On January 6, 2025, the CFPB sued Vanderbilt Mortgage & Finance for setting families up to fail when they borrowed money to buy a manufactured home. The CFPB alleges that Vanderbilt’s business model ignored clear and obvious red flags that the borrowers could not afford the loans resulting in many families struggling to make payments.
In a statement, CFPB Director Rohit Chopra said:
“Vanderbilt knowingly traps people in risky loans in order to close the deal on selling a manufactured home. The CFPB’s lawsuit seeks to not only protect homebuyers, but also honest lenders helping people to finance the purchase of an affordable home.”
Vanderbilt Mortgage & Finance, Inc. is a nonbank financing company that originates loans for manufactured homes across the US. The company originates mortgages for the purchase of manufactured homes that are built and sold by Vanderbilt-affiliated companies.
The CFPB alleges that Vanderbilt failed to make reasonable, good-faith determinations of borrowers’ ability to repay loans, as legally required. Specifically, the lawsuit alleges Vanderbilt:
Manipulated lending standards when borrowers did not make sufficient income. Vanderbilt often ignored evidence of borrowers lacking sufficient income or assets to afford their mortgage and essential expenses. They even approved loans for struggling families, exacerbating their financial situations. For instance, one family with 33 debts in collection and two young children fell behind on their mortgage just eight months after approval.
Fabricated unrealistic estimates of living expenses. Vanderbilt used artificially low estimates of living expenses, about half of those reported by similar loan applicants, to justify its determination that borrowers could afford loans. This left families with minimal buffers for unexpected expenses; for instance, one family of five had only $57.78 in net income after accounting for living costs, resulting in their first missed payment just a year after signing the mortgage.
Made loans to borrowers it projected could not pay. Vanderbilt violated its policy by approving loans for borrowers who lacked sufficient income to cover mortgages and living expenses. For instance, they approved a mortgage for a single mother with two dependents, despite knowing her income was inadequate. After she missed a payment four months later, her loan was sent to collections.
The CFPB’s lawsuit seeks to stop the company’s unlawful conduct, provide redress for harmed consumers, and impose civil money penalty.
Read the CFPB’s press release here.
The full complaint can be found here.