Vanderbilt Mortgage, N.C. Bank Commissioner Settle

As part of a settlement agreement with the North Carolina Commissioner of Banks (NCCOB), Vanderbilt Mortgage and Finance Inc., a Berkshire Hathaway company that specializes in financing for manufactured homes, has agreed to refund $2.8 million to North Carolina homeowners, pay a civil money penalty of $750,000 to the state, and contribute $250,000 toward the State Home Foreclosure Prevention Project.

The company also agreed to improve its business practices and internal controls to ensure compliance with state and federal laws, including North Carolina's SAFE Act regulations.

"As more and more manufactured-home loans are now secured by real estate, manufactured-home lenders have struggled to meet the standards required of mortgage lenders," says Mark Pearce, chief deputy commissioner of banks.

Manufactured housing represents about 15% of housing in North Carolina, NCCOB says.

Traditionally, manufactured-home lenders offered loans secured by the manufactured-housing unit itself. In these transactions, the unit was considered a vehicle under North Carolina lending and title laws. In recent years, however, the industry has increasingly relied on "land/home" deals, where the manufactured-home unit is attached to real property, titled as real estate, and secured by a mortgage, NCCOB explains, noting that such mortgages "are and have always been subject to all of North Carolina's mortgage laws."

Also, due to recent changes in mortgage licensing laws, individuals who solicit or accept applications to finance manufactured homes must be licensed and supervised by NCCOB, regardless of whether or not these home loans are secured by land.

NCCOB's examination of Vanderbilt alleged numerous violations of North Carolina law. Upon notice of the alleged violations, Vanderbilt took prompt corrective actions to ensure its processes addressed NCCOB's concerns, the commissioner's office says.

SOURCE: North Carolina Commissioner of Banks


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