The articles are very similar. It makes sense to me. They are saying Clayton is abusing the poor. They sell them overpriced mobile homes at high rates, often with last minute substantial rate changes, push them (or build it into the loan) to use related Clayton companies for overpriced insurance, etc. Of course Clayton hopes the buyer makes every payment on their depreciating home, but if they don't they get the benefit of having done the loan as personal property instead of real estate. This allows for quick repossession. They fix it up and try and sell it to another sucker at a much higher price. Wash, rinse, repeat.
So in other words, what Buffett says about Clayton doesn't match up at all with how Clayton operates. It presents itself as helping the poor person get a an affordable home, but in reality it is further impoverishing them. The graph on Clayton's rates versus competitors is pretty damning. To charge on average 7% points (~ 11%) higher than a typical home loan (~4%) for a house that depreciates at about 3% per year, entraps the poor. Based on Berkshire's annual reports I would have assumed that Clayton was benefiting form a lower cost of funding, and issued loans at similar rates. These articles paint a much different story.
I too would love to hear Berkshire's response.
BTW I will go on record as predicting that Buffett's reputation is going to take a huge swing for the worse over the next 20 years.
