Billionaire philanthropist Warren Buffett controls a mobile-home empire that promises low-income borrowers affordable houses. But all too often, it traps those owners in high-interest loans and rapidly depreciating homes."
"Clayton Homes, a component company of Berkshire Hathaway, is the United States' largest manufacturer of manufactured housing and modular homes.
Remember Oakwood Homes?
...They produce homes under the brand names of Buccaneer Homes, Cavalier Homes, Clayton Homes, Crest Homes, Giles Industries, Golden West Homes, Hart Housing, Karsten Company, Marlette Homes, Norris Homes, Oakwood Homes, Schult Homes, Southern Energy Homes and TruMH."
"Billionaire profits at every step, from building to selling to high cost lending
...Carol Carroll has been paying down her home for more than a decade but still owes nearly 90 percent of the sale price — and more than twice what the home is worth.
...loan terms that changed abruptly after they paid deposits or prepared land for their new homes; surprise fees tacked on to loans; and pressure to take on excessive payments based on false promises that they could later refinance.
...two Clayton sales lots sit three miles from each other. Clayton Homes’ banners promise “$0 CASH DOWN.” TruValue Homes, also owned by Clayton, advertises “REPOS FOR SALE.” Other nearby Clayton lots operate as Luv Homes and Oakwood Homes. With all the different names, many customers said they believed they were shopping around.
...House-sized banners at dealerships reinforce that impression, proclaiming they will “BEAT ANY DEAL.”
...in examining more than 100 Clayton home sales through interviews and reviews of loan documents from 41 states, reporters found that the company’s loans routinely violated the lending standards laid out by Buffett.
...Clayton’s Oakwood Homes dealer in Knoxville told Tim Smith that Vanderbilt was “the only one who would be able to do the deal,” Smith said. His used home arrived a month later, long after Smith had traded in his previous home as a down payment, he said. The Clayton contractor who delivered the house refused to haul it up the hill, Smith said, unless Smith took out a short-term, high-interest payday loan to cover an unexpected fee.
...93 percent of Clayton’s mobile home loans had such costly terms that they required extra disclosure under federal rules. For all other mobile-home lenders, less than half of their loans met that threshold.
...In a letter to shareholders last month, Buffett wrote that a “very high percentage of [Clayton’s] borrowers kept their homes” during the 2008 housing meltdown and ensuing recession, thanks to “sensible lending practices” that were, he has said, “better than its major competitors.”
...Clayton’s failure rates are 26 percent at 21st Mortgage and 33 percent at Vanderbilt, said Rishel, who cited his research and conversations with Clayton executives."