> Warren Buffett Blog: Warren Buffett on Clayton lending role in helping people

Monday, May 18, 2015

Warren Buffett on Clayton lending role in helping people

According to Warren Buffett, many of Clayton's lending customers pose higher risk for lending, so therefore charging them higher interest rates was justified.

I make no apologies whatsoever about Clayton's [alleged predatory] lending terms. It's true that manufactured housing hits the lower end of the market. The main question is whether a company can make sensible loans to people so that they can continue making those payments and keep their houses. In that regard, Clayton has been "exemplary".


If we make a mistake, it hurts them and it hurts us, and that is a very unusual arrangement in the financial industry.

Buffett explains the main causes for loan default are - job loss, divorce and death.

That happens with high-priced houses as well. It happens more often with people who are living closer to the edge, but I don't think that's a reason to deny them a house.