CFPB sues Vanderbilt for unaffordable home-purchase loans

The CFPB this morning announced it has sued Vanderbilt Mortgage & Finance for setting families up to fail when they borrowed money to buy a manufactured home. The CFPB alleges that Vanderbilt’s business model ignored clear and obvious red flags that the borrowers could not afford the loans. As a result, many families found themselves struggling to make payments and meet basic life necessities. Vanderbilt charged many borrowers additional fees and penalties when their loans became delinquent, and some eventually lost their homes. The CFPB is seeking to stop Vanderbilt’s illegal practices and obtain relief for the harmed homeowners.

Vanderbilt Mortgage & Finance, Inc. is a nonbank financing company based in Maryville, Tennessee that originates loans for manufactured homes across the country. 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, Nebraska.

The CFPB alleges that Vanderbilt failed to make reasonable, good-faith determinations of borrowers’ ability to repay loans, as legally required. Specifically, the lawsuit alleges Vanderbilt:

• Manipulated lending standards when borrowers did not make sufficient income
• Fabricated unrealistic estimates of living expenses
• Made loans to borrowers it projected could not pay

The CFPB alleges that Vanderbilt violated the Truth in Lending Act and Regulation Z.

• Complaint against Vanderbilt