The Consumer Financial Protection Bureau has filed a lawsuit against Vanderbilt Mortgage and Finance in Maryville, Tenn., alleging risky lending practices tied to manufactured home sales.
The bureau claimed in a press release that Vanderbilt, a unit of Berkshire Hathaway subsidiary Clayton Homes, had a business model that “ignored clear and obvious red flags that the borrowers could not afford the loans.” The CFPB’s litigation aims to stop Vanderbilt’s illegal practices and obtain relief for the harmed homeowners.
The lawsuit was filed in U.S. District Court for the Eastern District of Tennessee.
“Vanderbilt knowingly traps people in risky loans in order to close the deal on selling a manufactured home,” CFPB Director Rohit Chopra said in the release. “The CFPB’s lawsuit seeks to not only protect homebuyers, but also honest lenders helping people to finance the purchase of an affordable home.”
The CFPB alleged that Vanderbilt failed to make “reasonable, good-faith determinations of borrowers’ ability to repay loans,” among other things.