Clayton Homes Inc., a manufacturer and retailer of modular homes owned by billionaire Warren Buffett’s Berkshire Hathaway, allegedly forces homebuyers into more expensive mortgages offered by a Berkshire-owned lender, a move illegal under federal law, according to a recently published investigative report, The New York Post reports.
 
The lender, Vanderbilt Mortgages, allegedly charges minority buyers more for mortgages than white buyers earning less, the New York Post explained about the original story, which was published by the Seattle Times and BuzzFeed.
 
“Clayton employees regularly use racially charged language to describe black managers or minority customers, the story claims — citing interviews with more than 280 customers, employees and experts, including some Clayton insiders who said they were appalled by the company’s practices,” the Post reported.
 
Clayton, the country’s largest manufactured housing company, expanded its minority customer base to 31 percent of all its loans from 22 percent in 2008, according to the report.
 
Clayton accused the reporters of “activism masquerading as journalism,” in a statement provided to Newsmax Finance.

“We categorically and adamantly deny discriminating against customers or team members based on race or ethnicity,” Clayton said.

"Clayton Homes offers homes and financing to all Americans regardless of their race, socioeconomic status, or background. In fact, our company is committed to building on our track record of helping individuals and families from all walks of life, including people in historically underserved markets, achieve the American dream of home ownership."

For two specific categories of loans, the company said, minorities pay the same or slightly lower interest rates than whites.

Clayton has been surrounded by controversy and allegations from the Times earlier this year, after an April article by the Center for Public Integrity and the Seattle Times newspaper alleged predatory collection and lending practices, high fees and other problems at the company.

The April article said these practices led to unsuspecting borrowers getting trapped in loans they couldn’t afford.

“I make no apologies whatsoever for Clayton’s lending practices,” Buffett said in the question-and-answer session at the Berkshire Hathaway Inc. annual meeting in response to a question from a Berkshire shareholder who said he was “disgusted” that Berkshire would support unethical practices.

“Clayton has behaved very well,” Buffett said, the Wall Street Journal reported.

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