Posts Tagged ‘21st Mortgage Corporation’

The Greenback Boogie – CFPB’s Manufactured Housing Appraisal Rule hits July 18, 2015

July 2nd, 2015 Comments off

cfpb-parody-logo-credit-plus1properties-cartoon-credit-MHProNews-com-(c)2015-all-rights-reserved-“The manufactured housing industry’s professionals are racing to contort themselves into yet another new shape to fit their federal masters.” So sayeth a company official off-the-record to MHProNews, as the new Consumer Financial Protection Bureau (CFPB) appraisal rules hits home on July 18th, 2015. 

State associations and the Manufactured Housing Institute (MHI) have been busily attempting to prepare their members for the implementing of these rules.  But as another industry manager said, “Only a small fraction of the manufactured housing industry’s members have been at a meeting where these appraisal related rules are being discussed.  Many companies remain entirely outside of any association affiliation.  How will they possibly all be prepared in time?  How can there not be some adverse impact of the [CFPB] rules on manufactured housing sales?” 

While the off-the-record comments are often dark, the on-the-record public statements of lenders, NADA and DataComp – who will all be front-and-center in compliance – suggests a higher degree of confidence.   The links below are to official statements by 21st Mortgage and Triad Financial Services, two of the major MH industry’s chattel (home only, or personal property) lenders. 

21st Mortgage’s Statement on the new CFPB Appraisal Rules

Triad Financial’s Don Sharp’s Statement on the upcoming July 18 CFPB Appraisal Rules

The third link is to a somewhat different topic, but also connected with the issue of appraisals.  Cody Pierce, President of Cascade Financial Services – an FHA and VA manufactured home lender –  explains why a percentage of loans fail to meet appraisals.

About Appraisals on FHA and VA Land Home Sales

MHProNews will continue to track and deliver updates on the critical finance-related regulatory and other issues that impact Manufactured Housing. In the mean time, why not share your views on these new rules with your Congressman or Senator? A sugestion on how, linked here. ## 

(CFPB logo parody credit  plus1properties; cartoon credit MHProNews © 2015)

l-a-tony-kovach-daily-business-news-mhpronews-Daily Business News brief submitted by, L. A. ‘Tony’ Kovach.

New York Times on CFPB – Manufactured Homes Crucial to Affordable Housing

October 22nd, 2014 Comments off

cfpb_credit_cfpb The New York Times ‘ recent article on the MH/CFPB issue states that manufactured homes have become a crucial source of affordable housing in the South, West and northern New England, according to the Consumer Financial Protection Bureau’s (CFPB) report last month, with prices of less than half the $94 per square foot national average for a site-built home.   A single-section manufactured home can sell brand new for $43,000.

However, in all states except New Hampshire, manufactured home buyers cannot qualify for mortgage financing if they do not own the land beneath their homes, pushing them into personal property loans. These are also called “chattel loans,” which according to the CFPB, averaged an interest rate of 6.79 percent in 2012 as opposed to 3.6 to 4.2 percent for a 30-year fixed rate conventional mortgage. Doug Ryan of the Corporation for Enterprise Development (CFED) says MH buyers with poor credit often end up paying ten percent interest.

Most lenders stay clear of MH loans because they are often smaller than site-built home loans, but the costs are relatively more, making them not as attractive a lending investment.

As a result, concentration of MH lending rests primarily with a handful of large companies including two that are part of Berkshire Hathaway: 21st Mortgage Corporation, and Vanderbilt Mortgage and Finance. Tim Williams, CEO of 21st Mortgage says the higher interest rates cover a higher proportionate servicing rate and higher cost of funds, according to The New York Times.

Ryan says his organization is calling for more involvement of Fannie Mae and Freddie Mac in the secondary market for manufactured housing which would attract more lenders.  On this point, as MHProNews  knows, the industry would largely agree.

For years, as  long time MHProNews  readers know, the industry has attempted to explain that the issues relating to lending rates are due in part to simple business math plus a lack of a secondary market, which the so-called Duty to Serve (DTS) in the Housing and Economic Recovery Act (HERA 2008) was supposed to address through mandates for the Government Sponsored Enterprises (GSEs).

In spite of the DTS in HERA 2008 requirements, when the GSEs went into receivership under the FHFA, access to the secondary market remainded ellusive, even though the economic meltdown was driven by problems in the conventional housing market, not manufactured housing.

What the CFPB report has failed to address are differences between how its facts where presented, versus those published by the Government Accounting Office (GAO) report last summer.

How this impacts consumers has been covered by Manufactured Home Living News, which pointed out recently that even with higher rates, lower MH prices still yields lower payments on manufactured homes, per the GAO study and an earlier report by Fannie Mae, see this link here.

The Manufactured Housing Institute (MHI) weighed in on these topics, for example, see this link here.##

(Image credit: Consumer Financial Protection Bureau logo)

matthew-silver-daily-business-news-mhpronews-com(Submitted by Matthew J. Silver to the Daily Business News-MHProNews)

MH Industry Pros Respond to CFPB Report

October 8th, 2014 Comments off

richard_cordray_c-span2__creditWhile the Consumer Financial Protection Bureau’s recent report on financing the purchase of manufactured homes (MH) notes buyers of MH are often poor, elderly, rural and vulnerable to high-cost “chattel” (“home only,” personal property) loans, the bureau wants to ensure consumers have access to “responsible credit.” Their report, comments and the resulting controversies are the subject of a new Industry in Focus report, linked here.

Consumer Affairs reporter Truman Lewis says mortgage lenders generally disregard MH lending because the demand is not great, which leaves the door open to five national MH personal property lenders.

However, smaller regional and local MH lenders exist, but CFPB regulations restrict sales people from referring consumers to them for fear of violating CFPB rules.
Dan Rinzema, president of MHVillage and DataComp says the government regulation is misguided and does not help the market for the resale of manufactured homes, which would help make MH a competitive housing choice. Doug Ryan, Director of Affordable Housing Initiatives at the Corporation for Enterprise Development (CFED), a non-profit that supports affordable MH, echoes CFPB’s claim that borrowers are vulnerable to expensive loan products.

Some Washington insiders say the report stems from the stiff grilling CFPB Director Richard Cordray received Jan. 28, 2014 at the hands of the House Financial Services Committee’s Subcommittee, and point to a video of that hearing.

The 55-page report alleges that 68 percent of all MH purchase loans in 2012 were chattel loans compared to three percent of site-built home loans, and included that two-thirds of MH loans were eligible for traditional mortgages but chose personal property loans instead. Chattel loans are quicker to obtain, says the report, but have lower origination costs. Industry finance expert Dick Ernst, a principal at FinMarkUSA, says while the report notes the absence of a secondary mortgage market for MH, the cost to originate personal property loans is the similar regardless of the amount of the loan.

Meanwhile, the Government Accountability Office (GAO) report, in response to a request from the chairman of the House Financial Services Committee for an analysis of HUD’s implementation of the MHIA of 2000, says HUD has fallen short of encouraging Ginnie Mae to securitize manufactured home loans, which in turn reduces the availability of affordable MH.

The law firm of Bradley Arant Boult Cummings LLC said in a statement the CFPB report indicates the agency is showing interest in the MH industry which may lead to adjustments that could reduce burdens on the lenders and lower costs of credit to borrowers. Robert Williamson, of Hart King Law, says the paper may be a public recognition of the importance of MH to the consumer housing market, and may in turn stimulate a more robust MH market.

The Manufactured Housing Association for Regulatory Reform (MHARR) notes the report may be establishing a jumping off point for future CFPB activity, while the Manufactured Housing Institute (MHI) remarks the CFPB acknowledges the negative impact the Dodd-Frank Act, implemented in Jan. 2014, is having on the manufactured housing market.

Tim Williams of 21st Mortgage Corporation says the statement that 60 percent of chattel customers own their land and are therefore eligible for a conventional mortgage is incorrect, noting it is irresponsible of the CFPB to make such false statement. He says 26 percent of 21st’s borrowers say they own their land, but he is pleased the CFPB admits their regulations restrict credit to manufactured home owners.

When consumers are considering buying a site-built or a manufactured home, the two pieces of crucial information are the down payment and the monthly payment. MH sales people are restricted in what they can offer in response to such a question, while some believe it’s not a violation if a Realtor ® gives such information.

A chart from Fannie Mae demonstrates that even when the interest rate is higher for an MH, monthly payments often make the purchase of a manufactured home the lower cost option. The restrictions on MH salespeople helping consumers find financing can turn people away from even being interested in a manufactured home, further damaging the industry’s chances of offering affordable options, as Jason Boehlert, Senior VP of Government Affairs at MHI notes.

Major MH lenders have told MHProNews they have added staff to deal with the increase of applications being “shot-gunned” to multiple lenders, since the CFPB regulations took effect in Jan. 2014. This is increasing costs, all because MH retailers do not want to be accused of steering customers, which could result in heavy fines.

In addition, the lack of a secondary market for MH loans also limits mortgage lenders from making MH loans, which higher costs of funds makes the loan cost more to the borrower. The CFPB regulations result in lenders not accepting loans for under $25,000 because the cost to originate and service that sized loan makes them unprofitable.

While CFPB Director Cordray says, “Manufactured housing is a critical source of affordable housing for some consumers,” the regulations of the agency work is in the opposite direction—preventing potentially millions of Americans from buying durable, affordable, energy efficient homes that could stimulate the housing market and the jobs that would accompany the stimulus. ##

For the complete commentary, please click here.

(Photo credit: C-SPAN 2)

MHI Annual Award Winners and Board Officers

October 7th, 2011 Comments off

MHProNews has obtained the official list of award winners from the 2011 Manufactured Housing Institute (MHI) annual meeting held earlier this week in Phoenix AZ.

MHI’s Chairman Award: Tim Williams, President, 21st Mortgage Corporation

State Association Executive of the Year: Deanna Fields, Executive Director, Manufactured Housing Association of Oklahoma

Jim Moore Excellence in Communication Award: Ken Anderson, President, Arizona Housing Association

Frank Walter Standards Award: Michael Wade, Director of Manufacturing, Cavalier Homes, Inc.

The following members were reelected to serve as MHI officers for 2012: Chairman, Joe Stegmayer, Cavco Industries, Inc.; Vice Chairman, Don Glisson, Jr., Triad Financial Services, Inc.; Secretary, Kevin Clayton, Clayton Homes; and Treasurer, Nathan Smith, SSK Communities. Ken Cashin, Windstorm Holdings, Inc., will continue to serve on the Executive Committee in his role as Immediate Past Chairman.

In addition, David Lentz with American Land Lease, has been selected to serve as Chairman of the National Communities Council (NCC) for 2012.

(image credit: MHI)

Spinny Liberal attacks 21st Mortgage on Dodd-Frank reform effort

September 13th, 2011 3 comments

Predatory Lending Spinny LiberalSpinnyLiberal’s (SL) recent post reminds us there is another viewpoint to the Dodd-Frank legislation. SL took aim at 21st Mortgage, starting with the allegation that  “Predatory Lenders Hate Regulation.”  According to SL, the ‘janitress’  “showed me a packet she got in the mail from 21st Mortgage Corporation, her mortgage company. She asked me about it. Oh man. After reading it? Head. Spinning. Anger.” The package contained form letters and pre-addressed envelopes, asking the 21st Mortgage customer to write her Senators and U.S. Representative.  The cover letter explained why Dodd-Frank in its current form will harm manufactured home owners. SL wrote, “Unbelievable. They encouraged her to voice her opinion with prewritten letters?” SL wraps up his lengthy blast at 21st – complete with examples – by writing: “The Manufactured Home Owners Association of America agrees. They know that the Dodd-Frank Act is a good thing. Selling homes that people can actually afford so they don’t end up foreclosing. What a concept.  I shouldn’t be surprised that companies protecting their shady interests would try tricks like this…She dumped the packet in the shredder…exactly where they belong.”  In a posted reply, LATonyK responded to SL with “The truth is the truth. 21st Mortgage is right on this. Barney Frank has said the bill needs amending, and has said he will work to amend it.”  SL’s reply?  “The tactics 21st Mortgage used were downright disgusting. Prewritten letters made to look like the MH owners wrote them to be placed in prepaid envelopes to send to their Senators? …People shouldn’t feel like they should send them because the one they pay every month told them to. If the MH owners have a problem with Dodd Frank, they can voice their opinion. NOT the opinion of 21st Mortgage.”  LATonyK countered: “Spinny, Just as you are sounding off and lining up support for Dodd-Frank, so too the lender can sound off and ask for support to change it. The fact that Barney Frank…is willing to amend his own legislation should be compelling to any thinking person…a true liberal should be for not against free speech.  It should not matter who states a fact. The facts support 21st (Mortgage) in this matter. If I were a stockholder… I’d argue that they are absolutely correct in asking their customers to write. It would be irresponsible to not let their customers know what is coming, if they have an opportunity to stop this from negatively impacting millions (of) manufactured home owners.”

(Graphic credit: SpinnyLiberal)

Mid-December Update on Louisville MH Show

December 14th, 2010 Comments off

Heading to the Louisville Manufactured Housing Show January 12-14? The latest newsletter from Dennis Hill at Show Ways has updated information about exhibitors, hotels and seminars that will include information on effective pricing, self-financing and how to dominate your local market. The newsletter contains an up-to-date list of exhibitors including Fairmont Homes and 21st Mortgage Corporation and answers questions about why YOU should go. Also note the registration cut-off date is December 29. Click to read the newsletter.