CFPB sues Warren Buffett-backed mortgage lender for ignoring ‘red flags’
The Consumer Financial Protection Bureau filed a lawsuit against a mortgage lender owned by Warren Buffett’s Berkshire Hathaway. The watchdog alleges Vanderbilt Mortgage and Finance steered customers to buy manufactured homes they couldn’t afford.
Vanderbilt Mortgage and Finance is a subsidiary of Clayton Homes, the nation’s largest builder of manufactured homes. Clayton Homes is a subsidiary of Berkshire Hathaway.
“Vanderbilt knowingly traps people in risky loans in order to close the deal on selling a manufactured home,” CFPB Director Rohit Chopra said in a statement.
The lawsuit said underwriters “ignored clear and obvious red flags” that certain customers would not be able to repay their loans.
“The CFPB’s lawsuit is unfounded and untrue, and is the latest example of politically motivated, regulatory overreach,” Vanderbilt said in a statement to Straight Arrow News. “Vanderbilt Mortgage’s underwriting processes exceed the legal requirements for assessing a borrower’s ability to repay loans by considering both monthly debt-to-income ratio and residual income, while the law only requires the use of one or the other.”
“The core allegation is that Vanderbilt is using an estimate of other expenses that is too low,” said Howard Beales, formerly the director of the Federal Trade Commission’s Bureau of Consumer Protection. “Now, according to the complaint, they only use that estimate when the consumer says either they have no expenses, which is unlikely, or when Vanderbilt’s estimate is higher than what the consumer reported.”
In the lawsuit, the agency details troubled lending situations to make its case. In one instance, CFPB said Vanderbilt approved a loan to co-applicants with 33 debts in collection, insufficient assets to pay those debts and two young children. CFPB said Vanderbilt assumed unreasonably low monthly living expenses. The borrowers fell behind on payments eight months after getting their mortgage.
Vanderbilt claims CFPB looked at tens of thousands of loans and identified “less than 0.8 percent” that may have raised flags. CFPB did not detail a percentage in its lawsuit.
“I didn’t see anything in the complaint that would have led me to bring this case,” said Beales, who now serves as professor emeritus of Strategic Management and Public Policy at George Washington University. “Bad actors have much higher rates of bad loans than that. Default rates in the subprime mortgage crisis were 20% and 30%, 0.8% is nothing.”
Manufactured homes accounted for around 11% of new home builds in 2022, according to the Manufactured Housing Institute, a trade group in the space. The average household income for buyers was $35,000, while the average price of a manufactured home was just over $127,000, not accounting for the price of the lot it sits on.
“The population that’s interested in buying manufactured housing is likely to be lower income and higher risk than the population of people who buy stick-built houses, and that’s going to lead to higher interest rates simply because of the credit risk,” Beales said. “And in fact, the essence of the CFPB charge here seems to be these loans were too cheap. They should have charged more or not made them at all.”
Clayton Homes and Vanderbilt previously received negative attention for lending practices in 2015. A report from The Seattle Times found the company targeted minority customers and charged them higher interest rates than similarly qualified white borrowers.
At that time, Buffett said he wasn’t going to make any apologies for the manufactured home’s lending practices.
“Clayton follows a pattern that actually is exemplary and rather extraordinary,” Buffett said in 2015. “We have no interest in selling anybody a house and having the mortgage default because it is a net loss to us, is a net loss to the customer.”
In 2016, a group of Democratic lawmakers wrote a letter to then-Attorney General Loretta Lynch and then-CFPB Director Richard Cordray asking their respective agencies to investigate Clayton Homes’ lending practices.
In this current lawsuit, CFPB is asking the court to stop Vanderbilt from making allegedly bad loans and pay civil penalties.
ExxonMobil countersues Calif. AG, claims he defamed the company
ExxonMobil is countersuing California months after the state sued the oil and gas giant, claiming it lied about plastics recycling. Now, the company accused California’s attorney general, Rob Bonta, of defamation saying, he engaged in “a deliberate smear campaign.”
Bonta filed a lawsuit against the company in September 2024, asking that it pay civil penalties and fines after a more than two year investigation. He said it was time to hold it accountable for misleading marketing campaigns.
Bonta alleged the company tried to convince the public that plastic recycling could solve the plastic waste and pollution problem, when it clearly knew that wasn’t possible, resulting in landfills and oceans being filled with plastic waste.
ExxonMobil is accusing Bonta of making false statements in interviews about its recycling technology, causing prospective business deals to fall apart. The company is seeking monetary damages and retractions from the AG, as well as from four environmental groups also named in the lawsuit.
The Sierra Club, San Francisco Baykeeper, Heal the Bay and the Surfrider Foundation all filed their own lawsuit against Exxon, coinciding with Bonta’s lawsuit.
A spokesman for the Sierra Club, Jonathon Berman, called the suit “a shameless attempt at intimidation.”
A spokesperson for California’s Department of Justice said the lawsuit is “another attempt from ExxonMobil to deflect attention from its own unlawful deception” adding that Bonta looks forward to fighting the case.
Meanwhile, Exxon maintains that its recycling technology is not a “farce” or a “myth.”
A recent report from the advocacy group Center for Climate Integrity said that recycling plastics failed because it was too expensive to do on a large scale, with the recycling rate for plastic estimated to only be 5% or 6% as of 2021.
Critics condemn Biden’s last-minute push to lower cigarette nicotine levels
With less than two weeks left for the Biden administration, a regulatory review proposed cigarette nicotine levels be mandated and lowered. The plan aims to get accolades from anti-tobacco advocates on American streets.
However, others interpreted the move as a cigarette ban that would exacerbate the black market.
The proposal cleared an Office of Management and Budget review last week. Food and Drug Administration Commissioner Robert Califf has until Jan. 20 to issue the rule.
Public health advocates believed setting a nicotine standard would be a positive step forward as there currently are no limits.
Cigarettes impact on health
According to a recent National Health Interview Survey, 11.6 % of American adults smoke cigarettes.
CDC figures showed an estimated 480,000 Americans die every year due to tobacco use. Cigarettes are a leading cause of preventable death.
In 2022, Califf said that lowering nicotine levels would decrease the likelihood of future generations becoming addicted to cigarettes and help current smokers quit.
Critics condemn proposal
Critics of the proposal said it would cause current smokers to use more cigarettes to compensate for lower nicotine levels, further harming their health. They claim it’s going to keep America smoking and make the streets more violent.
Opponents also estimated the black market for cigarettes would be in the tens of billions of dollars.
Many cigarette users have already transitioned to other nicotine delivery options that are believed to pose fewer health risks, such as e-cigs.
It remains to be seen if the Food and Drug Administration will issue the new rule before the Biden administration ends. After a public comment period, the incoming Trump administration will then make the final decision.
CNN on trial for defamation as legacy media faces growing challenges
CNN is facing a defamation lawsuit in a Florida courtroom during the week of Jan. 6, after airing a segment about private contractors allegedly exploiting Afghans during the U.S. withdrawal from Afghanistan in 2021. A Navy veteran featured in the piece is suing the network, claiming CNN sensationalized the story, which led to damage to his image and business.
The segment focused on private contractors allegedly charging large sums of money to help Afghans flee the country amid the Taliban’s return. CNN’s reporter referred to these evacuations as “black market” operations.
Zachary Young, the only contractor mentioned by name in the segment, filed the lawsuit, saying CNN falsely accused him of illegal activity and turned him into an “international pariah.”
Young’s lawyer called the segment “a hit piece,” claiming CNN “wanted to tell America a more sensational story.” His lawyers also claim CNN had unfairly painted Young as a villain.
The lawyer said that Young went from being a patriot to being labeled a criminal and that CNN’s “reckless reporting” destroyed his career.
Young maintains that he never accepted money from individual Afghans but was paid by sponsors and corporations, such as Audible and Bloomberg, to help evacuate more than a dozen people from Afghanistan.
CNN’s lawyer, however, argued that the report was accurate. During the trial, the network’s attorney told the jury, “Every word you are going to see from CNN’s reporters was true and was accurate. There is no evidence in this case that there was anything sensational in the story.”
Young’s lawyer also introduced text messages from CNN reporters and editors obtained through the lawsuit. In the texts, reporters referred to Young as having a “punchable face” and mocked him. Young testified that being labeled a criminal was devastating, especially for someone like him who works in private security, where discretion is paramount.
Five months after the segment aired, CNN issued an on-air apology, stating its use of the phrase “black market” was wrong and clarifying that it did not intend to suggest Young was involved in illegal activities.
This case highlights the growing challenges faced by traditional media in an era marked by misinformation, media mistrust and calls for greater accountability. With declining viewership, revenue and increasing competition from digital platforms, legacy media outlets like CNN are navigating a rapidly changing landscape.
The defamation lawsuit could further damage CNN’s image, as internal communications and behind-the-scenes operations become part of the trial.
Defamation cases against media outlets are rare due to strong U.S. protections for the press, often resulting in dismissals or settlements. Just last month, ABC paid $15 million to settle a defamation lawsuit brought by former President Donald Trump. In 2023, Fox News settled a high-profile libel case with Dominion Voting Systems for $787 million.
CNN’s defamation trial is expected to last two weeks.
MoviePass ex-CEO pleads guilty to fraud over ‘unlimited’ plan
The former CEO of MoviePass, Ted Farnsworth, pleaded guilty Tuesday, Jan. 7, to fraud for lying to investors about the success of the company. Now, he faces up to 25 years in prison.
The subscription service gained a lot of attention in 2017, promising unlimited access to movies at theaters for just $9.95 a month. But that proved to be unattainable, despite reaching a peak of 3 million subscribers in 2018, with the company eventually filing for bankruptcy in 2020.
According to the Justice Department, Farnsworth, who’s been in federal custody since August 2023, falsely claimed the plan for the company was tested, sustainable and would be profitable, or at least break even on subscription fees alone. Now, he’s accused of knowing all along that the $9.95 unlimited price was a temporary marketing gimmick intended to attract new investors.
Farnsworth also pleaded guilty to conspiracy to commit securities fraud as the leader of another publicly traded company, Vinco Ventures, Inc. Prosecutors said he tried to inflate its stock price and took millions of dollars from the company for himself.
He faces five years on this count and another 20 for MoviePass. A sentencing date hasn’t been set yet.
As for MoviePass, the company has new management, and a new business model, with plans to relaunch at some point, but no specific timeline has yet been released.
Controversy follows Meta’s move to roll back some rules on hateful content
Meta is making some sweeping changes to its policy on what Facebook and Instagram users can and cannot post. On Tuesday, Jan. 7, the company not only announced it is doing away with professional fact-checking and replacing it with community notes but it also made updates to its hateful conduct policy, rolling back some content restrictions.
For example, the company removed a line in its policy that prohibited “dehumanizing speech” in the form of “certain objects” – including “women as household objects or property or objects in general; Black people as farm equipment; and transgender or non-binary people as ‘it.’”
Meta did, however, amend a different part of the policy related to “harmful stereotypes historically linked to intimidation or violence” to ban comparing Black people to farm equipment.
The company added a new section to the policy allowing “allegations of mental illness or abnormality when based on gender or sexual orientation,” saying transgenderism and homosexuality are both highly debated topics in politics and religion.
Meta also eliminated a ban that prohibited people from saying transgenderism does not or should not exist.
The company also got rid of a ban on blaming the COVID-19 pandemic on Chinese or Asian people. The now-deleted policy had told users not to post “content targeting a person or group of people on the basis of their protected characteristics with claims that they have or spread the novel coronavirus, are responsible for the existence of the novel coronavirus, or are deliberately spreading the novel coronavirus.”
Additionally, Meta is adjusting its automated systems that scan for policy violations, which the company says resulted in “too much content being censored that shouldn’t have been.” The systems will now only focus on extreme violations, such as child sexual exploitation and terrorism.
The changes follow allegations from President-elect Donald Trump and other Republican lawmakers that Meta was “censoring” conservatives. President-elect Trump responded Tuesday to the news of Meta’s policy changes.
“I watched their news conference, and I thought it was a very good news conference,” he said. “I think they’ve, honestly, I think they’ve come a long way. Meta. Facebook. I think they’ve come a long way. I watched it, the man [Mark Zuckerberg] was very impressive.”
Critics of the new policy changes say they’ll likely lead to more hate speech and more false claims going viral.
Wildfires force thousands to evacuate Southern California
Three massive wildfires are burning out of control in Southern California, putting thousands of homes at risk. And President-elect Donald Trump shares his plans to acquire Greenland, the Panama Canal and bring Canada as the 51st state. These stories and more highlight your Unbiased Updates for Wednesday, Jan. 8, 2025.
Southern California wildfires force thousands to evacuate
Three separate wildfires are burning in the Los Angeles, California, area, and there is no end in sight, as strong winds are fueling the flames. The most extreme of the three is the Palisades Fire, which spans nearly 3,000 acres and has already forced 30,000 residents to evacuate.
Cities surrounding Pacific Palisades, including Malibu, issued evacuation orders. Officials there told all residents to prepare to leave their homes, whether they were under evacuation orders or not since the inferno was moving so quickly.
All hands are on deck to fight the #PalisadesFire in Southern California. California is deeply grateful for the brave firefighters & first responders battling the blaze.
We will continue to mobilize resources and support local communities as they respond to this severe weather. pic.twitter.com/JZrYy85e4z
The neighboring city of Santa Monica also issued an evacuation order for the northern part of the city. It also closed the area to the public, warning of an immediate threat to life.
As thousands of firefighters continue to battle the flames, authorities work to find the fire’s cause.
A second wildfire, dubbed the Eaton Fire, burns near Pasadena. A city spokeswoman said it has “created its own firestorm” with flying embers igniting at least a dozen other spot fires.
So far, the Eaton Fire has consumed about 1,000 acres. It engulfed homes and forced more than 100 people to evacuate from a nursing home — some in wheelchairs and on gurneys. A federal disaster declaration is now in effect for the Eaton Fire.
Crews are also battling the Hurst Fire about 100 acres in the San Fernando Valley, which is in the northern part of Los Angeles County. The Hurst Fire also prompted evacuation orders.
The Los Angeles County canceled schools in 19 districts Wednesday, Jan. 8. Plus, more than 200,000 people are without access to power, either because of the powerful Santa Ana winds or because a utility provider turned off electricity to prevent additional fires.
The forecast called for the winds to continue for days, producing gusts that could top 100 miles per hour in the mountains and foothills.
Biden administration asks federal appeals court to block 9/11 plea deals
The Biden administration asked a federal appeals court to block a plea agreement for accused 9/11 mastermind Khalid Sheikh Mohammed. The controversial deal would spare Mohammed from the death penalty for his role in planning the terror attacks on the World Trade Center and Pentagon on Sept. 11, 2001.
The deadly attack rocked the U.S. and began the war on terrorism.
In court filings Tuesday, Jan. 7, the Justice Department argued the government would be irreparably harmed if the guilty pleas were accepted for Mohammed and two co-defendants in the 9/11 attacks.
It said the government would be denied a chance for a public trial and the opportunity to “seek capital punishment against three men charged with a heinous act of mass murder that caused the death of thousands of people and shocked the nation and the world.”
The Defense Department negotiated and approved the plea deal but later revoked it.
However, attorneys for the defendants argued the deal was already legally in effect and that U.S. Defense Secretary Lloyd Austin, who began the administration’s efforts to throw it out, acted too late.
Mohammed is set to enter his guilty plea on Friday, Jan. 10, if the appeal is not granted. His co-defendants, accused of lesser roles in 9/11, are due to enter theirs next week.
Harris, Johnson deliver eulogies for President Jimmy Carter
The 39th president died last week at the age of 100.
Carter’s body had been lying in repose since Saturday, Jan. 5, at the Carter Presidential Center in Atlanta before being transported Tuesday morning to Washington D.C.
Vice President Kamala Harris and Republican House Speaker Mike Johnson each delivered a eulogy during Tuesday’s ceremony
“We all know that his care for humanity didn’t stop at building homes,” Johnson said. “In the face of illness, President Jimmy Carter brought lifesaving medicine. In the face of conflict, he brokered peace. In the face of discrimination, he reminded us that we are all made in the image of God. If you were to ask him why he did it all, he would likely point to his faith.”
Harris highlighted Carter’s faith. She said, “James Earl Carter, Jr. loved our country. He lived his faith. He served the people. And he left the world better than he found it.”
Carter’s body will lie in state through Thursday morning, Jan. 9, and then be taken to the National Cathedral for a state funeral. Biden is expected to deliver a eulogy.
Trump suggests using military, economic force to expand America
In a wide-ranging press conference from Mar-a-Lago on Tuesday, President-elect Donald Trump touched on a bunch of topics, including a $20 billion foreign investment to build data centers in the U.S. He also talked about his plans to revoke Biden’s recent ban on offshore oil and natural gas drilling as well as expansion strategies for the United States.
Trump reiterated his goals of acquiring the Panama Canal, which has been under Panama’s sole control since 1999, and Greenland, a territory of Denmark.
Trump’s son, Donald Trump Jr., is leading an American delegation currently in Greenland, though the country’s prime minister said he is there as “a private individual.”
The Prime Minister of Denmark Mette Frederiksen responded to Trump’s remarks Tuesday, saying Greenland was not for sale.
Greenlandic Prime Minister Múte Egede reiterated this point, saying “Greenland belongs to the Greenlanders. Our future and fight for independence is our business.”
A reporter asked the president-elect if he can assure that he would not use any military force to take control of either the Panama Canal or Greenland.
“I can’t assure you, you’re talking about Panama and Greenland,” Trump replied. “No, I can’t assure you on either of those two but, I can say this we need them for economic security. The Panama Canal was built for a military. I’m not going to commit to that now.”
In response to those remarks, the prime minister of Denmark called the United States its country’s “closest ally” and did not believe the U.S. would use any force to secure Greenland. Panama’s foreign minister repeated earlier comments from the country’s president that the sovereignty of the Panama Canal is not negotiable.
“[I’d use] economic force because Canada and the United States — that would really be something,” he said. “You get rid of that artificially drawn line, and you take a look at what that looks like. It would also be much better for national security. Don’t forget, we basically protect Canada.”
Outgoing Canadian Prime Minister Justin Trudeau issued his response in a post on X saying, “There isn’t a snowball’s chance in hell that Canada would become part of the United States.”The president-elect also spoke of one more geographical goal of his in the upcoming term: to rename the Gulf of Mexico the Gulf of America, saying it “has a beautiful ring to it.”
Not long after his remarks, Republican Rep. Marjorie Taylor Greene of Georgia said she directed her staff to begin drafting legislation for the name change.
Police: Former soldier used AI to plan Las Vegas Cybertruck explosion attack
New details are emerging about the man who blew up a Tesla Cybertruck outside Trump Hotel in Las Vegas on New Year’s Day. Las Vegas police said Tuesday the attacker used generative AI, including ChatGPT to plan the attack.
An investigation into former soldier Matthew Livelsberger, 37, found his search history on ChatGPT included questions about firearms and explosives. Straight Arrow News reporter Lauren Taylor has more details on the investigation into the Cybertruck explosion.
Girl Scout cookie season begins, 2 flavors discontinued
Girl Scout cookie season has arrived. The annual tradition is meant to teach young girls about entrepreneurial skills through selling boxes of cookies.
Almost everyone has a favorite, of course, but if yours is Girl Scout S’mores or Toast-Yay! Cookies — bad news. The Girl Scouts plan to retire those two flavors later this year.
The organization said discontinuing those two flavors may lead to something new and delicious.
Trump announces Emirati businessman’s $20 billion investment in US data centers
President-elect Donald Trump revealed a major foreign investment into the United States economy Tuesday, Jan. 7, in an effort to keep up with the fast-moving advancements of artificial intelligence. Trump introduced Emirati businessman Hussain Sajwani, the founder of DAMAC Properties, announcing the company is investing $20 billion to build data centers for AI and cloud storage across the U.S.
“We’re very, very excited now with his leadership and his open strategy and policy to encourage businesses to come to the U.S. For the last four years we’ve been waiting for this moment,” Sajwani said at a news conference with Trump.
Sajwani’s pledge is the latest in foreign business leaders promising to invest in the U.S. as a result of Trump’s election victory.
Last month, the Japanese CEO of Softbank, Masayoshi Son said he will invest $100 billion in the U.S. creating 100,000 over the course of Trump’s second term.
Sajwani said he may eventually double the $20 billion investment as big tech companies race to set up data centers, which are essential for powering AI applications including OpenAI’s ChatCPT and Google’s Gemini.
The challenge is that they require a massive amount of power to operate nonstop. Many companies are now striving to keep their facilities going using primarily clean energy including solar and wind power and developing more nuclear power.
Several companies are also working to implement advanced cooling systems that don’t drain as much power.
Management consulting firm McKinsey & Company estimates global spending on data centers is likely to surpass $250 billion by 2030.
Microsoft recently said it will spend about $80 billion this year to ramp up its AI capacity.
Wolfgang Puck’s Vegas restaurant reopens after health code violations
Foodies on the Las Vegas Strip looking for a bite to eat at Wolfgang Puck’s restaurant were out of luck this past weekend. The Southern Nevada Health District closed down Wolfgang Puck Bar & Grill at the MGM Grand after an inspection Thursday, Jan. 2.
According to the Las Vegas Review-Journal, the health department found multiple health code violations. Officials said the routine inspection discovered violations relating to inadequate pest control and food safety measures. The closure not only covered the restaurant but also the prep kitchen, butcher shop, bar, server station, exhibition kitchen and the hot line — where the main cooking takes place.
The department issued 42 demerits in total to Puck’s multiple operations, though the bar and server were not among them.
According to Casino.org, this is believed to be the first time a celebrity chef’s Las Vegas restaurant has been closed by health officials.
The department says, “A closure takes place when an establishment has 41 or more demerits, an imminent health hazard requiring closure, or failed a ‘C’ grade reinspection. An establishment must remain closed until approved to operate by the health district.”
The health department conducted a reinspection Monday, Jan. 6 at Wolfgang Puck Bar & Grill. The restaurant received an “A” grade and was able to reopen.
Puck opened his restaurant at the MGM Grand in December 1992, just a few months after launching his first Vegas restaurant, Spago. His restaurants led other celebrity chefs to open eateries along the Strip, with diners today able to visit restaurants from chefs like Bobby Flay, Guy Fieri and Gordon Ramsay.
Why mortgage rates are going up while the Fed is cutting rates
Prospective home buyers who thought the Federal Reserve’s rate-cutting cycle would relieve high mortgage rates were in for a rude awakening in 2024. Since the date of the Fed’s first cut in September, the rate on a 30-year fixed mortgage has gone up nearly a full percentage point, even though the Fed has cut two more times since then.
The average 30-year fixed mortgage rate started 2025 at 6.91%, up from 6.09% when the Fed first cut in September, according to Freddie Mac.
“People have been saying, ‘Look, I’ll wait until the Fed cuts interest rates and then I’ll get a better mortgage rate. And we’ve seen exactly the opposite,” Bright MLS Chief Economist Lisa Sturtevant told Straight Arrow News.
Sturtevant said a key reason for this phenomenon is the mortgage market is reacting to expectations as opposed to actions.
“Mortgage rates had been following from the beginning of July all the way through the rate cut in September – the Fed had been telegraphing that they were going to do that rate cut in September – so it was already baked in,” she explained.
I think we are in a new normal where the mid-sixes is going to be a good mortgage rate.
Lisa Sturtevant, Bright MLS Chief Economist
But although the Fed would proceed to cut rates two more times before the end of the year, the committee signaled in December that they were less optimistic about the inflation track in 2025. They downgraded their forecast from four cuts in 2025 to just two.
“So mortgage rates rose on account of that information, as opposed to the rate cut itself,” Sturtevant said.
While many homeowners jumped on the opportunity to lock in a rate of around 6% in September, many more missed the boat. Sturtevant said those homeowner hopefuls will be ready to act quickly with any downward movement. But will rates only rise from here?
“I don’t think we’re going to get to 8% for sure,” Sturtevant said, responding to reports warning of that possibility. “I think we are in a new normal where the mid-sixes is going to be a good mortgage rate. And for some people, that’s hard to swallow, since during the pandemic, we saw rates down around 3%.
“But actually, over the last 50 years, the average rate on a 30-year fixed has been about 7.5%,” she continued. “So we’re not high by historical standards. We’re just high by what people had come to expect during the pandemic.”
The average 30-year fixed mortgage rate bottomed out at around 2.65% in January 2021. The post-pandemic peak hit 7.79% in October 2023.
Mortgage rates are more closely tied to the 10-year Treasury, which is a more reliable indicator to consider when predicting where mortgage rates are heading.
“We spent a lot of time wringing our hands and thinking about what the Federal Reserve is going to do, but the Fed is reacting to economic data, and that is what we should be looking at when we want to think about where mortgage rates are headed,” Sturtevant said.
Sturtevant recommended paying attention to the 10-year Treasury, inflation, the labor market and consumer confidence.