CFPB says unit of Warren Buffett's Berkshire Hathaway ignored red flags in manufactured home loans

abcnews.go.com:

The federal Consumer Financial Protection Bureau said in a lawsuit that a unit of Warren Buffett's Berkshire Hathaway ignored red flags that borrowers couldn't afford the mortgages they were given to buy manufactured homes from another Berkshire company

OMAHA, Neb. — The federal Consumer Financial Protection Bureau says in a lawsuit that a unit of Warren Buffett's Berkshire Hathaway “ignored clear and obvious red flags” that borrowers couldn't afford the mortgages they were given to buy manufactured homes from another Berkshire company.

The CFPB said Monday that Vanderbilt Mortgage & Finance's decisions put many families in a position where they struggled to pay their bills and purchase basic necessities. In one example, Vanderbilt approved a loan for a family that already had 33 debts in collection and as a result, the family started to fall behind just eight months after the loan was approved.

“Vanderbilt knowingly traps people in risky loans in order to close the deal on selling a manufactured home,” CFPB Director Rohit Chopra said in a statement.

Vanderbilt is a unit of Berkshire's Clayton Homes, which is the nation's largest builder of manufactured homes. A spokesperson for Vanderbilt said the company was reviewing the CFPB lawsuit Monday but didn't immediately comment. Clayton also didn't immediately respond. Both Vanderbilt and Clayton are based in Tennessee.

A decade ago, Clayton was accused of predatory lending in a series of news articles, but Buffett defended Clayton's lending practices and said the company followed all state and federal laws.

After the 2008 financial crisis that was triggered by systemic failures in the mortgage market all lenders were required to verify borrowers’ incomes and make a