Submitted by Mike Krieger via Liberty Blitzkrieg blog,
It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.
– Warren Buffett
BuzzFeed News/The Seattle Times [6] has just published a hard-hitting, extremely sickening investigative report which shines further light on the shady and unethical practices of Warren Buffett. A man who I have often referred to as the greatest American actor alive for his uncanny ability to convince the general public that he’s just a kind, philanthropic grandfatherly figure, when in reality he is a ruthless, cunning, parasitic loanshark.
The latest Buffett expose relates to his Berkshire Hathaway owned mobile home company Clayton Homes. I’ve covered this previously, most recent in April’s post, Warren Buffett the Slumlord – Predatory Loans, Kickbacks and Preying on the Poor at Clayton Homes [7]. Here’s an excerpt:
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 [8] has found.
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.
Former dealers said the company encouraged them to steer buyers to finance with Clayton’s own high-interest lenders.
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.
Today’s article confirms all of the above and adds another element; the intentional targeting of minorities and poor people. These groups are particularly attractive to Clayton, because it then charges them higher interest rates regardless of income. But don’t take my word for it…
He walked them through Clayton-built homes on the lot, then into the sales center, passing a banner and posters promoting one subprime lender: Vanderbilt Mortgage, a Clayton subsidiary. Inside, he handed them a Vanderbilt sales pamphlet.
“Vanderbilt is the only one that finances on the reservation,” he told the women.
His claim, which the women caught on tape [9], was a lie. And it was illegal.
In minority communities, Clayton’s grip on the lending market verges on monopolistic: Last year, according to federal data [10], Clayton made 72% of the loans to black people who financed mobile homes.
The company’s in-house lender, Vanderbilt Mortgage, charges minority borrowers substantially higher rates, on average, than their white counterparts. In fact, federal data shows [10] that Vanderbilt typically charges black people who make over $75,000 a year slightly more than white people who make only $35,000.
Through a spokesperson earlier this month, Buffett declined to discuss racial issues at Clayton Homes, and a reporter who attempted to contact him at his home was turned away by security…
She continued to raise concerns, writing in an email to Clayton’s director of marketing that when she spoke to new borrowers, “there were many things they were not made aware about during the sale.”
Managers and executives, she said, dismissed her concerns; she recalled one replying, “It doesn’t really matter as long as we get the money.”
Read more here at The Buzzfeed article: Warren Buffett’s Company Wants to Sell You a Mobile Home [11]
Here’s what the Warren Buffet Slumlord Lifecycle looks like:
[11]
Arriving at Clayton’s Maryville, Tennessee, headquarters each morning, collection workers and their colleagues shuffle past a poster [12] of Warren Buffett pointing to his “rule of thumb.”
“I want employees to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper — to be read by their spouses, children and friends — with the reporting done by an informed and critical reporter,” it reads.
“I’d pass by that and I was just like, are you kidding me?” said Schablik, the Spanish-speaking employee who, until last year, worked as a Clayton collector and handled borrowers’ bankruptcies.
At first, Vanderbilt collection agents — often young, white college students or recent grads — are trained to do things by the book, Schablik and four current and former collectors said. But when these new agents begin working the phones, they said, managers pressure them to be “mean” or “condescending,” for example telling customers behind in their payments to cut back on groceries or forgo medical care.
Read more here at The Seattle Times... [6]
Merry Christmas Serfs
Of course, this is just the tip of the iceberg when it comes to Warren Buffett. For more on who this man really is, see:
Two Trains Derail in Wisconsin Shortly After Warren Buffett’s BNSF Beats Back Railroad Regulations [13]
No Capital Controls for Oligarchs – Warren Buffett Buys Greek Island [14]
Warren Buffett the Slumlord – Predatory Loans, Kickbacks and Preying on the Poor at Clayton Homes [7]
More Hypocrisy from Warren Buffett as He Structures Deal to Avoid $400 Million in Taxes [15]
Crony Capitalist “Uncle” Warren Buffett Drives Company Profits Using Derivatives [16]
