http://money.cnn.com/2008/09/10/news/newsmakers/buffett_clayton.fortune/index.htm<<Not every subprime lender is drowning in red ink. Berkshire Hathaway subsidiary Clayton Homes, the nation's largest maker and financer of prefab and mobile homes, has been a bright light in a mortgage market that has generated $500 billion in write-downs since the start of 2007.
In 2003, Warren Buffett acquired Clayton, a family-run business based in Maryville, Tenn. In a memo, obtained by Fortune, to Berkshire Hathaway's (BRKB) board of directors, Buffett pointed out how well Clayton's loan portfolio has held up, even though 45% of the company's loans are to borrowers with subprime credit scores.
The company's loan delinquency rates have been stable: On June 30, 2004, the rate was 3.26%; last year it was at 3.5%; and now it's 3.82%. (In comparison, the delinquency rate in the traditional housing market is around 6.4%.) Annual credit losses are running steady at a reasonable 1.5% of the loan portfolio. And Clayton's foreclosures have actually dropped from two years ago, from 5,823 to 4,588. >>
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