It’s no surprise that Clayton Homes has become the biggest mobile-home manufacturer in the country. The company offers a wide variety of products, including mobile homes, modular and traditional site-built homes. But many customers complain that the company uses predatory tactics to get them into unaffordable loans.
According to the Center for Public Integrity, Clayton Homes has been accused of using deceptive sales tactics to lure consumers into loans they can’t afford. Some customers claimed that they were pressured into taking out loans with unaffordable interest rates and other fees. Moreover, they were misled into believing that Clayton financing was the only option.
This company is owned by Berkshire Hathaway, one of the largest investment conglomerates in the world. They bought Clayton in 2003. After reading founder Jim Clayton’s memoir, Buffett offered to buy the company.
Buffett has a reputation as a shrewd investor and financial sage. But in 2004, he found out that Clayton was engaging in predatory practices. Buffett called it “a mistake” and warned lenders to demand a significant down payment from borrowers. In addition, Buffett advised lenders to limit the length of home loans to 20 years or less.
Buffett and his Berkshire team purchased Clayton Mobile Homes, which are delivered to homeowners anywhere in the United States. However, the company’s business model relies on inflated interest rates and exorbitant fees. As a result, fewer than half of its new mobile-home loans met the federal standards for disclosure.
Warren Buffett and his Berkshire team bought Clayton Mobile Homes in 2003. During the Great Recession, Clayton was profitable. Even as the housing market fell, the company grew, and a majority of its sales came from the mobile-home industry.
Clayton has been named as one of the top small companies in the United States by Forbes for several years in a row. In addition to building high quality homes, Clayton helps its clients find land for their dream homes. Homeowners looking to cut energy costs can also benefit from the company’s modular and custom upgrades.
When you buy a Clayton home, the company provides a one-year warranty on the home. This covers defects in the manufacturing process and in the materials used during installation. The warranty can also cover damage to appliances and plumbing systems.
Clayton Mobile Homes are sold through hundreds of retailers across the nation. Clayton also sells property insurance for mobile homes. And the company donates money to veterans’ foundations. Additionally, it has received certifications such as ISO 14001: Green Building Standards.
Clayton Homes has been awarded the MHI Retailer of the Year for eleven consecutive years. The company has an average 4.1 star rating from Consumer Affairs. Lastly, the company has a Better Business Bureau rating for branded products.
Clayton is also the nation’s biggest lender of mobile-home loans. In 2013, Clayton provided more than half of the new mobile-home loans in eight states. In fact, Clayton loans were 7 percentage points higher than the typical home loan.