

Warren Buffet's mobile home empire preys on the poor - spenrose
http://www.publicintegrity.org/2015/04/03/17024/warren-buffetts-mobile-home-empire-preys-poor

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spenrose
In a letter to shareholders last month, Buffett wrote that a “very high
percentage of [Clayton’s] borrowers kept their homes” during the 2008 housing
meltdown and ensuing recession, thanks to “sensible lending practices” that
were, he has said, “better than its major competitors.”

“Our blue-collar borrowers, in many cases, proved much better credit risks
than their higher-income brethren,” Buffett wrote.

Yet the company has provided scant data to back up this claim. “I wouldn’t
give much credence to those comments,” said James Shanahan, an analyst with
Edward Jones who follows Berkshire Hathaway.

Berkshire declared each year since 2010 that 98 percent of its loan portfolio
is “performing.” Yet elsewhere in its financials, the company discloses that
the only loans it considers “non-performing” are those currently in the
foreclosure process. That means the impressive-sounding ratio ignores loans
that are delinquent and those that have already been foreclosed or the homes
repossessed.

Across the industry, about 28 percent of non-mortgage mobile home loans fail,
according to research prepared for an industry conference by Kenneth Rishel, a
consultant who has worked in the field for 40 years. Clayton’s failure rates
are 26 percent at 21st Mortgage and 33 percent at Vanderbilt, said Rishel, who
cited his research and conversations with Clayton executives.

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tim333
I imagine Buffett will encourage Clayton to clean up some of those practices
which do seem kinda bad.

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GFK_of_xmaspast
'If only the king knew!'

