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Joint Investigation

Warren Buffett and his holdings in the manufactured housing industry have been in the news lately and none of it has been positive.  While congress is trying to roll back some of the tight regulations brought forth from the Dodd-Frank act, house Democrats are calling for a joint investigation from the Department of Justice and the Consumer Financial Protection Bureau.  Whether Democrats are truly targeting Berkshire-Hathaway’s subsidiaries Clayton Homes, Vanderbilt Mortgage, and 21st Mortgage over predatory lending allegations or if Democrats are simply attempting to demonstrate the importance of Dodd-Frank during debates we cannot be certain, however, allegations do exist.

The allegations surrounding Clayton Homes and its lending partners are of discriminatory lending toward low to moderate income minorities. Clayton customers have Reported to The Seattle Times saying they were, “misled into high cost loans they could not repay”.  Legislators are looking for the involvement of the CFPB because predatory lending practices, especially practices involving racial discrimination, would be a violation of the Dodd-Frank Act, the Equal Credit Opportunity Act, and the Fair Housing Act.

Clayton has not had much commentary on this matter but has said that their lending affiliates Vanderbilt Mortgage and 21st Mortgage are strictly monitored by both State and Federal regulators and that they offer lending products to a wider range of credit scores and due to their wider credit score acceptance they service loans for low to moderate income minorities at a higher density than their competitors.  Clayton also stated that for borrows with a credit score lower than 600 the average note rate was the same for both whites and non-whites.

Sam Gilford of the CFPB said allegations of predatory lending are concerning but declined to say if there were plans to open an investigation.

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January 19, 2016 Posted by | General Information | , , , , , , , , , , , , | Leave a comment

Agencies Set Mortgage-Servicing Rules for Military Members

On June 21st, 2012 the Consumer Financial Protection Bureau (CFPB), Federal Reserve, Federal Deposit Insurance Corp., National Credit Union Administration and The Office of the Comptroller of the Currency issued that mortgage servicers to provide servicemembers with guidance about information that they need to sell their homes.  This guidance also extends to modifying their loans when they must relocate.  For additional information click here for the press release.

The goal here is to provide the servicemembers who are receiving permanent change in station orders are obtaining “Clear, accurate, and timely information about available options such as loan modification or short sale,” declared the CFPB director, Richard Cordray.

According to the CFPB, approximately one-third of active duty servicemembers get these orders each year and the Department of Defense figures about 180,000 members of the military are homeowners.

The guidance also addresses two specific practices: asking servicemembers to waive their rights under the servicemembers Civil Relief Act as a condition for assistance or skip mortgage payments to become eligible for assistance.

June 26, 2012 Posted by | Financial Information | , , , , , , , , | Leave a comment