Mobile-home buyers can become trapped in underwater loans that don’t reach a break-even point for many years.
The interactive chart below shows how exorbitant interest rates and costly fees create a punishing repayment schedule, while depreciation of the mobile home causes its resale value to drop sharply over time. With loan balances that can soon become much higher than the value of the home, borrowers find it almost impossible to sell the home or refinance out of a loan that can have interest rates comparable to a credit card.
Clayton Homes, a company controlled by Warren Buffett’s Berkshire Hathaway, dominates the mobile-home industry’s manufacturing, retailing and lending. And its lending rates are particularly costly.
In an investigative story about Clayton, reporters detailed the cases of Clayton customers Kirk and Patricia Ackley, Dorothy Mansfield and Tiffany Galler.
Explore their loan terms, or customize the chart to see how different scenarios play out over time.