Unit of Warren Buffett’s Berkshire Hathaway Sued by CFPB Over Home Loans [Video]

A unit of Warren Buffett’s Berkshire Hathaway is being used by the Consumer Financial Protection Bureau (CFPB) for disregarding “clear and obvious red flags” indicating that borrowers were unable to afford the mortgages provided to purchase manufactured homes from another Berkshire-owned company.

Why It Matters

The CFPB said that Vanderbilt Mortgage & Finance, which is owned by Berkshire Hathaway, trapped “people in risky loans.”

The CFPB alleged in Monday’s lawsuit that Vanderbilt Mortgage & Finance’s lending practices forced numerous families into financial hardship, leaving them unable to cover basic expenses. In one instance, the company approved a loan for a family already burdened with 33 debts in collection, leading to loan delinquencies just eight months after approval.

What To Know

Vanderbilt Mortgage & Finance, a division of Berkshire Hathaway’s Clayton Homes—the nation’s largest manufacturer of prefabricated homes—is at the center of the CFPB lawsuit.

Clayton Homes faced allegations of predatory lending a decade ago, following a …