The mobile-home trap: How a Warren Buffett empire preys on the poor

[Jesus Malverde]

After years of living in a 1963 travel trailer, Kirk and Patricia Ackley found a permanent house with enough space to host grandkids and care for her aging father suffering from dementia.

So, as the pilot cars prepared to guide the factory-built home up from Oregon in May 2006, the Ackleys were elated to finalize paperwork waiting for them at their loan broker’s kitchen table.

But the closing documents he set before them held a surprise: The promised 7 percent interest rate was now 12.5 percent, with monthly payments of $1,100, up from $700.

The terms were too extreme for the Ackleys. But they’d already spent $11,000, at the dealer’s urging, for a concrete foundation to accommodate this specific home. They could look for other financing but desperately needed a space to care for her father.

http://www.seattletimes.com/business/real-estate/the-mobile-home-trap-how-a-warren-buffett-empire-preys-on-the-poor/

[Thinkingabout]

1. Apparently this couple signed am ARM, Adjustable Rate Mortgage which adjust at different intervals.

I also wonder if they attempted to renegotiate a new loan at a lower rate. Yes mobile homes depreciate at a rapid rate but in many cases it is a cheaper home which can serve the purpose of housing for a family. I feel for any family who loses a home, haven't lost a home but was very close to doing so but there are sometimes solutions which can happen and the home owner is the one who needs to step up and find remedies.

[dixiegrrrrl]

4. I have drilled into my sons to learn about financing before they buy anything.

Now, no problem...they cannot afford a home in today's world.....

[dembotoz]

2. read a book years ago-----the poor pay more true then still true now

[dembotoz]

3. info on book from wikipedia--it changed my outlook forever....

The Poor Pay More is a 1967 book published by David Caplovitz. It is a sociology study of what could be called the "poverty penalty", which is a concept that poor people pay more for the same goods and services as people with more money do.

Esther Peterson cited the book as being important for understanding contemporary consumer problems.[1]

In 2010 a researcher cited the book as still being relevant.[2]