Slumlord’ Buffett’s “Disturbing Business Model” To Be Probed By Feds

He walked them through Clayton-built homes on the lot, then into the sales center, passing a banner and posters promoting one subprime lender: Vanderbilt Mortgage, a Clayton subsidiary. Inside, he handed them a Vanderbilt sales pamphlet.

“Vanderbilt is the only one that finances on the reservation,” he told the women.

His claim, which the women caught on tape, was a lie. And it was illegal.

In minority communities, Clayton’s grip on the lending market verges on monopolistic: Last year, according to federal data, Clayton made 72% of the loans to black people who financed mobile homes.

The company’s in-house lender, Vanderbilt Mortgage, charges minority borrowers substantially higher rates, on average, than their white counterparts. In fact, federal data shows that Vanderbilt typically charges black people who make over $75,000 a year slightly more than white people who make only $35,000.

Through a spokesperson earlier this month, Buffett declined to discuss racial issues at Clayton Homes, and a reporter who attempted to contact him at his home was turned away by security…

She continued to raise concerns, writing in an email to Clayton’s director of marketing that when she spoke to new borrowers, “there were many things they were not made aware about during the sale.”

Managers and executives, she said, dismissed her concerns; she recalled one replying, “It doesn’t really matter as long as we get the money.”

– From the post: How Warren Buffet’s Clayton Homes Intentionally Targets & Preys Upon Minorities and Poor People

Yesterday, four members of Congress sent a joint letter to both Richard Cordray, head of the Consumer Financial Protection Bureau, and Loretta Lynch, Attorney General of the United States, demanding an investigation into predatory practices at Warren Buffett’s mobile home unit Clayton Homes.

Reuters reports:

A letter on Tuesday from Representative Maxine Waters, the top Democrat on the House Financial Services Committee, and fellow committee members Michael Capuano, Emanuel Cleaver and Keith Ellison called on the Justice Department and the Consumer Financial Protection Bureau to “pursue appropriate corrective action” against Clayton.
Clayton did not immediately respond on Wednesday to requests for comment on the letter, which the Seattle Times reported earlier.

Buffett did not immediately respond on Wednesday to a email request for comment sent to an assistant.

Yes, he was too busy eating ice cream cones and saving puppies from burning buildings to be bothered.

At Berkshire’s annual meeting last May, Buffett said he made “no apologies whatsoever” about Clayton’s “exemplary” lending, in response to a question about an earlier Seattle Times story saying that Clayton trapped borrowers into unaffordable loans on depreciating homes.
You can read the full letter below.

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Of course, I don’t think for a moment that any real repercussions will actually befall Warren Buffett or his companies. He is one of the most powerful and influential oligarchs in America. In the absence of a total economic collapse, it would be inconceivable and highly unlikely that the government could or would go after this man, because in so many ways this man is the government.

Take that serfs.

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About the Author: Tyler Durden