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Posts Tagged ‘conflict of interest’

Chairman Hensarling, Fannie Mae’s Latest “Backdoor Schemes,” Illegalities? MH Connections, Implications

May 19th, 2018 Comments off

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Late Friday, House Financial Services Committee Chairman Jeb Hensarling (R-TX) said that “high ranking Fannie Mae employees have been intentionally violating their government prohibition on lobbying through a series of secret meetings to remove the failed mortgage giant from federal oversight.”

 

According to Congressman Hensarling’s  statement to the Daily Business News, legal and ethical issues are at play in the latest controversy involving one – or more – of GSEs.

Attentive, long-term Daily Business News readers recall last year the editorial call by MHProNews for transparency, and the release of the minutes from closed door meetings between members of the Manufactured Housing Institute (MHI) and the Government Sponsored Enterprises (GSEs).

Neither MHI, nor the GSEs responded to those concerns by releasing said private meeting minutes.

Will Hensarling’s Friday warning prompt the parties to belatedly release their minutes? If not, what are the parties involved hiding?

 

Bloomberg Exposes Concerns

For nearly a decade, a top U.S. housing regulator has restricted Fannie Mae and Freddie Mac from trying to influence the raging debate over whether they should live or die,” said Bloomberg.

But despite those limits, a top Fannie Mae executive has done just that…Brian Brooks, Fannie’s general counsel, has a specific goal,” per Bloomberg, adding that “Brooks, who has ties to Treasury Secretary Steven Mnuchin, wants this done without the involvement of Congress, which has failed since the 2008 financial crisis to come up with a legislative fix for the mortgage giants.”

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When Fannie Mae went broke, it came begging taxpayers for what has turned out to be $120.836 billion in federal bailouts so far.  As a condition of receiving those funds, Fannie Mae was explicitly prohibited from engaging in “all political activities—including all lobbying,” a prohibition which it is now being reported Fannie has deliberately violated,” Hensarling said.

 

Investigation Launched

If true, this violation is more than an outrage, it is a direct affront on taxpayers and the current structure of the federally-back conservatorship that has allowed Fannie Mae to operate for the last decade.  It is a slap in the face of taxpayers that Fannie Mae thinks it can take their money and blatantly ignore the rules that came with it.  The American people deserve better.  That’s why the Committee will be launching a full investigation into these allegations to identify those responsible and hold them accountable to taxpayers,” per Hensarling’s statement to the Daily Business News.

But we can’t stop there,” the Texas Congressman said. “In order to truly solve the problem of the broken GSE hybrid finance model, Congress must enact sustainable housing finance reform as soon as possible and once and for all get rid of any backdoor attempts to resurrect the old, failed ways of the past.”

Before the crisis, Fannie and Freddie commanded two of the most well-funded lobbying apparatuses in WashingtonBloomberg’s report said on the controversial topic.  “In addition to employing dozens of lobbyists, the companies funneled contributions to nonprofits and think tanks and pressured policy makers to abandon potential regulations or laws the companies thought would constrain them.”

 

Problematic History, Harmed MH and the Nation

Pre-2008 meltdown, Fannie and Freddie generously funded the lobbying of politicos, like then Congressman Barney Frank.   Chuck Schumer is among the names that comes up in the 3 minute 12 second video below, defending the GSEs as being safe and sound.

Congressman Frank and others returned the lobbying dollars from the GSEs with the favor of protection from calls to reform the mortgage giants.  Those lawmakers did so by delaying actions that could have mitigated – or perhaps avoid –  the meltdown that some warned were coming.

The video clip below is a reminder of the now-all-too-often forgotten history.

 

Depending upon how “lobbying” is defined, Fannie Mae could be in violation of lobbying with respect to the  manufactured housing industry.

How so?

Because Fannie is a member of the Manufactured Housing Institute (MHI), a trade group that does lobbying.

That MHI membership would appear on its face to be a conflict of interest for all involved.

Why?

Because if MHI is doing its job properly, it should have declined Fannie’s membership, to avoid even the appearance of a conflict of interest.

There could be ethical, and/or legal issues involved in the Fannie/MHI membership matter.

For instance, as the Manufactured Housing Association for Regulatory Reform (MHARR) president and CEO, Mark Weiss, JD, has said that ‘every day that the GSEs don’t robustly provide chattel and other lending under their Duty to Serve mandate to manufactured housing is a gift to Berkshire Hathaway’s manufactured housing lenders.’

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There is more involved in this developing controversy. Those related issues will be part of an upcoming Daily Business News report.

Stay tuned. ## (News, analysis and commentary.)

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

Related Reports:

Manufactured Housing – Regulatory, Other Roadblocks and Potential Solutions, Up for Growth Research, plus Urban Institute Report Revisited

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

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Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

 

Buffett’s Clayton Buys Yet Another Builder, Growing Dominance in U.S. Housing Market

July 10th, 2017 Comments off
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Russ Doyle (left) and Brooks Harris, founder-principals in Harris Doyle Homes. Right hand photo, still from video on this page, below.

Last week, the Daily Business News on MHProNews was the first in manufactured housing to report that Berkshire Hathaway’s Clayton Property Group added Colorado based Oakwood Homes to their expanding site-built housing portfolio.

Now, Keith Holdbrooks, president of Clayton home building group, has another announcement.

We are proud to welcome Harris Doyle to our family of homebuilders,” Holdbrooks said in a press release.

Builder noted today that “In his 2017 letter to shareholders of Berkshire Hathaway, ceo [sic] Warren Buffett gave a shout-out to Berkshire’s Maryville, Tenn.-based Clayton Homes group and the fact that it had closed on its first three “site-built” home building operators by the end of 2016.”

Adding that, “More will come,” Buffett promised. “Site-built houses are expected to amount to 3% or so of Clayton’s unit sales in 2017 and will likely deliver about 14% of its dollar volume.”

What Others Are Often Overlooking…

While those involved in the construction trades understandably focus on the site-built or factory home building, what is going largely unmentioned is that Warren Buffett’s Berkshire Hathaway has also gone into the real estate business in a substantial way. Berkshire Hathaway HomeServices.

In a release, Berkshire Hathaway Home Services had this to say.

Irvine, CA-based HSF Affiliates LLC operates Berkshire Hathaway HomeServices, Prudential Real Estate and Real Living Real Estate franchise networks. The company is a joint venture of which HomeServices of America, Inc., the nation’s second-largest, full-service residential brokerage firm, is a majority owner. HomeServices of America is an affiliate of world-renowned Berkshire Hathaway Inc.”

 

Combined with their substantial – and growing? – presence in the housing building and remodeling supply chain, Buffett’s Berkshire – is growing in several directions.  Known within the factory built home industry for being the parent for the largest HUD Code builder, Clayton Homes, plus 21st Mortgage and Vanderbilt Mortgage.

Among other brands, Buffett’s strong presence in Wells Fargo and other banking units that do manufactured home, as well as conventional house loans.  Bloomberg and Business Insider reported last April that Buffett had to cut his stake to under 10 percent of Wells Fargo, in order to get around concerns raised by the Federal Reserve.

Back to Clayton’s Newest Buy…

Clayton, a Berkshire Hathaway company and one of America’s largest homebuilders, today announced it has acquired Harris Doyle Homes, a leading residential developer and home builder for the greater Birmingham, Ala., area, effective July 7, 2017,” stated the Clayton release.

Harris Doyle Homes is the fifth homebuilding acquisition for Clayton since 2015 and the second homebuilder acquired this month,” Clayton said.

The release pointed out that Clayton built “In 2016, Clayton built more than 42,000 homes.”  While it didn’t say how many were HUD Code, the industry total for last year was some 81,100 new manufactured homes.

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To see the special Sunday evening report on this time sensitive topic, click the image above. Want more lending? Email your thoughts and comments on the GSEs plan to ‘serve’ manufactured housing. You can submit electronically to FHFA at the link shown below.

What impact will this trend have on manufactured housing, and the Manufactured Housing Institute (MHI)?

A growing number of professionals are emailing or calling MHProNews, whispering their concerns about possible “conflicts of interest.” Given that Buffett’s brands now hold two of the four executive committee positions at MHI, will Berkshire’s ever-growing presence in conventional housing influence the industry in ways that may not be for the good of most other HUD Code producers, or independent retailers, communities, and others?

What do these non-factory built housing units under the Buffett banner mean to industry efforts such as the Duty to Serve and if these are more evidence of conflicts of interest for MHI’s dominant player? ## (News, analysis.)

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

Race in Delaware Heats Up

September 24th, 2012 Comments off

Following up on the race for Delaware’s 37th District State Representative seat between incumbent Briggs King and Beth McGinn, CapeGazette VillageSoup reports MHC resident McGinn chides Ms. King for saying she has been working on manufactured housing issues with homeowners associations as well as members of the legislature and government officials. Ms. McGinn says she has not found anyone Ms. King has spoken with who is involved with manufactured housing. Citing the rent justification bill the Delaware Legislature voted down, which Ms. King did not vote on citing conflict of interest because of family ownership of MHCs, Ms. McGinn asks, “Why would she spend time working on manufactured housing issues when she can never introduce or vote for legislation due to her stated conflict?” As MHProNews has learned, Ms. King is Republican and Ms. McGinn is a Democrat.

(Photo credit: sussexcountian—l-r, Briggs King, Beth McGinn)

Vol. Fire Dept. has Modular House for Quicker Response

March 14th, 2012 Comments off

The Enumclaw Patch reports due to local volunteer firemens’ inability to respond to fires more quickly from their own homes, the King County Fire District bought a modular home for sleeping quarters to better staff the Cumberland Fire Station. Many of the former volunteers have retired or moved from this town just southeast of Seattle, Washington, leaving the fire station unstaffed. The modular home had belonged to a county commissioner’s relatives, which initially raised eyebrows about possible conflict of interest, and led to questions about alternatives including site-built and new modular. In the end the modular house the district bought for $85,000 cost $307,000 for permits, and to move, install, and hook-up the new quarters.

(Photo credit: EnumclawPatch)

Rezoning Proposal Creates Conflict of Interest Charges

December 8th, 2011 Comments off

St. Clair Times reports from Alabama the Argo zoning board will consider a proposed ordinance to allow more manufactured homes into an area that has been home to MHs for many years. In changing the zoning from “high-density residential” to “manufactured home zoning,” the ordinance would disallow manufactured homes over ten years old, and sets standards for spatial requirements for each homesite. While board chairman Jim Link says the ordinance is pretty restrictive, and the area under consideration is only 16 percent of the city, councilman Steve Medori is concerned about property values declining. He says businesses may chose to not locate in Argo because of the MHs, and the proposed district may become home to potentially dangerous FEMA homes. He notes Mayor Paul Jennings and Link both own property in the proposed area, which could lead to a conflict of interest. Link and Jennings say they will recuse themselves from the discussion and the vote. Medori, who also owns property in the area to be rezoned, says, “If you design a missile, launch it, you’re still responsible for it. You can’t just say, ‘I’m out of it now’. Therefore, I think the whole process is tainted.”

(Graphic credit: bing images)