A recent report criticized Berkshire Hathaway's Clayton Homes subsidary of predatory lending, but Vice Chairman Charlie Munger defended the housing company, yesterday, in an inteview following Berkshire's annual meeting in Omaha.
"We are not forcing loans on anybody. If they had a loan with us they didn't like, they can pass off and borrow from somebody else," Buffett himself told CNBC on the sidelines of the company's meeting with regard to the report.. "We have 300,000 loans on the books and in the last 3 years I've not received one letter of complaint from anybody." He said the report had many errors including mixing up gross and net returns.
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Billionaire philanthropist Warren Buffett controls a mobile-home empire that promises low-income borrowers affordable houses. But all too often, it traps those owners in high-interest loans and rapidly depreciating homes.
ReplyDeleteBut the closing documents he set before them held a surprise: The promised 7 percent interest rate was now 12.5 percent, with monthly payments of $1,100, up from $700.
Editor's note
This report is a collaboration between The Seattle Times and The Center for Public Integrity, a nonprofit, nonpartisan investigative newsroom based in Washington, D.C.
The terms were too extreme for the Ackleys. But they’d already spent $11,000, at the dealer’s urging, for a concrete foundation to accommodate this specific home. They could look for other financing but desperately needed a space to care for her father.
http://www.seattletimes.com/business/real-estate/the-mobile-home-trap-how-a-warren-buffett-empire-preys-on-the-poor/
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