CFPB Sues Vanderbilt Mortgage Over Loans for Manufactured Homes; Company Refutes Claims

Edited: Jan. 6, 2025; 6:28 pm ET.

Bạn đang xem: CFPB Sues Vanderbilt Mortgage Over Loans for Manufactured Homes; Company Refutes Claims

The Consumer Financial Protection Bureau (CFPB) has sued Vanderbilt Mortgage & Finance claiming the mortage company set up families 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, the agency alleges, some families found themselves struggling to make payments and meet basic life necessities. The CFPB claims 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 what it claims are Vanderbilt’s illegal practices and to obtain relief for the harmed homeowners.

Xem thêm : DOE awards $9.63B loan to BlueOval SK to build battery plants in Kentucky and Tennessee

“Vanderbilt knowingly traps people in risky loans in order to close the deal on selling a manufactured home,” said CFPB Director Rohit Chopra. “The CFPB’s lawsuit seeks to not only protect homebuyers, but also honest lenders helping people to finance the purchase of an affordable home.”

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.

In a statement to CPA Practice Advisor,Vanderbilt Mortgage stated:

“For 50 years, Vanderbilt Mortgage has increased homeownership in the U.S. The CFPB’s lawsuit is unfounded and untrue, and is the latest example of politically motivated, regulatory overreach. Vanderbilt Mortgage’s underwriting processes exceed the legal requirements for assessing a borrower’s ability to repay loans by considering both monthly debt-to-income ratio and residual income, while the law only requires the use of one or the other. Vanderbilt Mortgage goes further by taking the greater of the borrower’s actual reported expenses or an estimated living expense for the family size, similar to that used by the Federal VA loan program. The CFPB examined tens of thousands of Vanderbilt Mortgage loans and identified less than 0.8 percent, over a six-year period, that allegedly should not have been made.  Many of those loans have not been delinquent.  Vanderbilt Mortgage follows the law, and the facts bear that out.”

Xem thêm : Bitcoin Reaches Milestone: Price Surpasses $100k Today

Vanderbilt originates mortgages for the purchase of manufactured homes that are built and sold by Vanderbilt-affiliated companies. Manufactured homes, or mobile homes, are a vital source of affordable housing, particularly for millions of low-income Americans and for older Americans. For these homeowners, who predominately live in rural areas, manufactured homes can fill the gap left by the lack of affordable site-built homes. Although manufactured homes may be more affordable to purchase, CFPB research has shown that manufactured home loans often come coupled with higher interest rates and limited opportunity to refinance compared to traditional home mortgage loans.

Vanderbilt added, “Despite regularly blessing Vanderbilt Mortgage’s underwriting practices in the past, the CFPB is now demanding compliance with an unknown and unknowable new “standard” not addressed in the law.  Far from protecting American consumers, the CFPB’s lawsuit will deprive credit worthy borrowers of owning a home.”

Read today’s complaint.

Read consumer complaints submitted against Vanderbilt.