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President Jimmy Carter Blasts Trump Administration on Affordable Housing, Carter’s Manufactured Home Ties

September 14th, 2018 Comments off

 

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CNBC reported last week that former President Jimmy Carter took aim at the Trump Administration on the important issue of affordable housing.

 

Low-income housing needs to be raised much higher as a priority for our country,” former President Carter said in a phone interview with Emma Newburger. “That’s the first step toward making people who are now dependent on government assistance, on welfare rolls, to get a good job and have a chance to raise their families and put their kids through school.”

Mr. Carter told CNBC that the Trump Administration is ‘ignoring a national housing crisis,’ and he urged voters to support candidates who promote affordable housing.

 

The Carters, HUD’s Carson, and Manufactured Housing

CNBC’s Newburger told MHProNews that the “topic [of manufactured housing] didn’t come up in the interview” with former President Carter.

By contrast, when the Department of Housing and Urban Development (HUD) was asked to respond to former President Carter’s broadside, a HUD spokesperson offered to MHProNews the very specific answer of Secretary Carson’s strong statement of support for manufactured housing.

The HUD spokesperson who replied to the Daily Business News on MHProNews was one that has not previously spoken or messaged with MHProNews. Her reply for HUD is all-the-more interesting to investors and businesses in manufactured housing (MH) who read the tea leaves that may signal what direction the agency will take when their regulatory comments review are completed, later this year.

Those comments the spokesperson sent from Secretary Carson were previously published by the Daily Business News, and are found on HUD’s website here, or at the article with some commentary linked below.

“A New Era of Cooperation and Coordination,” is Promised by HUD Secretary Carson, Saying “I Hear You”

Mr. Carter is a prominent supporter of Habitat for Humanity. An informed source in Carter’s home state of Georgia told MHProNews that Habitat rarely uses manufactured homes, preferring to get “free labor” from those who are putting their “sweat equity” into the house that they help build. That keeps Habitat’s construction costs low.

In Habitat’s view, per our source, this combination of factors creates a greater tie of the Habitat dwelling buyer to their home and mortgage payments.

However admirable Habitat is, it obviously only scratches the surface of our nation’s affordable housing needs.  Their own data shows that the majority of their work is done in other countries, instead of here in the U.S.

HabitatForHumanityManufacturedHousingIndustryDailyBusinessNewsMHProNews

It’s noteworthy that a Google search of former President Carter reveals no obvious criticism by him of the Obama Administration over their handling of affordable housing efforts.  By comparison, even some progressives criticized former President Obama for his perceived missteps at HUD regarding affordable housing. One such critique was about Shaun Donovan’s selection by former President Obama, and that source viewed Donavan as a Clinton Administration ally throwback.

So why did Mr. Carter give former President Obama a pass for 8 years, when the rate of home ownership dropped?

HomeOwnershipRatesUSCensusBureauDailyBusinessNewsMHProNews

Where was Mr. Carter on the issue of rising rents during the Obama Administration?

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Or why didn’t the former president from Plains, GA not critique Mr. Obama’s handling of the economy, debts, and deficits? During the Obama era, rental rates continued to rise. Regulatory policies during the 44th president’s term in office constrained or even crushed small businesses by the thousands, while large companies recovered and grew.  Manufactured housing has slowly recovered during the Obama years, due in part to regulatory overreaches.

MedianAskingSalesPriceVacantExistingSalesUnits1995to2018ManufacturedHOusingIndustryDailyBusinessNewsMHProNews

Details further below will outline factors that began during the Carter Administration years, which culminated in some of the housing and mortgage issues of our era. See further below.

MedianHouseholdIncome2016NARManufacturedHomeOwnersVsRentersDailyBusinessNewsMHProNews

Yet, in an apparently partisan Democratic Party fashion, Mr. Carter’s recent blast wasn’t aimed at former President Obama for the erosion in home ownership rates.  The peanut farmer turned president from Plains didn’t take at rising rents under former President Obama. Instead, Mr. Carter attacks President Donald J. Trump?

The Trump Administration has only been in office for about 20 months.  Dozens of the 45th president’s nominees have been slow-walked by Democrats in the Senate.

Ironically, the rate of home ownership and the economy are both improving at a significant clip since Mr. Trump won the election.  So where’s the logic of Mr. Carter’s claims? CNBC apparently failed to ask – or did not report it if they did – insights into any of these salient questions.

Perhaps equally interesting is the following issue and related question.

The federal manufactured housing construction and safety standards administered by HUD had their first full year in effect during President Carter’s Administration.

Figure1MobileManufacturedHomeSalesSHipmentsVsExistingingNewHouseSalesManufacturedHousingiinudstryDataMHProNews

There were certainly many factors that contributed to the steep drop in sales of mobile homes from their peaks in 1973 and 1974. When the HUD Code kicked in and manufactured housing was ‘born’, sales levels stayed fairly low during the Carter years. They went up modestly during the Reagan Administration era.

Mr. Carter’s colorful younger brother Billy served two different independent HUD Code manufactured home builders in high visibility roles for several years in the 1980s.

So why didn’t actively-retired President Carter do more to promote manufactured homes as an affordable housing solution? Or why hasn’t Mr. Carter done more to elevate manufactured homes as an obvious and proven free market solution to affordable housing since he left office?

After all, Mr. Carter can’t claim ignorance of the topic. The former president’s home state was at one time a top-tier manufactured home producer.

So, why did HUD Code manufactured home shipments nose-dive relative to the end of the mobile home era timeframe compared to the Carter years?  By contrast, as Daily Business News on MHProNews has reported, both prior Presidents Nixon and Ford each promoted “mobile homes” as an important part of the U.S. affordable housing mix.

Help Others “Get It” – Loans on “Mobile Homes” Promoted by Another U.S. President

The photo below was provided to MHProNews by ScotBilt Homes, which has produced manufactured homes in GA for many years. Left-to-right in the photo are Sam Scott, Judy Cazel, President Jimmy Carter, his brother Billy Carter, and Jim Cazel, the pilot of the aircraft they are standing by.

SamScottJudyCazelPresidentJimmyCarterBrotherBillyCarterJimCazelManufacturedHousingDailyBusinessNewsMHProNews600

 

The Reaction to former President Carter’s Comments From Washington, D.C.

There is no widely published comments to be found from a Google search (see downloadable screen capture) from the Arlington, VA based Manufactured Housing Institute (MHI) regarding the recent comments by former President Carter.

But the Washington, D.C. based Manufactured Housing Association for Regulatory Reform (MHARR) weighed in on the conventional comments by Mr. Carter in a nuanced comment as follows.

While Secretary Carson as we noted in a recent article has said the right things about the need to eliminate exclusionary zoning, there is much more that HUD could do to support consumer financing for affordable housing, most particularly chattel financing for manufactured homes,” said Mark Weiss, JD, President and CEO of MHARR to MHProNews.

Weiss and MHARR members are on record encouraging more lending from the FHA, while acknowledging the progress made to date during the Trump Administration.

It should be noted that MHARR has no PAC, by design, but MHI does. MHARR has praised the Trump Administration, as has MHI.

 

“Move, Open, Live” De Rose Industries & Senator Thom Tillis’ Mobile Home Comments

But a key distinction between the two trade groups on this issue is that MHI put two paid pro-Clinton speakers on stage in their pre-election Chicago event, a claim MHI has never opted to deny or try to explain.  The mainstream headline below is one of several that document that Berkshire’s chairman backed the party that favored heavy regulations. Why?

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MHI’s primary “big boy” member is Berkshire Hathaway owned Clayton Homes and their affiliated lenders, 21st Mortgage Corp and Vanderbilt Mortgage and Finance. Kevin Clayton is seen with former President Bill Clinton in the disastrous post-Haitian earthquake “recovery” effort photo and linked report below, that dives into those alleged scandals.

“Toxic Trailers” – Clayton Homes, Warren Buffett, Kevin Clayton, Clintons – Exposé Videos

Warren Buffett campaigned for Secretary Hillary Clinton against Mr. Trump in 2016, saying on several occasions, that Buffett believed in her policies.  As MHI award-winner – and periodic MHI critic – Marty Lavin has said, “Pay more attention to what people do than what they say,” and “Follow the money.”

FollowThe MoneyPayMoreAttentionToWhatPeopleDothanwhatTheySaySpySea72MartyLavinYachtManufacturedHousingINdustryProMHProNews

 

Forbes’ John Moratta Weighed In on Carter to Obama Era

But there’s other issues that need to be raised, one of which a Forbes Contributor David John Marotta examined. In 2012, Marotta argued that the entire contest between Democratic candidate and incumbent, President Barack Obama vs. GOP nominee, former Governor Mitt Romney should come down to a single subject.

It’s one that directly relates to affordable housing, manufactured homes, the U.S. economy, and the future direction of America.

The Forbes headline was, “The Election Should Be Settled by a Single Question: Who Caused the Financial Crisis?”

ForbesElectionSettleSingleQuestionWhoCausedFinancialCrisisDailyBusinessNewsMHprOnews

Two key paragraphs by Marotta on the subject framed by the headline above read as follows.

“…It all began with the Community Reinvestment Act (CRA) of 1977 under President Jimmy Carter. Its goal was to reduce discrimination against people in low-income neighborhoods by FDIC banks. The law did not provide any criteria for equal process. Thus any bank whose lending results were called into question could be challenged. And banks needed regulators to approve their actions.

DavidJohnMarottaForbesContributorDailyBusinessNewsMHProNews300The CRA increased the oversight of financial institutions and empowered organizations such as the Association of Community Organizers for Reform Now (ACORN). Obama’s work as a community organizer included working as ACORN’s attorney suing banks in Illinois.”

Skipping further into his column, the following extended quotes from Marotta said, “In the last election campaign, it was vehemently denied that Obama had been an ACORN trainer until the New York Times uncovered records demonstrating he was.”

Now Democratic New York Governor “Andrew Cuomo was the assistant secretary of Housing and Urban Development (HUD) and then secretary under President Bill Clinton from 1993 through 2001. Cuomo created 800 new HUD employees who were paid as much as $100,000 to fight against abolition of the agency. These community builders, as they were called, worked with local groups to lobby against tax cuts and to aid Democratic candidates.

Under Cuomo’s leadership in 1998, HUD forced banks in Texas to lend $2.1 billion in affirmative action loans with a higher risk and higher default rate.”

President Clinton touted these supposed achievements. “In 1998 he boasted,In the 20-year history of the Community Investment Act, 85 percent-plus the money loaned out under it to poor inner-city neighborhoods has been loaned in the five years since I’ve been president.”

Fannie Mae and Freddie Mac were on the path to disaster. Now Obama blames deregulation under the Bush administration for the financial meltdown, but there was none.

After Clinton, George W. Bush and Republicans tried to tighten up lending standards for which they were demonized by the Democrats. These efforts were pushed unsuccessfully throughout the Bush administration starting in April 2001. 

Ranking Democrats Barney Frank and Charles Schumer led their party to block these efforts in the fall of 2003. Frank made light of Republican concerns. He said, “I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. And even if there were a problem, the federal government doesn’t bail them out. But the more pressure there is there, then the less we see in terms of affordable housing.”

Those points in Forbes are ones MHProNews has raised several times over the years –  including, but not limited to – by previously sharing the video posted below.

 

It should also be noted that former President Bill Clinton himself acknowledged that, “The responsibility the Democrats do have may rest more in resisting any efforts by Republicans in the Congress or by me when I was president to put some standards and tighten up a little on Fannie Mae and Freddie Mac.”

Let’s let all of the above sink in for a few moments.

That should not imply that several Republicans weren’t also complicit in the housing/lending issues in the run-up to 2008, because Fannie and Freddie were donating to candidates on both sides of the aisle.

But more influence buying cash went to Democrats. Politico reported that the GSEs spent a stunning $200 million dollars in campaign contributions, see the screen capture below.

2008GSEsFannieFreddieGaveDemocratsMorePrior2008FinancialMeltdownDailyBusinessNewsMHProNews

So it seems more than ironic that former Democratic Presidents Carter, Obama, and the Clintons now gleefully point a public finger at President Donald J. Trump. But the evidence and factual reality is that those Democratic leaders are guilty of blatant hypocrisy. They and their party bear a significant degree of responsibility for the economic turmoil, starting in the Carter years, during the Clinton Administration, as well as the run up and through the Obama Administration eras.

Big government solutions, the ones more commonly proposed by Democrats, have proven for 50 plus year not to work.

UCDavisUnitedStatesPovertyRateSince1959to2015DailyBusinessNewsMHProNews_001

It’s federal government policy that turned toward more subsidized conventional housing, which has never kept up with the needs in over 50 years.  Manufactured homes, or the mobile home era before the HUD Code existed, were the free enterprise solution that have proven to be as “amazing” as HUD Secretary Carson said in Senate testimony earlier this year.

 

 

Summing Up the View from MHVille

There is little doubt that members of both major parties have over the years made their respective errors, along with efforts to spin or cover up those mistakes.

But there’s plenty of evidence that former Presidents Carter, Clinton, and Obama – along with Democratic allies in Congress – fostered the conditions that have undermined manufactured housing, and hurt the economy at several times, and in often severe ways.

As industry investors, professionals, and all others ponder their support and votes in the upcoming midterms, it’s vital to consider the issues noted above.

Democrats and disaster-capitalists have long ties. Mr. Buffett and Kevin Clayton’s connections to top Democrats ought to be weighed by all those who care about the issue of affordable housing and manufactured homes role in that effort.

As a disclaimer, while the publishers of MHProNews are political independents, this writer published an article that supported then candidate Trump during the Republican primaries in 2016. That article was republished by the Trump campaign on their website, as the screen captured image below reflects.

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While the Manufactured Housing Institute (MHI) paid for two pro-Clinton speakers in the closing days before the 2016 election, the Kovach family supported Donald J. Trump’s candidacy as the best for the industry, small business and hundreds of millions of Americans. One of those stories ended up on the president’s campaign website, and hundreds of conservative and pro-Trump websites.

Resistance Democrats, and some Republicans too, have caught to slow or stop the reforms that former Democrat turned Republican Donald J. Trump has sought to bring to the U.S. in economic and foreign policies. Those who claimed that Mr. Trump could never win were proved wrong.

Some of those same voices are shouting daily now that Democrats will carry the House, and maybe even the Senate in a supposed “blue wave.” It is a “knife fight,” as Senate Majority Leader Mitch McConnell recently said.

But the races are close. And the polling touted in 2018 has some of the same problems that 2016 polling had.  It is every bit as likely, perhaps more likely given consumer and business confidence levels, that a “red wave” is coming.

President Trump is taking over the GOP, and is transforming it into a pro-worker and pro-business, pro-growth party.  1/3 of the counties that went for Mr. Obama flipped in 2016 and supported Mr. Trump.

The midterms will be all about turnout. Turnout will be determined by energy and enthusiasm. The economic recovery this time isn’t driven by Federal Reserve monetary easing, or doubling the national debt in just eight years, as occurred during the disastrous Obama Administration years.

We are only now beginning to see details and documents about the level of corruption that occurred at the FBI, DOJ, and perhaps the CIA during the Obama era in the 2016 campaign.

The future of our industry’s growth potential may hang in the balance of a builder-businessman turned politician. President Trump has systematically been keeping his campaign promises.

HUD Secretary Carson’s pressroom spokesperson pointed to his manufactured housing comments as their reply to former President Carter’s controversial, and demonstrably misleading claim made to CNBC.

Yes, MHARR’s president is correct in saying that positive words and the regulatory freeze must be followed by more concreate and positive action.

But the Trump Administration, for all the drama that surrounds it, is keeping their promises to put American jobs, businesses, and our national interests first.  It’s a vast improvement over the presidents of both parties since the days of Democrat turned Republican, President Ronald Reagan.

That’s “News through the lens of manufactured homes, and factory-built housing,” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

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SoheylaKovachDailyBusinessNewsMHProNewsMHLivingNewsSubmitted by Soheyla Kovach to the Daily Business News for MHProNews.com. Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

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“Thou Shall Not Steal,” $2 Trillion Annually Lost to Lack of Affordable Homes, Making the Manufactured Home Case

New Records Achieved, Who Gets JOLT Credit? Surprising Insights for MHVille

September 13th, 2018 Comments off

 

NewRecordsAchievedWhoGetsJOLTCreditSurprisingInsightsMHVilleDailyBUsinessNewsMHProNews

The U.S. Labor Department’s Job Openings and Labor Turnover (JOLT) Survey reported a new high this week, approaching the 7 million mark.  Those in manufactured housing are all-too-familiar with this number in a practical way, because factory-builders and others tell the Daily Business News on MHProNews that competition for labor is growing more intense.

 

 

CNBC’s breakdown of the Labor Department data revealed the following highlights:

 

  • Vacancies outnumbered those classified as unemployed by 659,000 for the month, an unprecedented trend that began earlier this year. Openings rose by 117,000 from June, to 6.94 million, and are up 737,000 over the past year, a nearly 12 percent increase, the department said in its monthly Job Openings and Labor Turnover Survey.
  • The “quits” rate, an indicator of worker confidence as it measures those who left their positions voluntarily, also hit a record of 3.6 million, a gain of 106,000, according to Bureau of Labor Statistics records that go back to December 2000. The quits rate of 2.4 percent is the highest recorded since April 2001 and was up one-tenth of a percentage point from a month ago.
  • Professions registering the biggest gains in job openings were finance and insurance at 46,000 and nondurable goods manufacturing, with 32,000. Openings decreased in retail (-85,000), educational services (-34,000) and federal government (-19,000).
  • New hires totaled 5.68 million, a marginal increase from June but also a series high and an increase of 3.3 percent from the same month a year ago.

MHProNews curates information from a variety of sources across the left-right divide for good reasons. Among them, doing so provides a reality check to those who only get their news mainly from media that lean left, or lean right.

CNBC is left-leaning, and tends to be anti-Trump and pro-Democratic.  Who says?  Among others, former CBS News investigative correspondent in their Washington bureau, award-winner – and now independent journalist, Sharyl Attkisson.

CNBCLeftRightMediaSharylAttkissonDailyBusinessNewsMHProNews

So this analysis by Jeff Cox of CNBC on who should get credit for the economic records being achieved is all-the-more interesting.

 

What MH Associations, Trade Groups Say

Manufacturing has also reported new records.  The National Federation of Independent Business (NFIB), a trade association of some 325,000 members – which sources there say includes hundreds from the manufactured housing industry – has also hit new highs in business confidence.

Regrettably, while many sectors are hitting new records, manufactured housing is still struggling to crawl back to the 100,000-shipment level.  This is one of many reasons why the Manufactured Housing Association for Regulatory Reform (MHARR) – an independent-producers (HUD Code home production) trade association – has for years said that a new post-production association is needed.

Double-Digit HUD Code Manufactured Home Production Growth In July 2018, MHARR

The Manufactured Housing Institute (MHI) is the industry’s self-proclaimed umbrella trade group – including production and post-production – members.  Their own claim puts the onus on them to lead a more robust retail sales recovery.  MHI messages to their affiliates and members routinely take credit for almost anything that might appear to be good coming out of Washington, but the bottom line numbers are a metric that they can’t – or shouldn’t – ignore.

The new manufactured home shipments data tell a different story than the one that the overall U.S. economy is experiencing.

Why?

It’s an important issue for every independent, some of whom never experienced the industry’s higher producing glory days.  As a recent MHProNews report reveals, RV’s went from trailing manufactured housing in 1998, to surpassing manufactured housing only a few years later.  Today, RVs outsell manufactured housing by some 5 to 1.

RVsshipmentsTrailedMH1998WinnebagoDailyBusinessNewsMHProNews

MHI?  What about what MHI award-winner Marty Lavin called the “Big Boys” – including those associated with Berkshire Hathaway?

How do those ‘big boys’ and the association they dominate explain closing 100 sales centers in recent years, while RVs continue to grow?

SoTheAssociationMHIIsNotThereFortheIndustryUnlesstheinterestsoftheBigBoysJointheIndustry'sMartyLavinMHIAwardWinnerQuoteMHProNews

MHProNews looks at the facts, considers the sources, and follows the evidence. MHI earlier last year, and for years before, MHI routinely replied promptly to all inquiries. But since we’ve spotlighted the problems and concerns, they’ve gone silent. Why? If the facts are on their side, why not make offer a cogent explanation?

Clayton’s Surprising Result – Sunday Morning Weekly Recap, MH Headline Reports and News in Review Aug 19 to Aug 26, 2018

How can the industry continue to struggle by historical terms, during an affordable housing crisis?  With the amazing spread in housing costs between conventional and manufactured homes, how can manufactured housing be struggling to recover to even 100,000 new home shipments?

Fresh Facts, Figures, Future of Affordable Housing -Comparisons- Conventional Site-Built v Mobile/Manufactured Home Industry Data

Figure1MobileManufacturedHomeSalesSHipmentsVsExistingingNewHouseSalesManufacturedHousingiinudstryDataMHProNews

There are a growing number of industry voices that believe that BH/CMH and MHI have by various action/inaction has kept manufactured home sales at historically low levels. Evidence for the allegations and concerns on this page? See Related Reports and videos, linked below, which quotes and cites BH, MHI, CMH, 21st Mortgage Corp, and other sources.

The silence of MHI and Clayton on such bottom-line issues that really matter – like new home sales levels – is deafening, isn’t it?

ManufacturedHomeMHShipments1990-2017DailybusinessNewsManufacturedHousingMHProNews

President Donald J. Trump promises reforms in regulatory and taxation that would spur job growth. He’s delivering on those promises, as NFIB and other groups have applauded.

As the midterms loom, keep in mind four words that President Trump and Vice President Mike Pence, who hails from manufactured home producing Indiana, have been saying for months: “Promises Made, Promises Kept.”

“Growth,” “Fight on to Victory,” “One People, One Family, and One Glorious Nation Under God”

The ability for independents, and businesses of all sizes, to success in a pro-business, pro-jobs growth environment are obvious.

The fact that many of these JOLT report jobs are in sectors that former President Barack Obama said were never coming back proves just how wrong he and Secretary Hillary Clinton were, and just how right the policy proposals of the Trump team have been.

 

Clayton, Clintons, Buffett, Then and Now…

There are those in the industry who take a ‘see no evil, hear no evil, speak no evil,’ approach. But as Albert Einstein once observed, if you had an hour to devise a plan to solve a problem, he’d spend 55 minutes learning the background issues related to the problem, and then would spend 5 minutes devising and proposing the solution. Yesterday, MHProNews provided the following report, which has already had thousands of hits.

“Toxic Trailers” – Clayton Homes, Warren Buffett, Kevin Clayton, Clintons – Exposé Videos

With that above report in mind, the following video documentary on the Clintons takes on a new meaning.

This video is an hour and 4o minute long, so you better do this during off time.  The documentary video walks viewers step-by-step, interviewing state and federal investigators, witnesses, and shows corroborating documents. As an FYI for those considering the claims in the video below who may be new to such issues, the Clintons both were associated with Arkansas’ Rose Law Firm. Note that a simple Google search will turn up several articles from mainstream media that confirm many of the topical allegations raised.

The above concerns and controversies noted, why did Warren Buffett and the Claytons want anything to do with the Clintons?  Donald J. Trump has said that it pays to know as much as you can about something that affects your life or profession.  Doesn’t the advice by the businessman-turned-president make even more sense?

IfSomethingIsGoingToAffectYourLifeItsBestToKnowAsMuchasYouCanAboutItDonaldTrumpQuoteMHProNews800

That’s “News through the lens of manufactured homes, and factory-built housing,” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

(Third party images and content are provided under fair use guidelines.)

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ManufacturedHomeIndustry#1HeadlineNewsMHProNews

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SoheylaKovachDailyBusinessNewsMHProNewsMHLivingNewsSubmitted by Soheyla Kovach to the Daily Business News for MHProNews.com. Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

Related Reports:

Smoking Gun 3 – Warren Buffett, Kevin Clayton, Clayton Homes, 21st Mortgage Corp Tim Williams – Manufactured Home Lending, Sales Grab?

FEDs, MHI, Buffett’s Berkshire’s Clayton Homes Moat, Affordable Housing, and Billion$ in Manufactured Home Market Manipulation

Dodd-Frank: Clintons, Buffett, Trump and What it all Means

December 5th, 2016 Comments off
doddfrankclintonsbuffetttrumpandwhatitallmeanscreditthewhitehouse-postedtothedailybusinessnewsmhpronewsmhlivingnews

President Obama signs Dodd-Frank into law. Credit: The White House.

With President-elect Donald Trump set to take office in a few weeks, one of the issues front and center is Dodd-Frank and what will happen to the legislation, which Senators Elizabeth Warren (D. MA.) and Bernie Sanders (I. VT.) have vowed to defend.

The issues, opinions, perspectives and points of reference abound.

Patrick J. Richard provided his take in American Banker, making the case that dumping Dodd-Frank could restore executive accountability to the financial sector.

doddfrankclintonsbuffetttrumpandwhatitallmeanscreditamericanbanker-postedtothedailybusinessnewsmhpronewsmhlivingnews

Patrick Richard. Credit: American Banker.

Absent from the debate over rolling back Dodd-Frank,” wrote Richard, “is recognition of how a regulatory recalibration – restoring balance between risk and rules – would also restore more personal responsibility on the part of financiers.

Richard used Warren Buffet and Berkshire Hathaway as an example of risk/rule balance in action, including Buffet’s line from his 2004 annual letter to shareholders that said “After all, who ever washes a rental car?

The ‘rental car’ in the oft-used expression could be a metaphor for the current financial services industry,” wrote Richard. “It has been so influenced by government regulation since the crisis that executives and boards of directors perhaps feel less ownership and accountability for its performance. Good governance recognizes that executives should treat the bank’s investments at least as carefully as their own money – or car.

CFPBmanufacturedHousing-polititcalCartoon-c-2016LifestyleFactoryHomesLLC-LATonyKovach-575x355

Parady of CFPB logo – credit, Plus 1 Properties. Cartoon collage credit, MHProNews.

Buffett referred to the importance of aligning executive and director incentives with shareholder interests in his 2004 letter.  In it, he made clear that all Berkshire Hathaway directors purchased their holdings in the markets just as normal shareholders did and that Berkshire Hathaway does not carry Directors & Officers liability insurance.

warren buffett pres obama motley fool 12-13

Warren Buffett, President Obama, credit – Motely Fool.

Buffett’s approach here is simple but far-reaching,” wrote Richard. “Directors and officers put ‘skin in the game’ and hold the same economic upside and downside as shareholders. They also face personal liability and full accountability for the legal ramifications of any misdeeds. Directors and officers do the right thing in part because it is in their personal interest to do so.

Richard also shared how this equation is more complicated for banks, as they treat shareholders and depositors as key stakeholders, even though their interests can be at odds. In part, this ties into the “why we need it” narrative of Dodd-Frank regulation. 

In reaction to the financial crisis, Dodd-Frank produced a blizzard of regulations to proscribe a litany of behaviors. But this approach has proven costly, complicated, stifling to innovation and susceptible to gaming,” wrote Richard. “Worse, it may have actually undermined executive accountability: The CEO in effect becomes a compliance manager rather than driver of key business decisions, often left to rely on the secondary assurances from risk managers and other mid-level managers.

Richard sums up his take by stating that massive regulation offers the opposite of the Warren Buffett approach. “By creating a system of highly detailed regulations that no CEO or board could recite, let alone master, Dodd-Frank and other regulatory schemes empower specialists, lawyers and bureaucrats,” wrote Richard.

doddfrankclintonsbuffetttrumpandwhatitallmeanscreditap-postedtothedailybusinessnewsmhpronewsmhlivingnews

Hilary Clinton. Credit: AP. 

Understanding the Clinton Connection

A recent editorial from Investor’s Business Daily (IBD) highlights comments from Hillary Clinton at a September Presidential debate, and shows how the Clinton Administration – not the tax cuts during the Bush 43 Administration – set the stage for Dodd-Frank.

In 1995, using the powers of the presidency, Bill Clinton turned the 1977 Community Reinvestment Act into an aggressive program that basically forced banks to lend money to ‘underserved’ communities,” the article said.

Credit: IBD.

Credit: IBD.

That meant those with low incomes who couldn’t necessarily repay a loan.

This is where The Department for Housing and Urban Development (HUD) comes in.

Under HUD Secretary Andrew Cuomo, the agency became particularly aggressive, in 2000 making a goal of over $1 trillion in new loans to low-income minority households,” the article said. Fannie Mae and Freddie Mac were told to make at least half of their loans to low- and moderate-income borrowers, mainly minorities.

Banks suddenly found that regulators had the power to refuse their branch expansions or reject a merger if they weren’t making enough loans to otherwise unqualified minority borrowers. So they played along.

They made the loans, and Freddie and Fannie bought the loans right back. It was like a game of musical chairs, and the Fed kept the game going in the early 2000s by cutting interest rates. Every time Republicans in Congress or President Bush talked about reforming housing programs, Democrats like Rep. Barney Frank of Massachusetts and Sen. Chris Dodd of Connecticut threw fits, threatening to gum up Congress and implying that GOP lawmakers were racists. The Republicans backed off.

And the connection is made.

Tax cuts had nothing to do with this whatsoever. Nor did the minor tinkering to the 1930s-era Glass-Steagall law in 1999, which was implicated in none of the major Wall Street insolvencies or subsequent bailouts during the crisis,” the article said.

It’s another die-hard Democratic myth,” IBD stated, “intended to absolve themselves of blame for the crisis. And the economy-killing Dodd-Frank financial regulations passed in 2010 were based on these Democratic myths — which is why we’re now having the worst economic expansion in modern history.

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Credit: Wikipedia, CFPB, HubPages.

MH Connections

Among the overlooked causes for the big slide of manufactured housing from the 372,000+ shipments hit in 1998 to the low ebb of the mid-to-late 2000s was loose lending standards of conventional housing lenders.  Buyers that once would have turned to manufactured homes for their housing, instead used so called “no doc” “liar loans” that boosted conventional housing at the expense of manufactured and modular home production.

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The initial nose-dive of manufactured housing that came after 1998 was due to a large volume of repossessions from poorly underwritten loans.  But the next bite out of the industry’s proverbial apple was equally poor – and far costlier to the U.S. economy and millions of conventional housing owners – loans made on houses that were too risky, and failed. Graphic image credit, Patrick.

As Daily Business News readers are aware, we have followed Dodd-Frank, the Consumer Finance Protection Bureau (CFPB) and its effect on the MH industry closely, including both being in the Trump Administration crosshairs, the CFPB being ruled unconstitutional, and who the Feds and the CFPB are working for on a practical level.

paulbradleycredtimhpronewsstanthonycasehighlightsbattleovercommunityownersrightsvsresidentsrights-dailybusinessnewsThe issue brings a common divide.  Paul Bradley stated his concerns about bringing Dodd-Frank to an end in a new article, linked here, concerned that ending those standards could mean a return to “predatory lending.”

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Manufactured homes ready for shipment. Image credit – Wikipedia.

On the other side are those – such as award-winning retailer, Alan Amy – who told Inside MH that he believes that CFPB regulations are costing around 30% to 35% more sales of manufactured homes a year. If Amy is correct, that would mean some 25,000 (+/-) new manufactured homes a year. So this issue is front and center for manufactured housing professionals.

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Award winning manufactured home retailer Alan Amy estimated in the video linked above that Dodd-Frank is costing the MH industry – and prospective home buyers – 30% + more sales every year. Credits – Inside MH – MHLivingNews – Sunshine Homes and ManufacturedHomes.com.

We will continue to follow developments regarding Dodd-Frank and the CFPB closely as they unfold. ##

(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.