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Clayton Homes vs Buzzfeed

Reporting Mischaracterizes Clayton Homes' Treatment of Customers and Employees
Company Serves Underserved Markets, Making Homeownership Affordable

We categorically and adamantly deny discriminating against customers or team members based on race or ethnicity as Dan Wagner and Mike Baker insinuate in an article published by The Seattle Times and BuzzFeed. 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.

Gawker chimes in.


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Race and ethnicity are never considered in pricing or structuring our loans. Our policies, procedures, and training prohibit racial discrimination in our lending and servicing operations. A borrower's income is not a factor in determining the specific interest rate for which they qualify - whether they make $35,000 or $75,000. It is, however, a significant consideration in the company's analysis of the borrower's ability to repay the loan. The article further mischaracterizes our interest rates because of the reporters' reliance on raw data that ignores important factors that determine a borrower's rate, including credit score, down payment, loan size, collateral, and land type. When these factors are taken together, there is a more accurate picture of interest rates. For example, in 2015, for borrowers with credit scores less than 600, who chose to purchase a home-only placed on private land, and borrowed less than $50,000, the average note rate from Vanderbilt Mortgage was the same for white and non-white borrowers. For borrowers with credit scores greater than 720, the average note rate for non-white borrowers was 0.07% less than that for white borrowers. Additionally, none of our rates exceed state or federal high-cost mortgage loan caps, and these loans had fixed rate and fully amortizing loan terms - not the risky loan features that contributed to the housing crisis.


Regardless of income amount or credit characteristics, we perform a rigorous underwriting process to determine that every borrower has the reasonable ability to repay the loan - including analysis and third-party verification of income and debts. We analyze residual income after payment of debts and customary living expenses (e.g., food, clothing, gas, medical costs). We seek to make sure that every borrower - regardless of race or ethnicity - can repay the loan. We do not want anyone to buy a home they cannot afford. When a loan repossesses, everyone loses. Because we hold nearly all of the loans we originated on our books, we share in that loss with the customer. This is why our servicing practices are geared toward keeping customers in their homes, and it works. Over the past 12 months, over 97% of customers have made their payments and many pay their loans off in full early.


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