US regulator sues Berkshire unit over risky home loans

(Reuters) - The U.S. Consumer Financial Protection Bureau Monday sued a unit of Warren Buffett's Berkshire Hathaway (NYSE:BRKa ) on Monday for allegedly pushing people into risky, unaffordable loans to buy homes from Clayton Homes, Berkshire's manufactured housing business.

Vanderbilt Mortgage and Finance, a unit of Clayton, ignored "clear and obvious" red flags that borrowers could not afford their loans, and charged many borrowers additional fees and penalties when they fell behind on payments, the CFPB said. Some borrowers eventually lost their homes, the agency added.



"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.

Clayton is the largest U.S. manufactured home builder. Neither Vanderbilt nor Clayton immediately responded to requests for comment.

Source: Investing.com