by Bud Meyers, published April 7, 2015
(* Editor’s note: This is from a joint investigation of The Center for Public Integrity and The Seattle Times)
Clayton-owned mobile home dealerships with different names and similar banners offer to “BEAT OR MATCH ANY DEAL.” Customers say theythought they were comparison shopping, when they were really visiting multiple Clayton-owned dealerships — all owned by one company, which is owned by another company, which is owned by one of America’s richest men.
The U.S. second richest man, Warren Buffett, owns Berkshire Hathaway, which owns Clayton, the mobile home industry’s biggest manufacturer and lender. Clayton is a many-headed hydra with companies operating under at least 18 names. It also sells property insurance on their mobile homes — and repossesses them when borrowers fail to pay.
Berkshire Hathaway extracts value at every stage of the process. Clayton even builds the homes with materials supplied by other Berkshire subsidiaries. And Clayton borrows from Berkshire to make mobile home loans, paying up to an extra percentage point on top of Berkshire’s own borrowing costs.
Clayton customers described a consistent array of deceptive practices that locked them into ruinous deals: loan terms that changed abruptly after they paid deposits or prepared land for their new homes; surprise fees tacked on to loans; and pressure to take on excessive payments based on false promises that they could later refinance. Former dealers said the company encouraged them to steer buyers to finance with Clayton’s own high-interest lenders. Those loans averaged 7 percentage points higher than the typical home loan in 2013.
Buyers told of Clayton collection agents urging them to cut back on food and medical care or seek handouts in order to make house payments. If they don’t, their mobile homes are repossessed.
Berkshire Hathaway’s Omaha headquarters sent a statement on behalf of Clayton Homes to the Omaha World-Herald (which is also owned by Berkshire Hathaway) to dispute the allegations.
(* Editor’s note: Read more about Warren Buffett’s sleazy company to see why we need more government regulation, not less, as the Republicans always want.)