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Posts Tagged ‘Corporation for Enterprise Development’

Doug Ryan: Expand the Lending Opportunities for MH Buyers

February 23rd, 2016 Comments off

manuf home royal homes of raleigh nc creditManufactured housing (MH) is an inexpensive path to the American Dream of homeownership, said Doug Ryan, Director of Affordable Homeownership at the Corporation for Enterprise Development (CFED).  But he claims there is a lack of competition among the few MH lenders that exist—a market dominated by Clayton Homes, which builds, markets – and through related firms – finances MH.  Thus it does not have to rely on a secondary market.  According to Ryan, that vertically integrated operation makes the path to more ownership of quality affordable manufactured homes more difficult.

In an op-ed in American Banker, Time to End the Monopoly over Manufactured Housing, Ryan says the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac should participate more in buying chattel loans. That might happen, due to a proposal from the Federal Housing Finance Agency (FHFA) that the GSEs would get credit for “duty to serve” underserved housing markets, like making loans to MH secured by real estate.

While not including chattel or “personal property” (home only) loans, the proposal advocated by CFED and others includes a move that encourages states to change their titling laws to recognize MH as real estate. If titling reform did go through, they claim, it would open the field up to more lenders, and present more competition for Clayton and their affiliated lenders.  

The move to magically dub “home only” loans as “real estate” is opposed by MH lenders and by third party MH financing experts, such as Marty Lavin, JD, because it is too costly and burdensome for lenders in practice.  Lavin and others assert that would drive out more manufactured home lending, rather than create more of it.

While Freddie Mac has recently made loans to acquire manufactured home communities (MHCs), as MHProNews  has previously reported, an additional part of the proposal would require the largest GSE mortgage companies to finance the purchase of MHs as chattel loans, which Ryan says would begin the development of a secondary mortgage market for MH.

Ryan said Clayton finances homes through lenders owned by parent company Berkshire Hathaway, and has no need for Fannie and Freddie. Ryan claims the industry’s largest national trade association, the Manufactured Housing Institute (MHI), and Clayton both oppose the inclusion of chattel loans in the rule.  This, asserts Ryan, prevents owners of manufactured homes on leased land from building equity.

What Ryan fails to mention is that MHI and the Manufactured Housing Association for Regulatory Reform (MHARR) are both working to get chattel lending included by FHFA’s Duty to Serve (DTS) instructions to the GSEs. CFED’s point man on manufactured housing also fails to mention that his organization has admitted to what is a conflict of interest on issues relating to the CFPB and MH lending.

Ryan also fails to mention that federal regulations have driven out personal property lending that previously existed for manufactured homes, so the very policies CFED advocates for would actually make MH lending even tougher.

Clayton Homes/Berkshire Hathaway have been hammered repeatedly by slanted and misleading by theSeattle Times/BuzzFeed  advocacy journalism “reports” charging discrimination, predatory lending, exploiting and even “threatening” borrowers.  Ryan and his allies – such as Ishbel Dicken’s led National Manufactured Home Owners of America (NMHOA) – have promoted such negative media, in an effort to undermine the progress made on passage of the Preserving Access to Manufactured Housing Act (HR 650/S 682).

MHLivingNews  has outlined many of the issues relating to mistaken points made by Doug Ryan and others in a video and related article, found here. The video quotes CFPB’s Richard Cordray, HUD’s Julian Castro and Senator Bob Corker speaking on MH as an affordable housing solution, highlighting facts on MH lending that Ryan glosses over or blatantly ignores.

MHProNews has two upcoming video reports that will shed additional light on financing and quality affordable living issues that Ryan, Seattle Times, PBS NewsHour and those in league with CFED ignore. Marty Lavin’s in depth discussion on this topic, is linked here.  

Ryan’s Op-Ed, says MHProNews publisher L. A. ‘Tony’ Kovach, “badly misses the mark on the reality of manufactured home lending; whatever his intentions or motivations, Doug Ryan has proven that he doesn’t know what he’s talking about, as he essentially admitted in an interview with Jan Hollingsworth, that MH finance expert Dick Ernst is better informed on these topics,” found in an in-depth report linked here.

2014gao-report-comparing-manufactured-housing-vs-apartments-posted-mhpronews-com-

The full GAO report on Manufactured Housing is linked from the image above or can be downloaded here.

Kovach reminds Daily Business News readers that Ryan has never denied any of the facts in reports MHLivingNews or MHProNews have published, and says if Ryan was correct and confident in his stance on these MH lending issues, he’d take up the offer to debate him and Ishbel Dickens.

Kovach commends Ryan to the extent that on paper, he and CFED are pro-MH as an affordable housing solution, while pointing out that sadly the policies Ryan and his associates advocate for via their media efforts are actually harming manufactured home owners, lenders and businesses. “The GAO’s report on manufactured housing has already documented, as have one of the GSEs’ own reports, that even with somewhat higher interest rates, MH is the lowest cost and the lowest monthly payment of any form of housing,” Kovach stated. “Modern manufactured homes are the solution to the affordable home crisis, and the path to more lending is found by allowing the free market to work and not be impeded by federal regulations and well meaning, but misguided policy advocates.” ##

(Image credit: Royal Homes of Raleigh)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

The Atlantic’s article on Manufactured Housing Evoked Comments

October 29th, 2014 Comments off

mfg_home__pine_grove_mfg_homes_incCommenting on The Atlantic‘s article about manufactured housing (MH), the CFPB and MH financing, Amy Bliss of the Wisconsin Housing Alliance, compliments the piece for citing facts such as:

> energy efficiency,
> less waste in the building process,
> availability to middle-incomers,
while acknowledging the difficulty in finding financing for chattel loans.

Writing on Industry Voices  at MHProNews, she notes the lack of a secondary market with few lenders for MH loans, saying the CFPB should mandate that any lender allowing conventional mortgages cannot simply deny a manufactured home loan.

Doug Ryan, with the Corporation for Enterprise Development, a non-profit that supports manufactured housing as an affordable alternative, says in The Atlantic, The biggest problem (with MH loans) is with how the loans are done. It’s about as enjoyable as buying a used car.”

Bliss says many manufactured home consumers are elderly, the disabled and families with children. The industry should make a talking point out of the disparate impact made on these three protected age groups when lenders refuse to make loans to MH in communities.

Bliss notes that considering manufactured homes in land lease communities as real property is not an answer, but suggests filling communities with new MH will add vigor to the communities. For the full Bill OpEd, click here.

MHProNews  will have a more in-depth look at The Atlantic‘s coverage of the CFPB’s MH Finance report, planned for later this week. ##

(Photo credit: Pine Grove Manufactured Homes)

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

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

October 22nd, 2014 Comments off

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

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

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

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

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

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

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

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

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

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

(Image credit: Consumer Financial Protection Bureau logo)

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

Pennsylvania Conference Conclusion: Manufactured Housing Critical to Area

August 7th, 2014 Comments off

penn state mobile home park  centredailytimes  abby drey creditForty-Five community leaders of varied backgrounds from eight counties in Pennsylvania gathered at the Federal Reserve Bank of Cleveland-Pittsburgh, sponsored by CFED’s (Corporation for Enterprise Development) Innovations in Manufactured Housing (I’M HOME), to discuss an initiative for improving the financial, health and environmental outcomes of residents of manufactured homes (MH). Though the numbers of MH vary county to county in Southwestern Pennsylvania, the units are proportionally older than homes elsewhere in the nation, making it an ideal testing ground to determine the effects of older factory-built homes on the health and welfare of the occupants. According to what CFED.org tells MHProNews, at the end of the conference there was a consensus that MH is vital to the region’s pressing needs for affordable and efficient housing for people of all ages. The first step will be to inventory manufactured homes in the area and determine which ones can be rehabbed and which ones need to be replaced cost effectively. ##

(Photo credit: Abbie Drey/centredailytimes.com–Penn State manufactured housing community)

Bullseye Missed by CFED’s Doug Ryan in “The Hill” blog on Preserving Access to Manufactured Housing

May 20th, 2014 Comments off

Writing in thehill.com blog, Doug Ryan, director of Affordable Homeownership for Corporation for Enterprise Development (CFED), says the manufactured housing industry is trying to sabotage perfectly good Consumer Financial Protection Bureau (CFPB) regulations that protect buyers of MH from high-priced loans, through promoting its Preserving Access to Manufactured Housing Act H.R. 1779.

Noting that for low-income families a manufactured home is the clearest path to home ownership. Ryan says, “Most manufactured homes are financed with personal property loans, like cars, rather than traditional mortgages, and the lenders have largely operated outside of federal regulators’ supervision. The CFPB regulations ensure that manufactured housing loans are subject to the same rules that apply to traditional mortgages.”

Ryan says the Manufactured Housing Institute (MHI) has been trying to convince the CFPB for months that without change to the new regulations it will cost consumers more to purchase manufactured homes, but the CFPB says the evidence is not conclusive in impacting MH buyers. He adds the industry “stands to reap huge profits from the change” that would result from H.R. 1779, and that the MHI has been pouring thousands of dollars into coffers of congressional candidates. MHProNews.com understands H.R. 1779 in fact modifies the definition of mortgage originator and of high-cost mortgages to ease access to manufactured home loans. Ryan asks rhetorically if you would rather have industry lobbyists or the CFPB writing your regulations.

Noting that H. R. 1779 has bi-partisan support, Ryan suggests that Reps. Terri Sewell (D-AL) and Maxine Waters (D-CA) may have been duped into supporting this bill that seeks to circumvent CFPB authority without evidence of the need to do so. He says, “This is how working families lose out; not with careful consideration of the data and the public interest, but in an obscure, politically-charged markup in room 2128 of the Rayburn House Office Building.”

MHProNews publisher L.A. “Tony” Kovach says, “Ryan and his associates need to sit down and get clear on the facts on MH lending. This is simple math; its cost of funds, cost to service loans, need for a profit and a market that the GSEs have not served, in spite of HERA 2008’s so-called Duty to Serve. Respectfully, Ryan has homework to do!”

More information, including quotes from more industry professionals, are found at this link. A video interview with finance expert Dick Ernst for MHProNews’ June issue will shed additional light on regulatory challenges the CFPB ought to address.##

(Image credit: U. S. House of Representatives)

New York Measure Seeks Financing Parity for MH and Site-built

May 8th, 2014 Comments off

Writing in the Opinionator section of The New York Times, Andrea Levere says 18 million people with an average median income of $30,000 live in factory-built housing, making it the largest source of unsubsidized affordable housing in the U. S. Although over 70 percent own their own homes, most who live in manufactured housing communities (MHC) do not own the land under their home, as MHProNews.com knows. Noting most manufactured homes (MH) are classified as personal property instead of real estate, it makes it difficult to obtain low-cost financing. She says federal laws are needed to enact better financing options, and more local jurisdictions should embrace manufactured homes.

A proponent of MHCs becoming co-ops, Levere says 18 states have laws that deal with the transition, but most do not give people adequate time to prepare for the actual purchase. She says strict zoning laws prohibit siting MH in urban areas where they could be most helpful. In Oakland, California, MH has been used for infill lots since the 1980s, and the homes have sold for four times their original cost. The New York State Senate is considering a bill that mandates local ordinances treat manufactured housing like any other housing. She says more small lenders need to provide loans with the backing of Fannie Mae and Freddie Mac, just as they do for conventional homes.

As president of the Corporation for Enterprise Development (CFED), Levere promotes co-operative ownership of communities. She is also the board chairwoman for ROC USA (Resident Owned Communities).##

(Image credit: Royal Homes of Raleigh (NC)–manufactured homes)

Nonprofit Seeks to Alter Landscape of Affordable Manufactured Housing

February 23rd, 2011 Comments off

The Corporation for Enterprise Development (CFED), a Washington, D.C.-based nonprofit, collaborates with Neighbor Works in their I’M HOME (Innovations in Manufactured Homes) program, which supports a wide range of sustainable, affordable housing.  Realizing the need to change the framework that separates manufactured housing from stick-built, and to open doors to more available financing for low-income manufactured housing, the organization received funding from the Ford Foundation to pursue their objectives.  The organization has also spearheaded initiatives to help residents of factory-built communities purchase their communities, and to replace pre-1976 mobile homes with HUD Code manufactured homes or modular homes.