A question to the educated commented: What is the purpose of selling loans to people who you know will probably default? Is it to sieze their collateral? Fro

A question to the educated commented: What is the purpose of selling loans to people who you know will probably default? Is it to sieze their collateral? From the article, I noticed this snippet: Shorts went into the store looking for payments of $300 to $400 a month, she said, something she could afford on her $749 in monthly disability benefits. The saleswoman, she recalled, later told her that she was lucky to qualify for a loan on a bigger, used mobile home priced at $55,000. Clayton financed it for her with a Vanderbilt loan at a 15.77 annual percentage rate, after a down payment of $7,000. When she and Leroy returned for the closing, they said that, like many other buyers, they were rushed through it. Agents quickly turned over page after page, saying, “You need to sign right here, sign here, sign here,” recalled Leroy, who said he has been unable to work since he went blind in his right eye. The monthly payments were $851 — about $100 more than the amount she received from her fixed disability payments. Shorts, who said she didn’t realize how much she would have to pay every month, made just two payments, then defaulted in June 2014. Clayton filed to seize the home that October. Even when loans go bad quickly, the sale can be profitable for Berkshire Hathaway. Clayton often marks up new homes about 70 percent over invoice, company documents show. After a 20 percent down payment and thousands of dollars in fees added into the loan, Clayton can recoup more than half the wholesale price of the home in a year. When borrowers stop paying, the company can repossess and resell the home, again with another markup.