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“Don’t Mess With the Virgin,” Heated Fair Housing Manufactured Home Community Controversy Comes to Conclusion

March 21st, 2019 Comments off

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It was an issue that began to attract attention close to a year ago.  A controversy erupted between a pre-HUD Code mobile home resident and her resident owned community (ROC). The controversy raised freedom of religious expression and thus fair housing, and other legal issues.  So, it caught fire for months with mainstream news media across, Florida. It spread to numerous media markets, religious websites, and then to other places in the U.S.

 

The hullabaloo between Millie Francis, her commissioned painting of Our Lady of Guadalupe, and the Bradenton Tropical Palms resident owned community (ROC) achieved its media zenith when the Drudge Report picked it up and linked it.  Because of that platform’s enormous audience, it literally made the issue a global one. A prior report on the issue that summarizes the events and controversies, is linked below.

 

Puzzling Case of Millie Francis, Where are Religious Liberty, Fair Housing, Resident, and Manufactured Home Organizational Defenders?

 

Mark Young at the Bradenton Herald did the bulk of the mainstream coverage of this topic.  Young’s latest – and likely final report – on this topic is linked here.

Please be advised that I am in the process of finalizing an acceptable settlement to the referenced matter and do not anticipate having to participate in arbitration,” said a letter signed by signed by Mildred “Millie” Francis that was dated March 8, 2019 and sent to the Department of Business and Professional Regulation. That agency oversees arbitration cases for the Division of Florida Condominiums, Timeshares and Mobile Homes. “It is my understanding that you have received a similar notice from Knox Levine,” said Francis in the document.

The letter was obtained by MHProNews from a source other than Francis, and is linked as a download, here.

Francis concludes her letter to the state agency with, “I’m quite pleased with the outcome.”

 

MarkYoungPhotoBradentonHeraldUrbanAffairsReporterLinkedInDailyBusinessNewsMHProNewsYoung said for the Bradenton Herald that, “Attorney Bryan Levine, of Knox Levine, represented the [Bradenton] Tropical Palms …board of directors in trying to force 85-year-old Millie Francis, a devout Catholic, to remove the painting. Levine declined to answer whether a gag order was preventing comment about a possible deal.”

While Francis has not spoken to the Bradenton Herald since a settlement was proposed, she had previously said she planned on putting up an awning from the beginning of the controversy,” wrong Young earlier today.

 

Association Advocacy to Resolve the Issues?

MHProNews asked the Herald after their report was published, if any manufactured home association was known to have contacted their publication or any of the parties?  MHAction and the Manufactured Housing Institute (MHI) were among those specifically mentioned in the inquiry.  The paper said that no such contact was made to their knowledge.

Francis had previously informed MHLivingNews – prior to going quiet as the approaching agreement developed – the same thing.  No association or advocacy group had contacted her.

But Francis has significant levels of media contacts, and from the public at large.

That’s yet another example of a resident – in this case, a ROC shareholder – and the industry’s general reputation failed to earn any defense from the purported guardians of such post-production issues. It is an open question how much harm months of negative headlines may have created for home owners and the industry.

 

Don’t Mess with the Virgin

Days prior to what is an apparently confidential settlement agreement, Millie Francis told MHLivingNews, “Don’t mess with the Virgin,” L. A. ‘Tony’ Kovach told the Herald, a colorful statement that is a signature part of the feisty senior’s persona, quoted in their report. “Mrs. Francis did not go into details or elaborate on the meaning of the statement when I called her,” Kovach explained to the Herald.

The Bradenton newspaper described him as L.A. “Tony” Kovach, a manufactured home expert with 25 years in the industry and publisher of two trade publications,” who “has been following the issue closely.”

The saga began about a year ago, “when Francis wanted to replace her front window because security personnel were shining flashlights into her home late at night. Francis received permission to do the work and after replacing the window was inspired while at church to commission an artist to paint Our Lady of Guadalupe, one of Mary’s many titles, on the space.”

By early November, for months, the community’s manager “tried to force Francis to take the painting down, to which she replied, “They’ll have to kill me first,” wrote Young.

By January, community Tampa attorneys Knox and Levine had filed paperwork with the state that announced that Francis “has been sued in this proceeding.” Francis remained defiant, relying on her faith, prayer, and outside help from individuals in other states who had read about the matter.  One of them voluntarily took the lead and began to mediate the case on Francis’ behalf, which has now apparently been resolved.

In such disputes between residents and management, it is common for the parties to agree to a non-disclosure to settle a case,” Kovach told the Herald.Certainly, the Bradenton Tropical Palms, Vanguard, and Knox and Levine wanted this to go away quietly. There were too many problematic issues that pointed back to their management’s handling — or purported mishandling — of the matter with Mrs. Francis from the start.”

Kovach said it was a victory for not just Francis, but for other residents who may face overreach from an overly aggressive manager, who for whatever reason, might be tempted to over-reach their authority. That wasn’t a good look for the industry, especially to prospective community residents and manufactured home buyers.

It also puts a sad chapter to rest with what appears to be as happy an ending for all involved as possible,” Kovach said to the Herald. “Those who negotiated this should feel good about their efforts. For almost a year, this off-and-on dominated the news, including links from the Drudge Report, which made it a global issue.”

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Millie Francis informed MHLivingNews months ago that the awning was part of her original plan. While an apparent non-disclosure agreement keeps the parties from confirming or denying the details, that awning and Francis’ letter to the state suggest that she obtained what she wanted in the first place. The bottom line? Months of heat, and Francis’ commissioned painting of Our Lady of Guadalupe were preserved. No doubt comments from Nadeen Green, JD, and community owner Brian Gallagher, were useful parts of the settlement mix. Finally, Francis stated desire that ‘the virgin become better known’ has come to pass in a most unique way. 

 

Lessons Learned?

There are numerous possible takeaways from this episode.

  • One is that a mishandled matter can become problematic news.  That in turn can hurt the interests of residents, industry members, and the home buying public that may get turned off before they get turned on.
  • Another is that thoughtful intervention can help bring a matter to a positive closure. Based upon Francis’ letter, and a photo from the Herald, the indications are that the ROC shareholder apparently obtained what she wanted to accomplish.
  • The power of the media to influence events can’t be overlooked.  Weeks prior to the incident’s conclusion, messages tied to the community and their attorneys indicated that they felt the heat, and wanted to find a solution that didn’t make the matter worse. No doubt the Drudge Report’s linking of the topic raised the pressure on the community, management company, and their attorneys to a high level.

Finally, the issue could have potentially be solved weeks if not months earlier, had industry third parties gotten involved, in an attempt to lower the temperature and find a solution.

For a next step for those who want to see positive post-production engagement on issues that harm the industry’s image  see the linked, related reports below the byline and notices. That’s tonight’s “Industry News, Tips, and Views Pros Can Use,” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

 

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Related Reports:

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Cha-Ching! Manufactured Housing Made Simple in 2019

MH Black Eye, or Opportunity in Disguise? Vexing Saga of Millie Francis’ Faith Based Art, Bradenton Tropical Palms ROC, Vanguard Management, Knox and Levine

Fix MH Industry Trick$ – Special Meeting at Tunica Show

 

 

 

 

 

 

 

 

 

Kinzler, Gallagher on Congressman Keith Ellison, the MH Industry, and Manufactured Home Communities

October 20th, 2017 Comments off

ProgressiveStarCongressmanUSRepDemocraticNationalViceChairKeithEllisonOfficialPhotoDailyBusinessNewsMHProNewsCongressman Keith Ellison (D-MN-5) is a rising star in the Democratic Party.

Ellison’s not been without controversy among his peers.

While today’s focus is his proposal that will impact manufactured home communities and other elements of the industry, some background on Representative Ellison and his interest in manufactured housing is warranted.

Rising Democratic Star, Keith Ellison

Ellison is viewed provocatively by many within manufactured housing industry circles. The reason?

It’s because of his joint call with some fellow Democrats, who formally asked federal officials at the Consumer Financial Protection Bureau (CFPB), and the Department of Justice (DoJ) to release their findings to-date on their investigation of charges of racism, steering, and predatory lending by units of Berkshire Hathaway. See that related, exclusive Daily Business News report, linked here.

But Ellison’s willingness to boldly push for his progressive, left-wing agenda were among the factors that landed him the vice-chairmanship of the influential Democratic National Committee (DNC).

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Beyond pushing to investigate what his Democratic colleague has referred to as the near monopoly” of Berkshire Hathaway‘s units in manufactured housing, Ellison is making his presence felt in other ways in the manufactured home industry.

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U.S. Representatives Maxine Waters (D-CA), Emanuel Cleaver (D-MO), Keith Ellison (D-MN), Mike Capuano (D-MA). Image credits, Twitter, Wikipedia.

While voices in Arlington, Omaha, Knoxville, and their allies want to ignore or brush off Ellison’s public moves, they do so at their own risk.

One need not look beyond the prior failure of the Manufactured Housing Institute (MHI) to pass their Preserving Access bill – and the reasons why it failed – in the last congressional session.  Disregarding Ellison and others he’s aligned with, is to do so at the peril of the millions spent to date lobbying for their proposed changes to Dodd-Frank.

‘Heads in the sand’ won’t make a painful truth go away.

Ellison vs. MHI backed Preserving Access

Ellison and Maxine Waters (D-CA) were the opposition leaders to the MHI backed Preserving Access to Manufactured Housing Act, which recently cleared the powerful Financial Services Committee, where Ellison is a member.

HR 1699, the Preserving Access to Manufactured Housing Act, by a bipartisan vote of 42 to 18,” stated NYHousing.

Of the 60 members on the [Financial Services] Committee, only two members spoke out against the bill. Ranking Member Maxine Waters (D-CA) and Rep. Keith Ellison (D-MN) expressed concerns that the bill will remove consumer protections,” the association’s statement said.

However meritorious the HR 1699 bill may be, what’s often missing in discussions elsewhere in the industry is that Waters and Ellison have already teed up their knockout punch, referenced above and once again, linked here.

CampaignForAccountabiltyClaytonHomesLogoBerkshireHathawayVanderbiltMortgageRacismSteeringPredatoryLendingDailyBusinessNewsMHProNews720x403

See that in depth report on Ellison, Water’s efforts, linked here. 

It’s progressive political star Ellison who’s hunting for allegations of racism, steering, and predatory lending.  That, D.C. insiders say, will be the Waters/Ellison rallying cry.

Surprisingly, MHI and Berkshire Hathaway firms contacted have pointedly declined MHProNews invitation publicly condemn racism. Why not respond publicly via the industry’s most popular trade media, and denounce racism in a simple statement?

Expect Ellison, Waters and their allies to make that an issue in the mainstream media, per sources to the Daily Business News.

Against that context, this Daily Business News report now turns to Ellison’s own manufactured home industry focused legislation.

Cong. Ellison’s ShelterForce Op-Ed

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The photo used in Ellison’s ShelterForce op-ed, with logos, added under fair use guidelines.

As the Daily Business News has previously reported at this link here, Ellison introduced a bill that has significant support among members of the manufactured home industry.

The Frank Adelmann Manufactured Housing Community Sustainability Act (H.R. 3296)

In support of that legislation, DNC Vice Chair Ellison penned an Op-Ed for ShelterForce, which reads today as the download – linked here – reflects.

Quoting from that column, Ellison begins with an impassioned plea.

Frank Adelmann was bereft when he received an eviction notice from Lowry Grove mobile home park,” Ellison stated. “At 59, he had no resources to move and could not afford another home. The day before the park was to close, Frank ended his life. He was one of ninety-five families who lost their homes. Kids, parents, veterans, and even seniors, some in their eighties, were evicted. Parents struggled, and mostly failed, to find a home they could afford in the same St. Anthony’s school district. And dozens who thought Lowry Grove would be the last home they lived in, suddenly had nowhere to go.”

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Ross Kinzler, retired Executive Director of the Wisconsin Housing Alliance. Credits, MHProNews.

Regarding Ellison’s op-ed, award winning industry veteran, Ross Kinzler told MHProNews that, “The congressman acknowledges the problem right off the bat then promotes “cures” that ignore it.”

Brian Gallagher, Chief Operating and Financial Officer, of growing and respected Santefort Real Estate Group, LLC, took a more nuanced opening in his detailed reply to the Minnesota congressman.

After laying out their operation’s credentials, Gallagher wrote, “We share your concerns to ensure that the MH industry continues to provide quality affordable housing to over 22 (not 17) million Americans, all of them generally unsubsidized by government programs.”

Gallagher gives as an example of their manifest concern for their residents and prospective home owners.

Our company endeavors to be an example of best practices in responding to resident needs every day, including our offering of a 5% fixed financing rate to “Neighborhood Heroes” – Vets, nurses, teachers, and police/fire personnel,” Gallagher said in his letter to Ellison, that he then provided to MHProNews.

Ellison’s Stance

In Minnesota, ten mobile home communities have closed in the past twenty-five years, and no new ones have opened,” Ellison stated. “This uncertainty affects nearly 3 million Americans who are residents in the nation’s 50,000 [SIC] manufactured housing communities. While most of these people own their homes, they rent the land, which leaves them vulnerable to dramatic rent increases, arbitrary rules, and even eviction.

DefiningSICinJournalismDailyBusinessNewsMHProNews-com

Notice: that the SIC was editorially added by MHProNews, because the likely closer estimate
for the number of communities is around 44,000.
This article will have an updated link on that controversial topic, by Monday.

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Ellison’s point is that the problem is real, and he proposes to correct that through his H.R. 3296 legislation.

The Free Market Solution?

But Kinzler, who long lived in neighboring Wisconsin, believes Ellison’s proposed solution misses some key points.

Ten communities have closed in MN and no new ones built,” Kinzler tells MHProNews,What would the world look like if 25 to 100 new communities were built?  Supply and demand answers lots of questions.”

Kinzler added, “His [Ellison’s] “problems” are the creation of local government created shortages.”

SuicideSadnessQuestionsHowManufacturedHomeIndustryShouldAddressClosures.

Credits are as shown, to see the latest story on the Lowry Grove saga, click the image above. Note: the Manufactured Housing Institute (MHI) and their National Communities Council were contacted for comments, and provided none. Click here for that report

The Lasting, Painful Legacy of Magar Magar, and Lowry Grove?

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Brian Gallagher. Credit: LinkedIn.

We acknowledge that bad actors exist in our industry, as they do in all, but they do not tell the whole story,” Gallagher’s letter and attachment – linked here at a download – to Ellison said.

From experience, professionals like Gallagher and other industry professionals know the impact that stories like Magar Magar – spotlighted by NPR – or Lowry Grove have on public officials and millions of Americans.

It was precisely the Lowry Grove community’s drama in Minnesota which sparked Ellison’s bill.

Gallagher, Kinzler and others are far from alone in saying that issues of image, misunderstandings, and “bad actors” need to be addressed by the industry and its members.

That may explain why Gallagher took pains to spell out in his letter to Ellison the good that they strive to do in their operation, and that most industry members strive to do the same.

 

That ‘there are good actors too’ theme is that ROC USA President and CEO, Paul Bradley sounds often.

SantefortNeighborhoodsManufacturedHomeCommunity

A Santefort Neighborhood.  While the history on this particular property is not known to MHProNews, many investors are buying older communities, and are improving them. That’s private capital – free enterprise – at work to provide appealing, affordable, and quality homes. That routinely happens in manufactured housing without taxpayer subsidies.  Santefort website photo above, is provided under fair use guidelines.

But there are other voices who share a different viewpoint, believing that bad news should be overlooked, or ignored.

For example, the Manufactured Housing Institute (MHI) President and CEO, Dick Jennison, told MHProNews in writing that those who responded to the PBS NewsHour – and by inference, similarly negative stories – ”are either misguided or have a self-serving agenda.”

Seriously? Don’t industry members have the right to defend their profession’s reputation?  The full context of Jennison’s remark is in the screen capture, below.

ManufacturedHousingInstitueMHIRichardDickJennisonFrankRolfeMHCommunitiesMHPFundsEmailMHProNewsLogos

Then MHI Chairman Tim Williams told MHProNews that, “We can also make a case to counter the segment addressing manufactured home site rent increase. No one from MHI was asked to comment on the segment and the allegation that consumers become trapped in their homes. The reporter did not make any effort to understand the cost of operating a manufactured home community and why those costs must be passed on to the tenants, even though MHI provided ample evidence and information to assist the reporter in his research.” Wouldn’t the insights Williams shared be useful for the media and public to know? The only reason the industry knows, is because MHProNews asked for and received William’s thoughtful comments. Those are linked, here

A related article to Jennison’s message are shown at this link here.

Gallagher Stresses Objective, vs. Emotional Response to MHC Issues

Any rental resident is subject to market and regulatory forces, as are the MHC operators. State laws generally govern rent increases, and very, very few, if any, MHC residents who are financially able to pay their rentfall asleep wondering if they’ll have a home in the morning.” wrote Gallagher; the italicized part was a quote from Ellison’s column, linked here.

Ironically,” Gallagher stated in his letter to Ellison, “as I trust you know, Lowry Grove appears to be on its way to become a modern MHC (see 10/14/17 Star Tribune article, attached).   Apparently, the town approved only 350 of the 700 units requested for the 15-acre site.  Time will tell how this ultimately turns out – but it is further support, in my opinion, for the proposition that “hard cases make bad law.”

Gallagher draws towards a conclusion by noting that Ellison is mistaken in opposing Preserving Access.

Finally, your column also mentioned your effort to oppose proposed legislation which would “exempt manufactured housing sales people from the CFPB licensing requirements’.  This proposal is intended to correct the misfit between the SAFE Act, designed for traditional single-family home/condo sales and financing, and the standard operating procedures of the manufactured housing industry, which, as you mention constitutes 50,000 communities housing 22 million residents,” Gallagher said.

The law does not relieve loan originators from compliance, or dilute borrower protections, but allows MH sales people the ability to discuss financing alternatives with applicants in the absence of brokers and third-party lender without fear of non-compliance with federal regulations.   This will facilitate transactions without sacrificing the protections of the CFPB,Gallagher noted.

Again, Ellison’s full column is linked here, and Gallagher’s response is linked here. “We Provide, You Decide.” © ## (News, Analysis.)

Related: this video below debunks many of the stereotypes, through an interview with a now retired official who served at both the CFPB and HUD.


(Image credits are as shown above, and when provided by third parties, are shared under fair use guidelines.)

SoheylaKovachManufacturedHomeLivingNewsManufacturedHousingIndustryDailyBusinessNewsMHProNews-Submitted by Soheyla Kovach to the Daily Business News for MHProNews.com.

(Note: Soheyla Kovach is a co-founder of LifeStyle Factory Homes, LLC – the parent to MHProNews.com and MHLivingNews.com – and is a managing member.)

‘CFPB Rectal Exam,’ Congressman Stresses Need for Credit & Financial Reform, Manufactured Home Pros React

June 21st, 2017 Comments off

CongStevePearceNM2R-DailyBusinessNewsManufacturedHousingIndustryReportsResearchDataMHProNewsCredit is one of the most powerful devices of the financial system designed over time by modern societies. It gives people the freedom to spend money now – whether to cover a medical expense, an emergency repair, buy a home or send their child to school – and pay it off later,” wrote Rep. Steve Pearce, Congressman from New Mexico’s 2nd district.

Pearce stated in a column published in the Albuquerque Journal  that there are risks and rewards with credit, but underscores how important it is for businesses and consumers alike.

Pearce said, “Half of the homes in the 2nd Congressional District of New Mexico are manufactured housing. The [CFPB] bureau took several actions that resulted in all but one or two banks no longer lending for those.”

This bureau [CFPB] was tasked with protecting consumers – a laudable goal. Very quickly though, the bureau began to show it had no idea how or why many elements of the credit markets were established. As it began to regulate those elements out of existence, credit to the poor began to dry up. People in New Mexico soon began to see their opportunities disappear because their sources of credit were diminishing before their eyes,” wrote Pearce.

The congressman then walks, step-by-step through his case for making the Financial Choice Act the law that will reform the well intentioned – but in his view, fatally flawed – Dodd-Frank Act, and its offspring, the Consumer Financial Protection Bureau (CFPB).  The congressman’s full comments, are linked here.

Manufactured Home Industry Reactions

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JD Harper, Executive Director, AMHA, credit, LinkedIn.

I’m thankful that many of our elected officials in Washington D.C. – like Rep. Steve Pearce from New Mexico and Rep. French Hill from Arkansas – have heard and understood the concerns that their constituents – including community bankers and the manufactured home industry – have with the real-world negative impact that some of the provisions of Dodd-Frank have had on working families seeking to purchase an affordable home,” said JD Harper, of the Arkansas Manufactured Housing Association (AMHA).

Harper says, “I can only hope that the United States Senate will agree to act upon at least some of the less-controversial provisions contained in ‘The CHOICE Act’ – specifically those reforms aimed at helping manufactured home buyers access financing – instead of allowing a few Senators [to] derail this much-needed legislation with ‘scare tactics’ and ‘Doomsday Scenario’ rhetoric.”

A long-time “Lonnie dealer” type operation said they’d love to comment on this issue to MHProNews, but they didn’t want a “CFPB Rectal Exam. For decades, Lonnie Scruggs financed used pre-HUD Code mobile homes, and post-code manufactured homes as well on an ‘owner carry’ basis.  That created a path to ownership for thousands who could otherwise only rent.

Many of those Lonnie dealers often made a good return on their investment. Some would then reinvest in more inventory, which meant that more homes could be purchased, and more home ownership opportunities created.  It was a classic free enterprise solution for affordable housing at work.

How many of those who once bought from a Lonnie dealer are today left renting, or are pushed into subsidized housing?

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An older manufactured home in a land lease community. Credit: Homes.

MH Community Sector Response

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Brian Gallagher. Credit: LinkedIn.

It is difficult, if not impossible, to properly discuss all of the issues raised in this column and their impact on the Manufactured Housing industry in general and on MH financing in particular in a brief response.  Our small firm is also significantly impacted by the new regulations,” said Brian Gallagher, Chief Operating and Financial Officer, Santefort Real Estate Group.

No one should be in favor of oppressive, ineffective regulation,” said Gallagher, who stressed that sound, effective regulation would be good for consumers and the industry alike.  But Gallagher points out that the Choice Act has its own exceptions to the rule.  For example, he points to carving out protections for payday lenders, not offered to others in finance.

Gallagher laid out the burdens, risks and costs the current regulatory structure created for his operation, and wonders what good if any it does for potential home buyers?

Former Association Chair, and Retailer’s View

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Karl Radde, Southern Comfort Homes, Chairman, National Retailers Council, MHI.

Let’s forgo affordable housing for a bit and think of rent to own furniture places or pawn shops,” said Karl Radde of Southern Comfort Homes. He pointed to the example of rent-to-own stores, which he said he wouldn’t personally use, but others clearly find them beneficial.

Radde rhetorically asks, “If we try to ‘protect’ someone by over-regulating that industry, are we not in fact saying ‘You can’t have a TV?’”

Radde, the former Texas Manufactured Housing Association (TMHA) chairman, then raised a point that’s often missed. Namely, when owner financing is eliminated – something that Pearce noted in his editorial – then resale, values, and other economic consequences result.

At that point [in the absence of owner financing], the value of those homes dramatically decrease because they became worth only what someone could afford to pay for them in cash transaction,” said Radde.

That’s not only true of manufactured housing, but was equally true of conventional housing values.  When lending dried up in 2008/2009, existing conventional house values crashed.

Radde detailed more experiences, such as the need for being able to guide a home buyer into the better lending option, without being accused of ‘steering’ under the so-called MLO rule. He then applauded the financial reforms that Congressman Pearce, along with several manufactured home industry associations, are promoting.

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When the resale values of older manufactured homes are diminished or cut off due to regulations imposed by the CFPB, then the sale of new homes also suffers. Profits, jobs and opportunities are lost. A  home in McCrory, Arkansas. Credit: Realtor. 

Off the Record…

“…I’m not interested in doing an on-the-record comment on this,” at this time, said a party informed and engaged on industry financing issues, but wishing to avoid the political limelight.  “A point that you might want to make, though, is that Dodd-Frank is not the only significant impediment to access to consumer credit for manufactured home purchases.  There is another major impediment that has helped to distort 80% of the mh consumer financing market and that is the GSEs failure to provide secondary market and securitization support for mh chattel loans.”

That statement on the need for not just Dodd-Frank reform or replacement, but the need to implement the now almost decade-old Duty to Serve (DTS) mandate created by the Housing and Economic Recovery Act (HERA 2008) is one that several industry professionals made in their own words.

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Many public officials are regulating homes they have little or no true understanding about. Photo, Sunset Village, Glenview, IL – credit, MHLivingNews.com. Caption comments by the editor.

Congressman Pearce’s Purpose

New Mexico’s Rep. Pearce said that cutting off access to credit harmed a range of things important to those in his state.  Home ownership, property values, business and jobs were all being harmed.

This [CFPB regulations] resulted in fewer jobs for New Mexicans and less support for our local economies. Along the way, the bureau established guidelines that resulted in banks in Deming being regulated the same way as banks in New York City.”

Pearce noted that he tried the direct approach with the CFPB, to no avail.

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Richard Cordray himself said that there was never much high cost lending in the manufactured housing industry market, still from in an MHLivingNews video, linked here.

I have personally sat down multiple times over the last six years with the head of the CFPB and the chairman of the Federal Reserve to express the damage the bureau’s actions have caused to New Mexico. They just don’t seem to care about the effect on the poor, rural areas and the weight of their regulations. For these reasons, I’ve joined Chairman (Rep. Jeb) Hensarling, R-Texas, of the House Financial Services Committee to pass the CHOICE Act, repealing many of the ways that the bureau flagrantly ruins the hopes and dreams of those who financially struggle,” the New Mexico congressman said.

Pearce concludes, “It is my aim to see that even the most economically fragile in New Mexico have the opportunity and resources to earn their way to success.” ##

(The congressman’s full comments, as published, are linked here, as a download. Note, this column drew extensive comments from those quoted above, which MHProNews plans to publish in full in the days ahead.)

(Image credits are as shown above, and when provided by third parties, are shared under fair use guidelines.)

SoheylaKovachManufacturedHomeLivingNewsManufacturedHousingIndustryDailyBusinessNewsMHProNews-Submitted by Soheyla Kovach to the Daily Business News on MHProNews.com.

DTS Manufactured Home Lending – Views to FHFA NAFCU, an Innovative MH Community Operator, and MHARR

March 24th, 2017 Comments off
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Credit: Scott Lewis, Creative Commons.

Back in January, The Federal Housing Finance Agency (FHFA) issued a request for input (RFI) on its duty to serve (DTS) underserved markets ‘pilot program’ to finance manufactured homes, with a deadline of March 21st.

According to commentary from the Manufactured Housing Association for Regulatory Reform (MHARR), the request was an adjunct to its December 29, 2016 final rule implementing the Duty to Serve Underserved Markets provision of the Housing and Economic Recovery Act of 2008 (HERA), seeking public input on considerations that Fannie Mae and Freddie Mac should include in their determinations of whether to include manufactured home chattel loan pilot programs in their Duty to Serve Underserved Markets Plans.  And if so, how such pilots could be designed, taking into account policy, safety, and soundness considerations.

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Text and image credit, MHProNews.com

As the deadline arrived, there was no shortage of commentary and feedback from the industry and interested parties.

I am writing to you in regard to the Request for Input on Chattel Financing of Manufactured Homes. Overall, NAFCU supports the steps the Federal Housing Finance Agency (FHFA) has taken to increase the liquidity of the mortgage market and improve the distribution of investment capital available to very low-, low-, and moderate-income families,” said Ann Kossachev Regulatory Affairs Counsel for the National Association of Federally-Insured Credit Unions (NAFCU).

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Ann Kossachev. Credit: LinkedIn.

Nonetheless, NAFCU’s members have expressed concerns regarding the entrance of Fannie and Freddie into the chattel loan market given the history of manufactured housing loans in the secondary market.

Kossachev continued with a cautious tone to the FHFA.

Therefore, NAFCU requests that the FHFA diligently evaluate the chattel loans market prior to requiring the GSEs to decide whether they should pursue a pilot program, thereby extending the time allotted for the GSEs to make such a decision,” sais Kossachev.

NAFCU also requests that the FHFA continue to be transparent in the implementation of the chattel loans pilot program through regular updates and opportunities for stakeholders to provide feedback so the industry may closely follow the progression of the program.

Kossachev also shared that there is, potentially, very serious danger in moving forward too quickly, and that more time was the key to permit GSEs to evaluate the chattel loans marker.

There is serious trepidation among NAFCU’s member credit unions that the implementation of the FHFA’s chattel loans pilot program will cause a negative disruption in the mortgage market. Namely, credit unions are worried that lenders will increasingly enter the chattel loan market because of the associated higher interest rates, ignoring the fact that there is typically a higher rate of delinquency for manufactured housing loans,” said Kossachev.

Delinquencies in the chattel loan market often occur later in the life of the loan, such that the manufactured home is worth much less than the outstanding unpaid loan balance. This type of circumstance creates a risky environment susceptible to a crash.

The full response from the NAFCU is linked here.

It should be noted that NAFCU references the same documents that MHProNews published earlier this month in a feature story on DTS, linked here.

 

A Response From an Innovative Community Operator

Brian Gallagher, COO, CPA, JD, MBA, of Santefort Real Estate Group in Westmont, Illinois, and owner/operator of 11 manufactured home communities located in Illinois and Indiana, comprising 3,000 home sites, also provided commentary to the FHFA.

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Brian Gallagher. Credit: LinkedIn.

We are very confident that the Enterprise’s support of a secondary market for manufactured home community (MHC) chattel loans would be a win-win-win,” said Gallagher.

Secondary Market Investors (SMI) would receive higher yield investments with mitigated risk characteristics. Consumers would have access to more lending sources which, among other key benefits, would lower borrowing costs and unlock the equity value in their manufactured homes. MHC chattel home loan originators would have a source of funds to replenish their lending pools, leading to greater activity, jobs, and more Quality Affordable Housing for a presently unsubsidized and underserved consumer market.

Gallagher continues, stating that he sees a particular, innovative, method leading to success.

The Enterprises could bring this about through leading the development of ‘template transactions’ – standardized documents, PMI, and ‘Park Agreements’, pursuant to which the MHC’s in which the loan collateral is located agree to cooperate with originators and SMI to mitigate the risk of loss arising from borrower default. In sum, the Enterprises’ promotion of a chattel loan secondary market would satisfy their ‘Duty to Serve’ the lower economic classes which are disproportionately dependent upon manufactured home community living for their quality affordable housing needs.

The full response from Gallagher is linked here.

 

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To see the related news story linked above, please click the graphic.

For a deeper dive into understanding GSEs, Duty to Serve, and manufactured home lending, including Eagle One Financials Titus Dare and his “4S’” of good lending, click here. ##

(Editor’s Note: a special review of MHI’s comments is planned after the Tunica Manufactured Housing Show.

(Image credits are as shown above.)

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

Manufactured Housing Community has New Owner

November 13th, 2013 Comments off

The 901 homesite Tri-Star Estates manufactured housing community in Kankakee, Illinois was purchased in April, 2013 by Santefort Real Estate Group for $13 million after prior owner, Capital First, declared bankruptcy in Nov. 2010. Brian Gallagher, chief operating officer (COO) for Santefort, says, “We have a tremendous amount of work to do. I know it can be hard to see, but it’s a night-and-day difference today from where it was only a few years ago.” The company has purchased 24 new homes, 30 homes have been renovated, and another 30 were scrapped. While the community was 90 percent occupied in 1995, the daily-journal.com says only about 415 homesites are currently rented. Full occupancy would be 2,400 people living in Tri-Star, double the 1,200 people now living there. One of seven manufactured housing communities owned by Santefort, this not a property they plan to fix up and flip. Says Gallagher, “We are long-term players here. We have the resources to spend what needs to be spent. We’ve told our residents that we are all in this together.” Bob Palian, president of the Tri-Star Residents Association, says “They’ve done everything they said they would. I see better days ahead.” MHProNews has learned the sites rent for $495 each.

(Photo credit: daily-journal.com–Tri Star Estates)