underwriting process, Vanderbilt often disregarded evidence that borrowers did not have sufficient income or assets (other than the value of their home) to pay their mortgage and cover recurring obligations and basic living expenses, like food and health care, the CFPB says.
Sometimes, Vanderbilt originated loans for borrowers who were already struggling, making their financial situation worse. For example, it approved a loan for a family with 33 debts in collection and two young children. The borrowers fell behind only eight months after getting the mortgage.
Vanderbilt is a unit of Clayton Homes, Inc., which is the largest manufactured home builder in the U.S. and a wholly owned subsidiary of Berkshire Hathaway, Inc., the multinational conglomerate based in Omaha, Neb.
“Vanderbilt knowingly traps people in risky loans in order to close the deal on selling a manufactured home,” says Rohit Chopra, director of the CFPB, in a statement. “The CFPB’s lawsuit seeks to not only protect homebuyers, but also honest lenders helping people to finance the purchase of an affordable home.”
The CFPB’s lawsuit seeks to stop the company’s unlawful conduct, to provide redress for harmed consumers, and the imposition of a civil money penalty, which would be paid into the CFPB’s victims relief fund.
Photo: “cfpb 36794” by tedeytan is licensed under CC BY-SA 2.0