A company that provides financing for manufactured homes has agreed to refund $2.8 million to North Carolina homeowners and pay a $750,000 civil penalty in response to an investigation by the state's Office of the Commissioner of Banks.
In agreeing to the consent order, Vanderbilt Mortgage and Finance did not admit to the violations identified by the NCOB in its investigation.
Instead, the company has agreed to amend its existing practices and implement new controls over how it collects debt from its borrowers.
The consent order also requires Vanderbilt to make a $250,000 contribution to the State Foreclosure Prevention Project.
Vanderbilt is owned by Warren Buffett's firm Berkshire Hathaway and is based in Maryville, Tenn. The company has offered financing to more than 270,000 homeowners, many through its relationship with national builder Clayton Homes.
Manufactured housing represents 15 percent of all housing in North Carolina.
The NCOB's news release announcing the order explained how lenders have changed their approach to manufactured housing in recent years, which has put them under the supervision of NCOB.
In the past, lenders treated manufacturing home loans like a car loan, with the loan being secured by the manufactured home itself. Lenders have, of late, however, started to do deals involving both the homes and the land underneath.
The manufactured home is attached to property, titled as real estate, and secured by a mortgage.
"These mortgages are and have always been subject to all of North Carolina’s mortgage laws," the NCOB noted.
"Moreover, due to recent changes in mortgage licensing laws, individuals who solicit or accept applications to finance manufactured homes must be licensed and supervised by NCCOB, regardless of whether or not these home loans are secured by land."