WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Vanderbilt Mortgage & Finance, Inc., alleging that the company engaged in predatory lending practices that trapped families in unaffordable loans for manufactured homes.
According to the CFPB, Vanderbilt ignored clear indications that many borrowers lacked the financial means to repay their loans. By allegedly disregarding red flags such as low incomes, excessive debt, and unrealistic estimates of living expenses, Vanderbilt approved loans that left borrowers struggling to meet basic needs. The Bureau contends that these practices forced some families into delinquency, penalties, and eventually foreclosure, with some losing their homes altogether.
“Vanderbilt knowingly traps people in risky loans in order to close the deal on selling a manufactured home,” said CFPB Director Rohit Chopra. The CFPB aims to halt Vanderbilt’s alleged misconduct and secure relief for affected homeowners.
Manufactured homes, often a critical source of affordable housing for low-income and rural residents, can present financial challenges. Borrowers frequently face higher interest rates and fewer refinancing options compared to traditional mortgages. The CFPB alleges that Vanderbilt exacerbated these challenges by neglecting its legal responsibility to verify borrowers’ ability to repay loans.
Among the allegations, the CFPB claims Vanderbilt made loans to borrowers with insufficient income, used artificially low estimates of living expenses to inflate affordability, and in some cases violated its own lending policies. For example, one borrower, a single mother with two dependents, missed mortgage payments just months after Vanderbilt approved her loan despite its own underwriting criteria showing she could not afford the home.
The lawsuit accuses Vanderbilt of violating the Truth in Lending Act and Regulation Z. The CFPB is seeking to stop the alleged illegal practices, obtain restitution for harmed consumers, and impose civil penalties to be paid into the agency’s victim relief fund.
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