Warren Buffet is a Juice Loan Buffoon-That’s Why He Buys Wells Fargo

http://www.seattletimes.com/business/real-estate/the-mobile-home-trap-how-a-warren-buffett-empire-preys-on-the-poor/

The mobile-home trap: How a Warren Buffett empire preys on the poor
Originally published April 2, 2015 at 9:30 pm Updated April 7, 2015 at 9:07 am
Kirk and Patricia Ackley, of Ephrata, spent thousands to prepare their land for their Clayton mobile home, then were stuck with a higher loan rate than promised. The lender, also a Clayton company, would not let them refinance and took their home away. (Ken Lambert / The Seattle Times)
Kirk and Patricia Ackley, of Ephrata, spent thousands to prepare their land for their Clayton mobile home, then were stuck with a higher loan… More

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.

SECTION SPONSOR

By Mike Baker
Daniel Wagner
The Seattle Times / The Center for Public Integrity
First of a series

EPHRATA, Grant County — After years of living in a 1963 travel trailer, Kirk and Patricia Ackley found a permanent house with enough space to host grandkids and care for her aging father suffering from dementia.
So, as the pilot cars prepared to guide the factory-built home up from Oregon in May 2006, the Ackleys were elated to finalize paperwork waiting for them at their loan broker’s kitchen table.

But 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.
Kirk’s construction job and Patricia’s Wal-Mart job together weren’t enough to afford the new monthly payment. But, they said, the broker was willing to inflate their income in order to qualify them for the loan.

“You just need to remember,” they recalled him saying, “you can refinance as soon as you can.”

To their regret, the Ackleys signed.

The disastrous deal ruined their finances and nearly their marriage. But until informed recently by a reporter, they didn’t realize that the homebuilder (Golden West), the dealer (Oakwood Homes) and the lender (21st Mortgage) were all part of a single company: Clayton Homes, the nation’s biggest homebuilder, which is controlled by its second-richest man — Warren Buffett.

Buffett’s mobile-home empire promises low-income Americans the dream of homeownership. But Clayton relies on predatory sales practices, exorbitant fees, and interest rates that can exceed 15 percent, trapping many buyers in loans they can’t afford and in homes that are almost impossible to sell or refinance, an investigation by The Seattle Times and Center for Public Integrity has found.

Kirk and Patricia Ackley spent thousands to prepare their land, then were stuck with a higher loan rate than promised. Their home was taken in 2012. (Katie G. Cotterill and Lauren Frohne / The Seattle Times)
Berkshire Hathaway, the investment conglomerate Buffett leads, bought Clayton in 2003 and spent billions building it into the mobile-home industry’s biggest manufacturer and lender. Today, Clayton is a many-headed hydra with companies operating under at least 18 names, constructing nearly half of the industry’s new homes and selling them through its own retailers. It finances more mobile-home purchases than any other lender by a factor of six. It also sells property insurance on them and repossesses them when borrowers fail to pay.

Copy and paste the link above and read the rest of the story…..

He’s no philanthropist, he’s a loan shark!

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s