Vanderbilt Mortgage Lawsuit: CFPB Allegations and Dismissal

The Vanderbilt Mortgage lawsuit was a January 2025 enforcement action by the Consumer Financial Protection Bureau accusing the Berkshire Hathaway-owned manufactured-home lender of approving loans borrowers could not afford. The CFPB voluntarily dismissed the case with prejudice on February 27, 2025, less than two months after filing it, meaning the agency cannot bring the same claims against Vanderbilt again.¹²

What the CFPB Alleged

The CFPB filed suit on January 6, 2025, in the U.S. District Court for the Eastern District of Tennessee, before District Judge Charles E. Atchley Jr.³ The complaint alleged that Vanderbilt violated the Truth in Lending Act and Regulation Z by failing to make reasonable, good-faith determinations that borrowers could actually repay their mortgages.¹

According to the agency, Vanderbilt used artificially low estimates of living expenses that did not account for geographic cost-of-living differences and were roughly half the average of what similar applicants reported spending. The complaint cited a family with 33 debts already in collection and a single mother whose loan went to collections four months after issuance.⁴ In some cases, the agency said, Vanderbilt approved mortgages even when its own internal projections showed the borrower would not have enough income left over to cover basic living expenses after making the monthly payment.⁵ The result, the CFPB said, was late fees, penalties, home repossessions, and bankruptcies.²

How Vanderbilt Responded

Vanderbilt and its parent company, Clayton Homes, called the lawsuit “unfounded and untrue” and characterized it as “politically motivated, regulatory overreach.” The company said its underwriting exceeds legal requirements: the ability-to-repay rule permits lenders to use either a debt-to-income ratio or a residual-income test, and Vanderbilt said it uses both. It also said it applies the greater of a borrower’s actual reported expenses or an estimated living-expense figure based on family size, comparing the method to the federal VA loan program.⁶

Vanderbilt said the CFPB had examined tens of thousands of loans across six years and flagged fewer than 0.8 percent as problematic, and that many of those loans were not even delinquent. The company also said the CFPB had “regularly blessed” its underwriting in prior examinations and was now applying a standard “not addressed in the law.”⁶

Why the Case Was Dismissed

On February 27, 2025, the CFPB filed a notice of voluntary dismissal with prejudice, and the case closed the following day.¹³ Because the dismissal was with prejudice, the agency is permanently barred from refiling the same claims.²

The dismissal did not come from a court ruling on the merits. On the same day, the CFPB dropped enforcement actions against Capital One, Rocket Homes Real Estate, and the Pennsylvania Higher Education Assistance Agency, all with prejudice.⁷ The dismissals came under acting CFPB Director Russell Vought, installed after the White House fired former Director Rohit Chopra. All of the dismissed cases had been filed in the final days of the Biden administration.⁸

The Wider CFPB Pullback

The Vanderbilt dismissal was one piece of a broad retreat from enforcement. Over 2025, the CFPB dismissed or withdrew from at least 19 public enforcement actions, terminated or modified 22 pending orders, and closed roughly 40 percent of its pending investigations. The bureau said it was refocusing on “actual consumer fraud” with identifiable victims and deprioritizing cases built on what it called “novel legal theories” or cases penalizing consumers for making “wrong choices.”⁹ A CFPB spokesperson said the agency was correcting “Biden-era enforcement actions” that had been “weaponized against the American people.”¹⁰

Eric Halperin, the CFPB’s former head of enforcement, called the scale of dismissals “unprecedented” and estimated the dropped cases involved billions of dollars in potential consumer relief that would never be recovered.⁷ Lauren Saunders of the National Consumer Law Center said the dismissals “actually underscore why the CFPB’s work is so essential.”¹¹

Complaints and Reporting Before the Lawsuit

The CFPB’s own Consumer Complaint Database recorded 221 complaints with consumer narratives against Vanderbilt between December 2011 and December 2024. The most common issues were difficulty making mortgage payments (58), trouble during the payment process (47), and incorrect information on credit reports (21).⁵

A 2015 joint investigation by the Seattle Times and the Center for Public Integrity found that in 2013, 93 percent of Clayton’s mobile-home loans were classified as “higher-priced” under federal standards, averaging seven percentage points above a typical home loan, compared with 3.8 points for other lenders. The reporters also found Clayton’s lending subsidiaries rarely refinanced: despite originating more than a third of all mobile-home purchase loans between 2010 and 2013, Clayton entities accounted for well under one percent of mobile-home refinancings. Industry consultant Kenneth Rishel estimated Vanderbilt’s loan failure rate at 33 percent, against an industry average of about 28 percent.¹²

A late-2015 follow-up produced with BuzzFeed News reported allegations that Clayton targeted minority communities with higher-cost loans, a practice known as reverse redlining. Four Democratic legislators subsequently called for a federal investigation. Clayton and Berkshire Hathaway denied the allegations throughout, with Berkshire calling the reporting “activism masquerading as journalism.”¹³

Why Manufactured-Home Lending Draws Scrutiny

Vanderbilt is based in Maryville, Tennessee, and operates as a subsidiary of Clayton Homes, itself wholly owned by Berkshire Hathaway.¹⁴ Clayton is the largest manufactured-home builder in the United States, so many buyers purchase a Clayton home, finance it through a Clayton lending affiliate, and have the loan serviced within the same corporate family.

Manufactured housing is a major source of affordable housing for lower-income and older buyers. In 2022, nearly 113,000 manufactured homes were produced, about 11 percent of all new home starts, with a median buyer household income of $35,000 and an average sales price of $127,250 excluding land.¹⁴ Interest rates on manufactured-home loans run about 50 percent higher than rates on conventional housing, and many are structured as personal-property (chattel) loans rather than traditional mortgages. That means borrowers have fewer legal protections, and lenders can repossess homes far more quickly than in a standard foreclosure.¹²

As of mid-2026, the CFPB’s case against Vanderbilt remains closed with prejudice, and no new federal or state enforcement action against the company has been publicly announced.¹

1
Consumer Financial Protection Bureau. Enforcement Action: Vanderbilt Mortgage and Finance, Inc.
2
Yahoo Finance. US CFPB Dismisses Lawsuit Against Vanderbilt Mortgage
3
CourtListener. Consumer Financial Protection Bureau v. Vanderbilt Mortgage and Finance
4
NPR. CFPB Lawsuit Vanderbilt Berkshire Hathaway
5
National Mortgage Professional. CFPB Sues Vanderbilt Mortgage Trapping Borrowers Risky Loans
6
Clayton Homes. Response to CFPB Lawsuit
7
CNBC. CFPB Drops Capital One, Rocket Mortgage Affiliate Lawsuits
8
Scotsman Guide. CFPB Drops Cases Against Rocket, Vanderbilt Mortgage
9
Consumer Financial Protection Bureau. 2025 Enforcement Lookback
10
U.S. News & World Report. Trumps CFPB Has Dropped More Than 20 Cases
11
National Consumer Law Center. CFPB Abruptly Drops Enforcement Actions Against Corporations Accused of Ripping Off Consumers
12
The Seattle Times. The Mobile-Home Trap: How a Warren Buffett Empire Preys on the Poor
13
The Seattle Times. Minorities Exploited by Warren Buffetts Mobile-Home Empire
14
WUSF. CFPB Sues Berkshire Hathaway Owned Mortgage Lender for Alleged Predatory Practices