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“What Are We, Chopped Liver?” MHI Member December 2018 Reactions

December 11th, 2018 No comments

 ClaytonHomes21stVanderbiltManufacuturedHousingInstituteFannieMaeLogoChoppedLiver

 

It should be a given that the upper management of Clayton Homes, and their Arlington, VA based Manufactured Housing Institute (MHI) are in favor of their stated agendas.

 

 

ManufacturedHousingInstituteMHINewClassofHomesDailyBusinessNewsMHProNews

Still from MHI Video, logos added by MHProNews.

 

No sooner than MHI released their self-promotion video, than the industry’s new home shipments data – those nettlesome facts below – indicated that for all of MHI’s claims of millions of readers, their own emailed statement yesterday reflects the opposite results of what they’ve claimed.

Here are the claims, and the evidence, according to MHI.

 ManufacturedHousingInstitutelogoMHILogoMHIVideoStillsMillionsofViewsDailyBusinessNewsMHProNews

 

Here below is a screen capture of MHI/National Community Council (NCC) Vice President Jenny Hodge’s email on the latest data, per MHI.

 ManufacturedHousingInstituteMHILogoOctober2018HUDCodeHomeShipmentsDeclineDailyBusinessNewsMHProNews

What MHI’s own data and claims logically prove is that for all their bluster, new HUD Code manufactured shipments measured by the seasonally adjusted shipment rate (SAAR) – as of the above – are flat for 2018.  Even if the manufactured home industry finishes strong in the final quarter, what actual good has MHI’s promotions done so far?  

But there’s more sobering words from MHI members.

 

“What are We, Chopped Liver?”

An MHI member producer, in a long phone call to MHProNews, argued that the so-called MHI led “new class of homes” makes no sense, because it would have been easier to have simply built state-coded modular homes.

Another MHI producer said that “KEVIN CLAYTON” supported this “new class of homes” plan – which in that professional’s view – harms the interests of the majority of current manufactured housing plants. 

That source said, What are we [meaning the balance and majority of HUD Code manufactured housing production], chopped liver? 

 

The Genesis…

Here’s how a MHI-only member producer explained it in a message to the Daily Business News on MHProNews.

Three years ago I took a group from Fannie Mae through a plant to tour to show what we were building… they were blow away… made you feel they don’t get out much to see what we are building… Surely, good would come from this to obtain better financing on our homes for all [of the manufactured home] industry,” said the message to MHProNews’ tip line.

Fast forward to the roll out of the new class of homes financing…This a slap in the face,” said that production veteran, adding “…what are we chopped liver! Our HUD code is not good enough?

Why [a] 5:12 pitched roof? Many, many factories today will not build that when they have back logs of 3 to 6 months.” He added a laundry list of specs between standard HUD Code production, and the specs that Fannie Mae and Freddie Mac want to see in this Clayton/MHI led “new class of homes,” including, “100% drywall… Why? You cannot see that from the street… let the consumer chose that.”

A number of professionals said that this plan was not only developed by Clayton, it obviously could benefit their new conventional housing subdivisions, which that from has been purchasing in recent years.

Warren Buffett has said that they expect to buy more site building opportunities.

Fannie Mae, Clayton, and MHI – to name but three key organizational players – are attempting to move the industry in a direction that arguably contradicts Kevin Clayton’s own statement from a few years ago.  Some may recall Clayton saying that the industry should not to forget those “that brought you to the dance.”

 

WarrenBuffettKevinClaytonClaytonTinyHouseBerkshireAnnualMeetingDailyBUsinessNewsMHProNews

 

But that new class plan is arguably just what the new GSE connected lending does. It ignores the majority of the industry’s products and consumers in favor of a minority. 

Furthermore, the industry’s HUD Code producers have long been able to build entry-level or residential style products. MHLivingNews articles and videos have made that consumer choice option apparent.

As more than one HUD Code builder proves, you can have residential style homes that are less expensive than these new class of homes will be, and they are proven to attract conventional new home buyers. 

manufacturedhomecollage-entrylevelcapecodmultisectionalsinglesectional-creditmanufacturedhomelivingnewsmhlivingnews

There are markets for each of these styles of homes, and consumers ought to have the ability to chose that home based upon their budget, circumstances, and desires. Builders should be allowed to build whatever the want to as well. That said, what this new class of homes does is bend the system in an artificial way, based upon financing that the GSEs were required to provided under HERA 2008 mandated Duty to Serve to Manufactured Housing. Its an apparent manipulation of the system, and sources say that even if this plan is successful, it will harm many for the benefit of a few. But what if this plan is no more successful than Clayton’s iHouse or iHouse 2.0?  Then, not only time and expense are lost, but the reputation of the industry is harmed too.

For example, award-winning retailer Stan Dye said that half of his sales are to people that previously owned a conventional house.  Isn’t that good enough for Clayton, the GSEs, and MHI?

 

 

Logically, given that

      FHFA,

      the National Association of Realtors,

      HUD’s PD&R

      plus other research shows that the millions of current manufactured homes can and do appreciate,

      where is the logic for creating these new and unproven standards?

 

Consider the Track Record… 

Consider the track record Clayton Homes has in such “innovative” product roll-outs. Our sources at Clayton remind readers that the Clayton’s iHouse and the iHouse 2.0 – which were both rolled out with great fanfare, and got significant media attention – both flopped.

Oops.

 

ihouse Clayton Green-Bridge-Farm-i-House-Chevy-Volt-568x378

Ever wonder whatever happened to the Clayton’s iHouse? Not much, so it was quietly dropped, per sources at Clayton. Will this new class of homes be next?  More to the point, will this Clayton-MHI “new class of homes’ harm the value of the current HUD Code manufactured homes in the process?  Photo Green Bridge Farm, the Clayton iHouse is shown with a Chevy Volt, which is also being cancelled by GM. Oops.

 

Thus far, the GSEs are leaving the vast majority of producers and all other HUD Code manufactured homes essentially out. The indications are that this plan purportedly came from Clayton and is obviously being promoted MHI. Why didn’t they back chattel and other lending for millions of proven HUD code standards homes instead? 

Isn’t backing all HUD Code manufactured homes what the Duty to Serve Manufactured Housing part of the law clearly implied? Where in the Housing and Economic Recovery Act (HERA) of 2008 – which gave us the Duty to Serve (DTS) did it say that the GSEs should compel manufactured housing to create entirely different homes before they get lending?

It’s an outrage, which is why that MHI builder said it is “a slap in face.”

 

 

It Gets Worse

This plan, which MHProNews said last year could be a Trojan Horse, is sadly developing in just that fashion. Because sources say that this plan arguably undermines the acceptance – and thus the value – of millions of existing HUD Code homes.

Who says? A parter and association member in a community operation. He’s not alone.

Beyond complaints about the new class and related GSE lending, one source said that when you factor in the additional costs of building to this new class or homes standards that Clayton-MHI are leading, the consumers who buy them are not going to save money, or get lower payments, even with the GSEs lower interest rate.

Recall that in San Antonio last year, in a room with a few dozen MHI members, Tim Williams of 21st said that the Berkshire Hathaway lender’s wants to make sure that the GSEs don’t take only their top tier credit “traunch.”

Well, it seems that this plan currently avoids taking any loans away from 21st or Vanderbilt. So Tim Williams, former MHI Chairman and still 21st President and CEO, will get his wish.

Put differently, this plan if it fails or succeeds, purportedly harms the bulk of would be and existing consumers. It does so to the benefit one major conglomerate that also does site building. The plan is finding quiet resistance on several fronts from MHI’s own members. 

 InfographicMobileManufacturedHomeManufacturedHousingIndustryFactsDataResearchMobileManufacturedHomeLivingNews

 

But the voices are muted because of the Smoking Gun track record.   You can learn more about that by clicking the linked box, below, for that report.

 

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

 

These are some of the explosive comments signaled last week, in the prior report that is linked from the box below.

 

Explosive Comments on Duty to Serve Manufactured Housing Lending from Well Placed Sources

 

Clever Moat Building?

This new class of homes is arguably clever as a tool to eliminate over time more of Berkshire’s competition. By causing some industry firms to invest in a product, it will tend to get those producers ‘dug in’ to continue the plan. They may be following a lead whose Clayton iHouse and iHouse 2.0 both failed. 

But in the meantime, how many thousands of consumers who wanted to refinance 21st Mortgage Corp or Vanderbilt Mortgage and Finance loans – Berkshire Hathaway brands – at a lower interest rate will be left out in the cold? Millions of their HUD Code homes don’t qualify for a program that Congress mandated?  How is that possible, or even sufficient to meet the legal mandates?

Rephrased, this is de facto a head shot against the interests of:

     millions of existing manufactured home homeowners,

     aims at any plants and companies that don’t participate in the plan,

     bending Fannie Mae and Freddie Mac to the will of Berkshire Hathaway, and it was accomplished in closed door meetings that the GSEs, and MHI won’t release the minutes to.

The standards arguably fail in the essence of the Duty to Serve, namely, to provide more lower cost financing for millions of renters.

The American Dream, Arguably Among the Most Profitable, But Least Understood Stories in the USA Today

 

Let the Consumer Choose

The Daily Business News on MHProNews last Saturday said that #HousingChoice should be part of the mantra of the industry’s independents. 

#HousingChoice

Housing Choice, Where Modular, Manufactured, Tiny, Conventional Housing Crisis, MHI and MHARR Intersect

 

Consumers need to be educated to accept what millions have already benefited from. What’s good for consumers is also a strong market for investors, lenders, sellers, communities, suppliers, and others.

Mark Weiss, JD, President and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR) said months ago that the Duty to Serve was a mandate.

 MHARRMarkWeissIfCongressHadMeanttheDutytoServeToBeOptionItWouldNotHaveCalledItADutyDefintionofDutyIsMandatoryResponsibilityDailyBusinessNewsMHProNews

 

Weiss also argued that this roll out of the GSE program was set to benefit only a few companies.

 

ManufacturedHousingAssocRegulatoryReformMHARRMarkWeissDTSFHFA-GSEsGoingtoLargestBusinessesCorpAffiliatesDailyBusinessNewsMHProNews

Collage by MHProNews.

 

It’s not MHI’s VP Jenny Hodge’s fault if new manufactured home shipments are declining. MHI’s president is said to “turn red” when embarrassed or upset. So, how “red” does Richard ‘Dick’ Jennison glow today, after he’s done reading this analysis? 

How red with anger will resident groups become once they figure out that Berkshire Hathaway and MHI – which they arguably dominate – plus the GSEs have ignored them in favor of more expensive housing?

How mad will community owners be if they map out the trend lines, and realize that this plan shafts them too?

Clayton, MHI, and the GSEs won’t formally respond to such concerns. But MHProNews has had tips from ‘inside’ this program, on the GSEs side of the fence.

 

ManufacturedHousingProNewsMHProNewsConfidentialTipsDocumentsNews

To report a news tip, click the image above or send an email to iReportMHNewsTips@mhmsm.com – To help us spot your message in our volume of email, please put the words NEWS TIP in the subject line.

 

As one of those sources experienced in financing told MHProNews, the way this program was developed was “completely backwards.” Instead of listening to the industry, and finding ways to meet the needs, the GSEs dictated standards that were set only for this new class of homes. 

The evidence and the comments from an array of sources suggest that this is no accident. It was an arranged plan. It was rigged from the GSE side, and from the producers side. This plan was unveiled in Las Vegas, we are told that many walked out of the presentation in disgust or protest.

Manufactured Housing Institute “Walk Out,” “Cover Up,” and Shock at their Vegas Event

 

It’s as that MHI producer said, a slap in the face of the industry. And MHI now wants members to open up their checkbooks and renew their association membership for a plan their biggest member logically engineered, aimed at harming their own interests.

 

 

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?

 

It was on a different topic that Marty Lavin said it, but doesn’t it apply here?  As an MHI Producer said, “This program clearly was not “duty to serve.

Based upon the evidence and the track record, MHProNews advises the industry’s members to explore their options with MHARR, MHIdea and NMHCO. More on this in the links below and the days ahead.We Provide, You Decide.” © ## (News, analysis, and commentary.)

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Housing Choice, Where Modular, Manufactured, Tiny, Conventional Housing Crisis, MHI and MHARR Intersect

December 1st, 2018 Comments off

 

ClaytonHomesLogoManufacturedHousingInstituteLogoAssocRegulatoryReformHousingChoiceWhereModularTinyConventionalHousingCrisisSolutionMeets

Photos from Clayton website, and the logos are the properties of their respective organizations, provided here under fair use guidelines for news media. Text graphics and collage by MHProNews.

It is one of the most controversial issues in the manufactured housing industry today.  Through their apparent power at the Manufactured Housing Institute (MHI), Clayton Homes has backed the notion of a “new class of manufactured homes.”

 

It is a thorny issue, as there are various, divided views on the matter.

 

Certainly, every company has the right and ability to act according to its own perceived interests, within the norms of the law and ethical restraints.

  • If a production company so desires, it can build widget shaped homes and call it a new class of manufactured homes.
  • A firm or organization could say that all new homes should have bull-nosed exterior corners or inverted pyramid shaped roofs in order to get special financing from Fannie Mae or Freddie Mac.
  • Or one could use less esoteric notions, and opt instead for making gutters, downspouts, higher-pitched roofs, and garages available options.

But such details have arguably been incorrectly framed from the start.  Shouldn’t buyers of whatever kind of home they want that meets basic safety, energy, and durability standards be given equal choice for housing in the marketplace, and for financing too?

Rephrased, shouldn’t there be a simple mantra ofhousing choice applied?

The Government Sponsored Enterprises (GSEs) of Fannie Mae and Freddie Mac have a federal legal mandate since 2008 that they somehow managed to dodge for a decade. Now, instead of offering the lower-cost home-only lending that about 80 percent of manufactured home customers select, instead, they provided a program that is only useful for a new, untested, and special kind of HUD Code home?

  • That special kind of home is what Clayton said they wanted, why?
  • And why is that GSE lending pushing a program that is only for land-home loans, which leaves most land-lease communities and the bulk of the retail sales of manufactured homes out in the cold?
  • How do those forced-fits foster housing choice?

 

Housing Choice Should Become Part of the MH Industry’s Mantra

  • Shouldn’t those who want to buy an already federally regulated HUD Code manufactured home be allowed to choose that or any other kind of safe and durable housing they want and are able to purchase?
  • Shouldn’t all housing shoppers who can demonstrate the decades of proven durability of their housing choice be allowed to have the same kind of financing options that conventional housing buyers have been able to access for decades?
  • Shouldn’t home buyers have the right to buy an entry-level or residential-style HUD Code manufactured homes with parity of financing?
  • Isn’t parity of financing an important part of how potentially millions of more price- and payment-sensitive renters can afford to buy a home of their own?
  • So if the clear logic of all of the above are obvious, why did MHI, Fannie Mae, and Freddie Mac hold closed door meetings – refusing to release the minutes of said closed door meeting discussions – which resulted not in more chattel lending, but rather in loans geared only to this so-called, ‘new class of manufactured homes’ that are backed by Clayton?

 

Affirmatively Furthering Fair Housing, a Novel Yet Proven Solution to the Affordable Housing Crisis That Will Create Opportunities, Based Upon Existing Laws

 

Isn’t this new class of homes – and their accompanying Fannie and Freddie lending – just another back-door or oblique way of blocking access to more low-cost lending? Isn’t that effort obviously being led by the Berkshire brands in manufactured housing?  Doesn’t it remind you of the blast-from-the-past, courtesy of 21st Mortgage Corp, that is shown in their letter below?

 

21stMortgageCorpTimWillamsJune112009LetterBerkshireHathawayWarrenBuffettClaytonHomesManufacturedHousingIndustryDailyBusinessNewsMHProNews

Click the image above to download a larger sized version of this 21st Mortgage Corp Letter.

 

Isn’t this new class of homes merely a revised and open version of Smoking Gun 3, where 21st Mortgage cut off lending to thousands of operations that didn’t carry Clayton product?  See the linked report that follows immediately below, plus more related reports further below for added details.

 

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

 

We Already Have Had State Coded Modular Homes for Decades, So, Why this ‘New Class’ of HUD Code Homes?

Several voices from various parts of the industry have noted that modular housing already – on paper – had access to the same land/home mortgage lending that conventional housing enjoys.

Indeed, FHA, VA, and USDA already give parity of lending to HUD Code manufactured homes, as well as modular housing, so long as a proper installation and other lending guidelines are met.

Many manufactured home producers already built both “HUDs” and state-coded modular homes.

But HUD Code manufactured homes have widely outsold modular home building for decades. MHI’s own periodic data reflects that point.

When the goal for thousands of land-lease manufactured home communities, hundreds of manufactured home retailing independents, and MHARR has long been to get the GSEs to fully support manufactured homes with personal property loans, where was the logic of MHI pushing ‘behind closed doors’ the use of GSE lending only [???] for this new class of homes?

Hold that thought.

Hold that notion closely, because what the stated goal of MHARR and MHI began with on Duty to Serve seemed on the surface to be the same thing.  That was the apparent intersection, on paper, that virtually everyone in MHVille said they wanted more lending from the GSEs.

But what MHI ended up doing was redirecting their energy to get GSE lending only for their so-called ‘new class of homes.’  Even the new MHI self-defense, self-promotion video makes that reality a key point, as the screen capture from their new video below reflects.

 

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Screen capture with commentary and MHI’s logo are a collage by MHProNews, which faithfully reflects their “We’re Using Our Momentum Leveraging the Creation of a New Class of Manufactured Homes.” First, what momentum? Second, why the need for a new class of homes? Manufactured housing builders have made residential style homes since at least the 1980s. Buyers could always option in or do on-site whatever they wanted and can afford. It’s therefor a head fake, an apparent ruse that seemingly limits GSE lending to only a tiny sliver of the market that could already be served by modular coded factory-built homes, or by existing residential style HUD Code manufactured homes. This new class of homes is a costly waste of time, save for the fact that it diverts lower-cost financing. Who benefits from that fact?  A monopolist, perhaps?

BloombergShipmentNewManufacturedHomesFactoryBuildRebuildDailyBusinessNewsMHProNews

Third-party to the industry Bloomberg’s shipment data of HUD Code homes reflects that there is a modest recovery, but that the manufactured home industry is still about 75 percent below its 1998 high water mark hit during the last 30 years.

If you want to sell more manufactured homes, this new class of homes is utterly illogical on the surface.  Manufactured housing roared during the 1990s compared to today.  Some claim it was only a sugar-high, based only on bogus lending.  But that claim ignores the reality that those home buyers wanted a manufactured home in the first place. In the mid-to-late 1990s and early 2000s, numerous researchers believed that the EXISTING class of HUD Code manufactured homes was the solution to the affordable housing crisis.

EricBelksyManufacturedHousingIndustryManufacuredHomeManufacturedHousingInstituteResearchDataAffordbleHousingMHProNewsDailyBuisnessNews575

Why did Belsky miss his predicted date? Because it came before Buffett’s entry into MH? See Smoking Gun 3.

So why this need for a new class of homes?  Why not rediscover the proven affordable HUD Code homes, already improved by the Manufactured Housing Improvement Act of 2000?

Two Great Laws Already on the Books NOW,  Can Unlock Billion$ Annually for Manufactured Housing Industry Businesse$, Investor$

 

If you want to encourage the acceptance of HUD Code manufactured homes, then this Clayton/MHI backed ‘new class of homes’ is demonstrably counterproductive on the surface.

Keep in mind that a researcher for the Fannie Mae Foundation some two decades ago already noted back then that manufactured homes merited better lending, placement, zoning, and other treatment. Such facts alone should make it hard for a GSE today to backtrack on their own foundation’s research.  For that report, see the link below.

 

“Why Advocates Need to Rethink Manufactured Home Quality,” Harvard, GSE, Genz, “High Satisfaction”

 

So, this new class of homes makes no sense, unless – unless – there is a hidden or unstated agenda?

  • Is this new class of homes just another monopolistic ploy to expand Berkshire’s Moat in MHVille?
  • And as has been noted previously, isn’t this once more using access to capital or lending to harm the interests of the majority of producers, in favor of one that is also selling site built housing?

 

Machiavellian “Godfather” – Sam Zell, Warren Buffett, Capital, Lending and Crossed Lines in Manufactured Housing

 

The Risk to Existing Manufactured Home Owners

Furthermore, isn’t there an obvious risk that the value of millions of existing manufactured homes will be undermined by this so-called new class of homes?

That isn’t a merely rhetorical question.  Because a senior contact with one of the GSEs admitted to MHProNews that it was a potential hazard.

How would millions of manufactured home owners react to not only not getting GSE chattel lending, but instead, having Clayton-led MHI working in a fashion that undermines the resale values of their homes?  Doesn’t that open the door to a possible class-action lawsuit, against the GSEs, MHI, and Clayton?

An MHI-only member messaged the following to our publisher this week, “You seem to have [a] conceptual IQ that is more important than spelling ability.” That’s nice and clever, but the matter is simply deductive reasoning or logic.

Everything that MHI has done with respect to their so-called new class of homes has been aimed to sideline opposition to it. That isn’t ‘forging consensus,’ is it? Isn’t that silencing opposition or reason-based concerns?

Isn’t what Clayton/Berkshire Hathaway lenders in manufactured housing want is to keep their choke-hold on lower-cost home lending, while promoting their own growing interests in conventional housing, all at the same time?

 

WHERE IS THE LOGIC OF HAVING MANUFACTURED HOMES THAT MAY AS WELL BE MODULARS?

Unless it was to derail GSE lending, and harm independents, all by another slight-of-hand?

All magic tricks are gimmicks, ploys – tricks. The hand is quicker than the eye. Something looks or sounds cool and good, and razzle dazzle presentations are built around it with high-cost consultants who will naturally say what the ones who wrote the check want said. That’s what a state association executive, an MHI member, has told MHProNews.

Some people will always follow a given con, that’s why tricks exist – they work on some people.

This new class of homes is a purported trick, and that is arguably why Richard ‘Dick’ Jennison would not go on with his public presentation at Louisville last January. He apparently feared having to answer questions from the Daily Business News or from members of the audience, who came armed with questions supplied by MHProNews.

 

 

It is also why Fannie Mae arguably cancelled an interview with MHProNews that their media contact had already agreed to do.  What caused that last minute cancellation?  Note that they cancelled only after they knew that among our questions would be some that focused on the genesis of how this new class of homes.

It’s Clayton and MHI, isn’t it?  How else does one explain that BOTH GSEs wanted the same thing?

 

MHARR Exposes GSES’ Failure On Chattel Financing Before Congress

 

What’s Overlooked

The genius of the HUD Code is performance-based standards that superseded other local housing code stipulations. That performance based method keeps housing costs lower for marginal buyers who won’t qualify for $150,000-$225,000 priced housing. Yet the HUD Code achieves that without sacrificing safety or durability.

MostMenAppearnNeverConsideredWhatHouseIsNeedlesslyPoorAllTheirLivesHenryDavidThoreauManufacturedHomeLivingNews

All of the above are HUD Code manufactured homes, built years before the Clayton-MHI backed new class of homes. Newcomers to the website not familiar with modern manufactured homes, learn more by clicking the image above or the link here.

 

There have long been those who argue the HUD vs MOD matter.  Our publisher said years ago that all of factory-built housing should agree not to undermine each other’s products.  Automakers don’t undermine entry-level cars when selling a Rolls Royce. Besides, more expensive modular homes can have their own headaches, as do site built housing, as a new report yesterday underscored.

 

“No Good Deed” – Brad Pitt, Make It Right Foundation Sued for Defective Modular Housing, NBC News, More Video

 

  • Let modular builders do whatever the law allows.
  • Let HUD Code builders build entry-level or more residential-style homes, in any ethical manner that they wish.
  • Ditto for tiny housing, prefab, conventional builders, and so on down the list of legitimate, safe and durable housing providers.

But the Housing and Economic Recovery Act of 2008 (HERA) which gave the Government Sponsored Enterprises (GSEs) of Fannie Mae and Freddie Mac the Duty to Serve Manufactured Housing didn’t mandate any changes to the federal HUD Code.  The GSEs should be providing lending on entry level HUD Code homes, including chattel loans, not just on these pricey new semi-modular housing units.

ManufacturedHousingAssocRegulatoryReformMHARRMarkWeissDTSFHFA-GSEsGoingtoLargestBusinessesCorpAffiliatesDailyBusinessNewsMHProNews

Collage by MHProNews.

 

This new class of homes is arguably a Trojan Horse, a blind alley, a grifters trick.

YouGetMoreOfWhatYouEncourageLessofWhatYouDiscourageMartyLavin

The logic of this statement can be applied to a variety of cases.

 

And sadly, the money trail and evidence – see links below – point to Clayton, 21st and Vanderbilt engineering this via MHI. That means that better lending would be unavailable to the majority of potential manufactured housing customers, as well as to those in communities or private land that may want to refinance their high cost Berkshire Hathaway loans at a lower rate.

 

KennyLipschutzQuotePoorJobOfLobbyinginMHIndustry-postedMHProNews48thMHINCClist

The charade calls for a federal investigation into MHI and the manufactured housing industry’s Berkshire brands, which sources suggest may already be underway.

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 publicly make a cogent explanation?

 

Housing Choice should become part of the industry’s mantra. For our part, we will spotlight those issues that obscure the common-sense of making manufactured housing another ‘affordable housing choice‘ that home seekers can make with their heads held high, without having to jump through any special and limiting hoops.

 

Duty To Serve, “Complete Waste of Time” per Tim Williams, CEO/21st Mortgage; POTUS Trump, Warren Buffett Insight$

There’s more to come on this in the days ahead, so stay tuned to the only source in manufactured housing trade media that tackles the tough topics with facts, evidence, money trail, reason, and moxie. See the related reports, further below. “We Provide, You Decide.” © ##(News, analysis, and commentary.)

NOTICE: Readers have periodically reported that they are getting a better experience when reading MHProNews on the Microsoft Edge, or Apple Safari browser than with Google’s Chrome browser. Chrome reportedly manipulates the content of a page more than the other two.

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Related Reports:

“Take the MH Advantage Challenge – Can You Tell the Difference?” Fisk of Sarah Edelman, Director of Duty to Serve, Single-Family Mortgage Business for Fannie Mae

GSEs’ “Duty To Serve Underserved Markets” Plans

 

Fannie Mae Touts MH Advantage Program, But Manufactured Housing Association Slams Plan as “Illegitimate,” “Bait and Switch”

Warren Buffett, Charlie Munger, Fannie Mae, Freddie Mac, Berkshire Hathaway Backstory

Machiavellian “Godfather” – Sam Zell, Warren Buffett, Capital, Lending and Crossed Lines in Manufactured Housing

Bloomberg “New Home for $90,000? Manufactured Housing Is Making a Comeback” Reveals MH Media Challenge

 

Secretive “NEW” Class of Manufactured Housing Raises Serious Concerns

FHFA Comments on Duty to Serve Manufactured Home Lending due by Midnight Tonight, with MHProNews Regulatory Comments

November 2nd, 2018 Comments off

 

FHFAlogoCommentsDutytoServeManufacturedHousingFannieMaeDailyBusinessNewsMHProNews

As a reminder to readers, the Federal Housing Finance Agency (FHFA) said the following last month about a request by Fannie Mae to modify their Duty to Serve (DTS) manufactured housing plan.

Here’s the release below, which will be followed by the MHProNews attached comments and related links.

 

FHFANewsReleaseDailyBusinessNewsMHproNews

 

Washington, D.C. – The Federal Housing Finance Agency (FHFA) has announced that it is requesting public input as part of the Agency’s consideration of proposed modifications to Fannie Mae and Freddie Mac’s (the Enterprises) 2018-2020 Underserved Markets Plans (Plans) under the Duty to Serve program. 

The Duty to Serve regulation allows an Enterprise to request to modify its Plan at any time.  However, FHFA must provide a non-objection to a proposed modification for them to become part of an Enterprise’s Plan.  FHFA has determined that public input would be helpful in considering four of Fannie Mae’s twenty-two proposed modifications that would each make a substantial change to the content of its Plan.  Freddie Mac has submitted one modification that FHFA considers to be a modest correction and, as a result, FHFA is not seeking public input on this proposal.  Enterprise technical edits are not subject to public input or FHFA’s Non-Objection.

FHFA requests public input on the proposed modifications to the 2018-2020 Underserved Markets Plan by Nov. 2, 2018 via the dedicated Duty to Serve page on FHFA’s website at www.FHFA.gov/DTS or via mail to FHFA Division of Housing Mission and Goals, Seventh Floor, 400 Seventh Street SW, Washington D.C. 20219. 

About Duty to Serve

FHFA issued a final rule on Dec. 13, 2016 to implement the Duty to Serve provisions mandated by the Housing and Economic Recovery Act of 2008.  The statute requires the Enterprises to serve three specified underserved markets – manufactured housing, affordable housing preservation, and rural housing – by increasing the liquidity of mortgage investments and improving the distribution of investment capital available for mortgage financing for very low-, low-, and moderate-income families in these markets. 

The rule requires each Enterprise to adopt a three-year Underserved Markets Plan detailing the specific objectives and activities they plan to implement to fulfill this mandate.  The activities proposed by the Enterprises will continue to be subject to FHFA review and non-objection to ensure compliance with the Enterprises’ charter acts, safety and soundness standards, and other conservatorship and regulatory requirements.  These Plans went into effect on Jan. 1, 2018. 

Submit Input

##

Our publisher’s regulatory comments on AFFH are linked here, and are to be considered as part of our submission to the FHFA.

Our publishers comments on DTS are linked here.  It includes what should be headline news.

See the related reports, linked further below. “We Provide, You Decide.” © (News, analysis, and commentary.)

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Related Reports:

“Take the MH Advantage Challenge – Can You Tell the Difference?” Fisk of Sarah Edelman, Director of Duty to Serve, Single-Family Mortgage Business for Fannie Mae

 

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

 

Duty to Serve (DTS) Manufactured Housing “Confidential Documents,” Draft and Downloads, FHFA, GSEs

 

Warren Buffett, Charlie Munger, Fannie Mae, Freddie Mac, Berkshire Hathaway Backstory

September 26th, 2018 Comments off

 

FanniMaeFreddieMacLogosGuruFocusBerkshireHathawayLogoCharlieMungerWarrenBuffettHollyLaFonPhotosDailyBusinessNewsMHProNews600

Arguably at the heart of the affordable housing crisis is an access to lending for the most affordable homes built in America, manufactured homes.The Enterprises” of Fannie Mae and Freddie Mac are mandated by the Housing and Economic Recovery Act (HERA 2008) to support manufactured home lending under the ‘Duty to Serve,’ or DTS for short.

 

The “Federal Home Loan Mortgage Corp. (FMCC) (Freddie Mac), a government-sponsored home mortgage lender, was delivering 23% returns on equity and trading for less than eight times estimated earnings when Buffett touted the investment to Fortune Magazine in 1988,” writes Holly LaFon, an editor for GuruFocus.

You’ve got a low price/earnings ratio on a company with a terrific record,” Buffett told the magazine. “You’ve got growing earnings. And you have a stock that is bound to become much better known to equity investors.”

The Fortune article cited factors why Berkshire Hathaway Chairman Buffett and Charlie Munger, the Vice Chairman of Berkshire, were particularly attracted to Freddie Mac. ”I can’t think of a more tangible compliment to the stock than to buy every damn share we are allowed to,” Munger said.

By 2000, Berkshire was the largest shareholder of Freddie Mac, said LaFon, explaining that the “stock had soared to between $41 and $64 per share, for a sizable gain. His view on it changed, though, and he unloaded nearly all of his Freddie Mac and Fannie Mae shares that year, according to his testimony to the U.S. Financial Crisis Inquiry Commission in May 2010.”

HollyLaFonGuruFocusLinkedInCompositeDailyBusinessNewsMHProNEws

Brad Bondi, deputy general counselor of the commission, asked if Buffett if he sold because the stocks were no longer good investments.  Per GuruFocus, Buffett responded that he “didn’t know they weren’t going to be good investments” but became “concerned” about their management.

The Motley Fool, another investment-focused operation, said that Buffett colorfully said: I figure if you see just one cockroach, there’s probably a lot.”

They were trying to -– and proclaiming that they could increase earnings per share in some low double-digit range or something of the sort,” Buffett reportedly said. “And any time a large financial institution starts promising regular earnings increases, you’re going to have trouble, you know?”

Now, they are dealing essentially with government-guaranteed credit, so we know about that and we had it ratified subsequently about what has happened,” Buffett said. “So, here was an institution that was trying to serve two masters: Wall Street and their investors, and Congress.”

And the truth was that they were arbitraging the government’s credit, and for something that the government really didn’t intend for them to do,” the Berkshire chairman told the commission. “And, you know, there is seldom just one cockroach in the kitchen. You know, you turn on the light and, all of sudden, they all start scurrying around. And I couldn’t find the light switch, but I had seen one.”

The Daily Business News reported recently on a related commentary by Forbes contributor, David Marotta, who said that in 2012, that the entire presidential race should come down to a single question. “Who caused the financial crisis of 2008?” By the sounds of Buffett’s testimony, he didn’t cause it, but he did apparently believe that there was a crisis coming.

That crash, combined with other maneuvers linked below, led to a historic drop in manufactured housing shipments.

Figure1MobileManufacturedHomeSalesSHipmentsVsExistingingNewHouseSalesManufacturedHousingiinudstryDataMHProNews

Freddie Mac and Fannie Mae’s stock prices did not begin to crash until seven years later in 2007 when mounting home foreclosures led to unsustainable losses. In 2008, Buffett passed when Freddie Mac approached him about participating in a capital infusion. See that related report later, at the link below.

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

They’re [the GSEs, Fannie and Freddie] looking for help, obviously. And the scale of help is such that I don’t think it can come from the private sector,” Buffett told CNBC. Fannie and Freddie are still under the supervision of the Federal Housing Finance Agency (FHFA).

As regular Daily Business News readers know, there’s been a swirl of controversies around Mel Watt, FHFA, the GSEs, and the tepid way that the GSEs are meeting the decade old required Duty to Serve (DTS) manufactured housing. See related reports, further below.

Recall too that earlier this year, GuruFocus and Seattle Times, both did reports on Clayton Home and allegations of how Buffett’s manufactured housing brands engaged in monopolistic practices.

Seattle Times -Federal Investigations-Berkshire Hathaway’s Clayton Homes, GuruFocus Spotlights Buffett’s Clayton’s “Unethical,” Monopolistic Moat

There is no questioning the overall Buffett and Munger success at operating Berkshire’s investments. But does this once more spotlight some of the ways that success has occurred.  Upcoming related reports will be forthcoming in the days ahead. Stay tuned, and sign up for our emailed updates, further below at the right. That’s this evening’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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Related Reports:

Duty To Serve, “Complete Waste of Time” per Tim Williams, CEO/21st Mortgage; POTUS Trump, Warren Buffett Insight$

 

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

The Rich, Famous, PreFab Homes, Manufactured Housing, Hypocrisy, and You

 

Freddie Mac’s Manufactured Housing, Myths vs Facts – Your Professional Thoughts?

August 10th, 2018 Comments off


ManufacturedHousingMythVsFactFreddieMacDutyToServeDailyBusinessNewsMHProNews

We’ll weigh in on this Freddie Mac handout promoting manufactured housing another time, but would value that of the readers of Daily Business News on MHProNews.

 

Here it is, below. We just have this suggestion, as you look at this handout from Freddie Mac, meant to promote manufactured housing.  Please consider it from all angles.

  • What do you like?
  • What do you think could have been different?
ManufacturedHousingMythVsFactFreddieMacDutyToServeManufacturedHousingIndustryDailyBusinessNewsMHProNews

Download the full size document, at this link here.

  • What might have made this handout intended for home-shopping consumers better?
YourCommentsDailyBusinessNewsMHproNEwsLikeDislikeNuetralAnGIF

Your Comments, Feedback, or Tips email at this link. Or Connect via LinkedIn and comment.

Please feel free to send email us your comments, at the link above.  Your thoughts can be on or off the record, just be clear which it is.  Thank you. “We Provide, You Decide.” © ## (News, analysis and commentary.)

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Fannie Mae Touts MH Advantage Program, But Manufactured Housing Association Slams Plan as “Illegitimate,” “Bait and Switch”

June 5th, 2018 Comments off

FannieMaeIntroducingMHAdvantageManufacturedHomeLoanEvolvingWithIndustry

In a letter to the Manufactured Housing Institute (MHI) and Manufactured Housing Association for Regulatory Reform presidents, Jonathan Lawless, Vice President of Fannie Mae advised the two national trade associations of their news “MH Advantage” program for manufactured homes.

 

The opening from the letter from Lawless to the two national trade association CEOs opens as is shown below.

LawlessOpeningtoRichardJennisonMHIMarkWeissPresidentManufacturedHousingAssocRegulatoryReformMHARRDailyBUsinessNewsMHproNews550x505

Click here or below for the entire Fannie Mae letter to MHI and MHARR.

Rephrasing, manufactured homes that don’t fit the program won’t get financing.

The entire letter from Lawless, which was obtained by the Daily Business News, is linked above as a download.

Fannie Mae, as attentive MHProNews readers may recall, has drawn fire for being a member of MHI.

The GSEs have also been called out by House Financial Services Committee Chairman Jeb Hensarling for lobbying, a charge the federally regulated home finance giant denies.

Update on Fannie Mae Lobbying, and Manufactured Housing Controversy

A letter published by MHARR leaned into Lawless and Fannie Mae, saying the plan is not acceptable.

MarkWeissJDPresidentCEOManufacturedHousingAssocRegulatoryReformDailyBusinessNewsMHProNews“…the MH Advantage Initiative, both in its underlying concept and premise, is in fundamental conflict with the DTS mandate – and suffers from other fatal defects – which render it wholly unacceptable to MHARR.”

MHARR’s president – an attorney and multi-decade industry veteran – began to carve up the Lawless letter as follows.

In relevant part, your June 4, 2018 letter states: “MH Advantage homes [will] have design features – developed after consultation with a range of manufacturers – more often associated with site-built homes.” (Emphasis added). The purpose of DTS, however, is not to change the fundamental character of HUD-regulated manufactured housing to be more like site-built homes, or to funnel DTS-based financing to higher-cost homes that are not in the mainstream of affordable HUD Code manufactured housing production,” wrote Weiss.

The DTS mandate, rather, as MHARR has noted on multiple occasions, was enacted by Congress as:

(1)  a congressional finding that Fannie Mae (and Freddie Mac) have not — and still do not — properly serve the manufactured housing market and manufactured housing consumers, despite existing Charter obligations to support homeownership opportunities for very low, low and moderate-income Americans, as well as  

      (2) a remedy for that specific failure.”

Weiss said that the failure of the predecessor to this program, MH Select, completely missed the mark, saying: “As the abject failure of the earlier Fannie Mae “MH Select” program,” saying that no loans had been made under the prior program.  Weiss said, MH Select, “…resulting, according to available information, in exactly zero loans…”

Indeed, the fact that it has taken ten years to get even this far, after decades of failing to serve the manufactured housing market (as determined by Congress), shows that Fannie Mae has no real intent to comply with DTS as established and designed by Congress.”  HERA 2008 is the legislation that established the Duty to Serve (DTS) manufactured housing, and after a 10 years, and it is only now that a chattel lending program is being rolled out.

Instead, prejudice, discrimination and outright bias against those prospective homebuyers – who the GSEs were formed to serve and DTS was specifically enacted to serve and benefit – has been the hallmark of Fannie Mae (and Freddie Mac) policy for decades, leading to the DTS mandate in the first place,” said Weiss.

“…As such, this program does not constitute a legitimate implementation of DTS as much as a diversion, “bait and switch,” and illegitimate end-run around the consumers and policies that DTS was enacted in order to advance,” the Washington, D.C. based MHARR president said.

This circumvention of the purposes and objectives of DTS, moreover, does not even begin to address other significant competition-based concerns regarding the specifics of the MH Advantage Initiative, including compliance criteria that were developed behind closed doors, in closed proceedings accessible only to select participants (as determined by Fannie Mae); and — according to information available to MHARR, onerous energy requirements that have been advanced by the largest industry manufacturers from both a marketing and regulatory perspective, and specifically favor those manufacturers,” Weiss stated, adding, “Nor does any of this even begin to address the possible intersection between the MH Advantage Initiative and a secretive “new class” of manufactured homes being advanced by the same large manufacturers – and their trade organization, the Manufactured Housing Institute (MHI) – which supposedly was “well received by Fannie Mae and Freddie Mac.”

Perhaps to Weiss point, the Fannie Mae website features two photos with their public announcement of the program, both from the company that MHI’s chairman represents.

The “MH Advantage” Initiative, therefore, is less about implementing DTS for its intended beneficiaries than avoiding the type of market-significant securitization and secondary market support for mainstream, affordable manufactured housing that DTS was designed and intended to produce.  As such, it violates DTS and is wholly unacceptable to MHARR.”

 

The View of the Finance Fray from MHProNews…

The Daily Business News warned the industry months ago that the so-called “new class of homes” being promoted by MHI was potentially the latest “trojan horse” from MHI. The articles linked below can be read later, and are provided as a reference and for more details.  But

 

Manufactured Housing’s “Trojan Horse”

 

The Fannie Mae letter should heighten that concern, as those retailers, communities, and producers that don’t participate in a plan tailored to the “big boys” at MHI.

 

Secretive “NEW” Class of Manufactured Housing Raises Serious Concerns

 

As MHProNews has warned, there are potentially monopolistic implications from these actions.

 

Wisconsin Housing Alliance – an MHI ‘Affiliate’ – Amy Bliss’ Messages Raise New Anti-Trust Issue

Several pending reports related to this topic are on the horizon.  But the bottom line for now is that this move by Fannie Mae may signal yet another attempted end-around by larger MHI member companies aimed at smaller independent ones — and it may be happening with one or both GSEs assistance.

MHProNews has reached out to Fannie and MHI for comment. While there are many possibilities, based upon years of prior disappointments on DTS, this does not look promising. Time will tell, more to come. “We Provide, You Decide.” © ## (News, analysis, and commentary.)

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Related Reports:

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

Duty To Serve, “Complete Waste of Time” per Tim Williams, CEO/21st Mortgage; POTUS Trump, Warren Buffett Insight$

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

President Trump Spotlights Factory Home Builder in Speech, Proven Promotion, Support of Industry Advancement

 

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CEOs Debate Over Affordable Housing, One Touts Manufactured Housing Concerns

May 1st, 2018 Comments off

CEOsDebateOverAffordableHousingOneToutsManufacturedHousingConcernsFoxBusinessManufacturedHomeDailyBusinessNewsMHProNews

In spite of a strong market, American families are facing unaffordable housing, said Fannie Mae CEO Timothy Mayopoulos on FOX Business Tuesday.

The greatest challenge in housing now is not home price appreciation but really affordability for families,” Mayopoulos in his Mornings with Maria interview.

The government-sponsored enterprise, which is one of the primary providers housing finance for homebuyers, cites lack of wage growth as the culprit.

Rents and home prices are increasing at a faster rate than wages are,” he added.

What manufactured home industry professionals will note is this. Despite Fannie Mae’s bold promises made at this or that event or press release to support manufactured housing, Fannie’s CEO didn’t mention manufactured homes in this mix of needs for affordable housing at all.

In comments reacting to this video interview, The solution to housing affordability has been in front of Fannie Mae’s figurative nose for years, in the form of federally regulated manufactured homes. But both GSEs have resisted providing manufactured housing with any [meaningful] type of support. Congress got so fed up that it passed a law imposing a “duty to serve” manufactured housing on both GSEs. Ten years later, though, Fannie and Freddie have done virtually nothing, and are doing their best to keep it that way,” MHARR president and CEO, Mark Weiss, JD, told MHProNews. 

MHI provided no comments on this topic. ## (News, analysis, and commentary.)

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MHI Lender Shakes Up DTS and MLO Rule Discussions

March 23rd, 2018 Comments off

MHILenderShakesUpDTSMLORuleDiscussionManufacturedHousingIndustryFinancingDailyBusinessNewsMHProNews

A veteran Manufactured Housing Institute (MHI) lender’s controversial comments to the Daily Business News are bound to shake up discussions about two hot button industry topics.

 

Those two subjects are:

  • the Duty to Serve (DTS) Manufactured Housing, mandated by Congress a decade ago, and
  • the Mortgage Loan Originator (MLO) Rule, established by the Consumer Financial Protection Bureau (CFPB) during the Obama Administration, and run under Richard Cordray’s leadership for several years.

A senior lender in manufactured housing, whose company is an MHI member, said that Triad Financial Services turned over their data to the GSEs “about 5 or 6 months ago.

The same informed source said that Credit Human, formerly known as CU Factory Built Lending, committed to turning over their data to the GSEs as well. That hand-off was reportedly more recent.

Therefore, the two Berkshire Hathaway owned lenders – 21st Mortgage Corp and Vanderbilt Mortgage and Finance (VMF) – were the 2 major holdouts.

The industry’s larger chattel lenders split along ‘party lines,’ with Berkshire Hathaway not providing data to the GSEs, and non-BH lenders providing data to Fannie Mae or Freddie Mac.

That loan performance data, said the GSEs, was needed to responsibly implement home-only “chattel” loans.

Despite assurance from MHI to members that they were doing ‘all that can be done’ to promote the Duty to Serve, the revelation that the Berkshire Hathaway owned lenders gave no data to the GSEs undermines that contention. MHI and the Berkshire Hathaway companies have previously been invited to clarify or confirm these concerns. Doesn’t their silence speaks volumes?

The comments confirmed once more the public statement in Tunica that Fannie Mae’s Paul Barretto made earlier this week, that Berkshire Hathaway failed to provide them with any relevant data.

According to Barretto, that meant that the bulk of the data they had was from the Conseco loan pool, which dated back to the late 1990s and early 2000, and were widely known for problematic origination and thus poor loan performance.

The combination of comments by the MHI lender and Fannie Mae’s Barretto underscored key revelations that help explain a decade of delays in implementation of the Congressionally mandated Duty to Serve Manufactured Housing.

That lack of data claim was in turn was used by the GSEs to do only a relatively modest pilot program by Fannie and Freddie. Those pilot projects are to be rolled out over 3 years, in support of the most affordable permanent housing in America.

 

Preserving Access…err…S. 2155

Once more, the potential for the Manufactured Housing Institute (MHI) to make a deal on the Mortgage Loan Originator (MLO) Rule – which some in media are mischaracterizing as “steering” – directly with the non-profit consumer groups was asserted by an MHI member lender.

Why does it matter?

First, because while the odds of passage on S 2155 are up, it is no guarantee that the manufactured housing amendment to the bill will survive a House/Senate conference committee.

2018-03-23_0736S2155ManufacturedHousingIndustryDailyBusinessNewsMHProNews_001

As or more important, the recent reveal by the lender and Barretto both belie MHI’s official claim that they’ve been doing everything possible to advance the cause of more lending in manufactured housing.

If Barretto’s public comment in front of dozens of industry pros, plus the MHI lender and other sources are to be believed, then what MHI claims “just ain’t so.”

As MHProNews exclusively reported, the lender noted above confirmed what other sources have already said, which is that the non-profit “consumer groups” were ready to deal on the MLO rule, so long as the points and fees that mostly Berkshire Hathaway lenders wanted would be dropped from Preserving Access.

IshbelDickensPhotoNationalManufacturedHomeOwnersAssocNMHOALogoDailyBuisnessNewsMHproNews

Dickens and others reportedly offered a compromise, which MHI declined. Consumers and independent industry professionals alike have suffered as a result.

 

As the MHI member lender told MHProNews, the art of compromise is the essence of political advancement.

Yet, “MHI’s leadership” was unwilling to compromise at all.

To rephrase, and emphasize – per our sources — MHI allegedly misled their own members and the industry at large

Why?

The likely answer has been supplied by the Manufactured Housing Association for Regulatory Reform (MHARR), which tacitly supported Preserving Access, but felt that bill had no chance for passage.

MHARR President and CEO, Mark Weiss, JD, said that every day that DTS isn’t fully and robustly implanted is “a gift” to the Berkshire Hathaway owned lenders.

MHARRMarkWeissIfCongressHadMeanttheDutytoServeToBeOptionItWouldNotHaveCalledItADutyDefintionofDutyIsMandatoryResponsibilityDailyBusinessNewsMHProNews

MHARR tacitly supported Preserving Access, but also privately felt the bill had no chance. Years later, they’ve been proven correct.

The same logic can be applied to S 2155.  By creating a burden for competitors, the larger Berkshire Hathaway companies could endure the discomfort, knowing it would cause their industry competitors even more pain.

MHARR has called for a congressional investigation of the DTS matter, and has hinted at other possible steps that they may take.  MHI’s failures – whatever the cause or motivation – to get meaningful relief, has resulted in hundreds of once independent retailers and several HUD Code home producers vanishing in a few short years.  That fact is demonstrated by MHI’s own data.

 

State Association Voices Largely Silenced 

Even more state association executives have privately confirmed for the Daily Business News what then MHI Chairman, Tim Williams, said after he took over a conference call.  Williams reportedly threatened and pushed reluctant state executives to promote the Preserving Access to Manufactured Housing Act with their state members (see Gold Rules report, linked below along with other resources for more details).

Yet, former MHI Vice President Jason Boehlert said in a formal statement that Preserving Access was unlikely to pass while then President Barack Obama was in the Oval Office. And it was Warren Buffett who supported then POTUS Obama’s reelection effort.

JasonBoehlertManufacturedHousingInstituteSeniorVPLogoMHIlogoQuoteMHProNews

Those numerous and clear disconnects between what MHI claimed, and what Warren Buffett did are so blinding, some fail to see it.

But a growing number are grasping the apparent sham of MHI saying one thing, while Buffett was personally working for the opposite.

The only logical implication is that MHI’s elected and staff leadership were driving the MH Industry at large into years of wasted and costly efforts.

Why?

Publisher L. A. ‘Tony’ Kovach has observed what other voices inside or outside of MHI have said. Berkshire Hathaway owned companies benefit if the Preserving Access bill passes, or not.

Furthermore, the longer more new HUD Code home shipments are diminished, the more retailers and communities sell out for less than their value, or are forced out of business.

That in turn would lead to more closures of the independent HUD Code producers, who once supplied the failed or consolidated independents retailers and communities.

IBISWorldAtlanticManufacturedHousingIndustryDailyBusinessNewsResearchReportsMHProNews

If MHProNews were the only source with these concerns, then one might be more inclined to dismiss it. But several sources inside and outside the industry raise the same or similar concerns. Where there is smoke, there is fire, right?

So while the affordable housing crisis rages, manufactured housing had the brakes put on it.  Frank Rolfe, an MHI member, said last year that the industry is its own worst enemy.

It’s a process the fits perfectly with Warren Buffett’s “the Moat” principle, which the two posted videos below confirm.  But for someone to really understand the issues Kevin Clayton and Buffett himself raise, they must do what Buffett does.  Invest the time to research and read.

What Buffett says in brief about “the Moat” – increasingly seen as a monopolistic plan – Kevin Clayton confirms in detail.

This is parallel to the reasons why the Nation recently named Buffett as a monopolistic player in industries, including manufactured housing.

The Nation specifically pointed a finger at Clayton Homes, and their Berkshire Hathaway sister companies.

 

They Win, While a Growing Number of Independent Businesses Lose…

 …or is There Another Option?

MHProNews has received multiple contacts from veteran attorneys who believe that an antitrust case could be made, by federal authorities, but also by independent businesses suing under civil antitrust laws that carry triple damages.

Among those attorneys are those who would do the case on contingency.

Meaning, the law firm collects only if they win the case or come to an agreed upon settlement. With many contingency cases, the attorney doesn’t require the normal hourly fee.  The reason an attorney does a case on contingency is because they believe they can get more by taking a percentage of a case, then the hourly fee would be. That reduces the risk for the plaintiff, while increasing the drive by the suing law firm.

As the nation is caught in an economic vice that the affordable housing crisis has fueled, manufactured housing is – as MHLivingNews touted years ago – the solution that’s hiding in plain sight.

MHI’s shadow boxing on regulatory issues has stymied and delayed the industry’s recovery. The very professionals who are paid to promote the industry, in this view, have been rewarded for failure to achieve any meaningful regulatory relief.

Given several on-the-record statements by

  • Clayton Homes CEO, Kevin Clayton,
  • Tim Williams of 21st Mortgage,
  • Warren Buffett’s well publicized principles,
  • and documents obtained by MHProNews on 21st letterhead,

there is mounting evidence which seems to support the allegations that the thousands of industry retailers – and numerous producers – failed or sold out cheap, all while MHI postured ‘advocacy’ on their behalf.

Some believe that the push for S. 2155 compromise now, is precisely because of the ‘heat’ that MHI has been getting from MHProNews coverage of their problematic handling of Preserving Access.

As was reported yesterday, a growing number of the industry’s professionals have taken these MHProNews reports seriously.

While some continue to believe MHI et al, others were in Tunica this week taking practical steps to distance themselves from options linked to Berkshire Hathaway owned brands.

 

The Return of Common Sense?

Common sense says you don’t feed a dog that’s proven to bite your or others’ hands,” says Tony Kovach.

LATonyKovach-QuestioningNYSAAteam-NewYorkHousingAssociation-MHProNews-com-PhotoCreditMarkSimon-250x167

L. A. “Tony” Kovach, photo by Mark Simon, shows Kovach engaging with SAAs in NY. Kovach is the publisher of the industry’s two largest and most popular trade media, MHLivingNews.com and MHProNews.com.

The pattern seems to be this.  MHI takes the wrong position on an issue, and only after extended pressure, do they finally relent and pivot to the more logical stance for industry independents.  So there is no glory for them in finally taking a correct step, after months or years of allegedly bad ones.

Meanwhile, the majority of the industry’s independent members have suffered. Some have sold out for less than the true value of their business, or lost their once successful businesses altogether. No wonder law firms are interested in working a legal action against this sort of behavior on contingency.” Tony Kovach said.

While MHProNews naturally values on-the-record comments, such off the record insights from the lender noted above can be invaluable for the industry’s independents.

The concept can be digested in minutes.

But to fully digest the nuances of what is taking place, one must do as Warren Buffett himself does: it may take a few hours of reading for all of the facts to be fully understood.

Buffett sees the value of studying the issues, but how many independent professionals do? Will more dig deeper in the days ahead? “We Provide, You Decide.” © ## (News, analysis, and commentary.)

Related Reports:

Progressive “Nation” Reports on Monopolies Cites Buffett, Clayton, Others – MH Industry Impact?

Busted! “Failure Bonus” Paid-Richard “Dick” Jennison, CEO Manufactured Housing Institute-per MHI Document$

Warren Buffett, “the Moat,” Manufactured Housing, Berkshire Hathaway, Clayton Homes, 21st Mortgage, Vanderbilt, Wells Fargo, NAI…

“Follow the Money” – Controversial Urban Institute Report on Manufactured Housing

Killing Off 100s of Independent Manufactured Home Retailers, Production Companies – Tim Williams/21st Mortgage “Smoking Gun” Document 2

Keith Anderson, CEO Champion Homes, MHI ‘New Class’ Monopoly Concerns Memo, ‘Harms Owners, Independents’

Inside Scoop Mulvaney-CFPB and MHI, Berkshire Hathaway Company Meeting Detail$

State Associations, Companies Quit Membership in Manufactured Housing Institute, (MHI), One Explains in Writing, ‘Why?’

Lawsuits for Triple Damages – Anti-Trust, Anti-Monopoly Law, Manufactured Housing, and You

Plot Twist – Duty to Serve – Freddie Mac CEO Layton Called to Accountability w/Congressional, Administration Leaders Over New Manufactured Home Lending Revelations

Study Recommending New Manufactured Housing Association for Independent Retailers, Communities, Lenders, Others Released

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Plot Twist – Duty to Serve – Freddie Mac CEO Layton Called to Accountability w/Congressional, Administration Leaders Over New Manufactured Home Lending Revelations

March 5th, 2018 Comments off

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The Duty to Serve (DTS) program for manufactured housing industry retailers, communities and potential home buyers took what may be a problematic twist in news revealed, according to a memo obtained by the Daily Business News.

 

The memo to Donald H. Layton, Chief Executive Officer, Freddie Mac – one of the largest lenders in the nation, cc’d Congressional leaders and Trump Administration officials as follows:

  • Hon. Michael Crapo
  • Hon. Sherrod Brown
  • Hon. Jeb Hensarling
  • Hon. Maxine Waters
  • Hon. Jeff Sessions
  • Hon. Mick Mulvaney
  • Hon. Gary Cohn
  • Hon. Melvin Watt

The memo said that, “At a February 26, 2018 telephone conference meeting of the MHIT, Freddie Mac representative, Ms. Simone Beatty, indicated, for the first time, that Freddie Mac plans to pursue implementation of a “pilot program” — on an expedited basis (i.e., during June and July 2018) — for loans on an undefined “new class” of manufactured homes, apparently based on the exclusionary (i.e., limited to MHI members) / proprietary MHI “new class” of manufactured home research and development activity.”

The MHIT meetings are supposed to be confidential, sources tell MHProNews. 

But when the Daily Business News inquired, how can an important public policy matter like this that impacts thousands of businesses be kept confidential?’ no reasonable response has come forward from any source yet.

Secrecy over DTS regulations defies common sense.  MHProNews has called on the Federal Housing Finance Agency (FHFA), the Government Sponsored Enterprises (GSEs) and the Manufactured Housing Institute (MHI) to produce all minutes from all meetings, for complete transparency in a process that critics say has notably provided Berkshire Hathaway lenders with a windfall every year that the program has been delayed.

 

Per the memo, obtained today by MHProNews, and linked here and here as a download, says in part:

 

“...a participant in Freddie Mac’s “Manufactured Housing Initiative Task Force” (MHIT), has learned that Freddie Mac apparently plans to divert an unspecified portion of its already minimal and wholly inadequate support of the manufactured housing market under DTS to a so-called “new class” of manufactured homes which is currently being researched and developed on an exclusionary, proprietary basis by the Manufactured Housing Institute (MHI), under the direction and authority of a control group comprised, in relevant part, of executives of the industry’s three largest manufacturers.”

As noted, the memo CC’d key Washington leaders, concludes by saying:

For Freddie Mac, after ten years of inaction on DTS, followed by a blatantly inadequate DTS implementation plan, to now even consider diverting any aspect or portion of DTS to a “new class” of proprietary, high-priced, non-affordable manufactured home, is indefensible, inexcusable, in direct defiance of DTS, and unacceptable,” said Mark Weiss, President and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR). Weiss says MHARR will take any and all steps necessary to see that this rerouting of DTS monies won’t go to the controversial, so-called ‘new class’ of manufactured homes.

FHFA Publishes Fannie Mae’s and Freddie Mac’s Underserved Markets Plans for Duty to Serve (DTS) Program

Once more, the link to the full memo is here, or is available here as a downloadable PDF of the document provided. ## (News, analysis, and commentary.)

Related:

‘Over Target’ Reactions, WHA Exec (ret) Ross Kinzler, Won’t Defend MHI Policies & Points to Prior MHI Failure

Keith Anderson, CEO Champion Homes, MHI ‘New Class’ Monopoly Concerns Memo, ‘Harms Owners, Independents’

Wisconsin Housing Alliance – an MHI ‘Affiliate’ – Amy Bliss’ Messages Raise New Anti-Trust Issue

Duty To Serve, “Complete Waste of Time” per Tim Williams, CEO/21st Mortgage; POTUS Trump, Warren Buffett Insight$

Manufactured Housing’s “Trojan Horse”

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Two Great Laws Already on the Books NOW,  Can Unlock Billion$ Annually for Manufactured Housing Industry Businesse$, Investor$

January 26th, 2018 Comments off

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Stating the Obvious for Clarity. Manufactured housing professionals are busy doing what they do, day-by-day.

People go to work, invest in, or own a business in order to earn a good living.

 

With the affordable housing crisis, the manufactured home (MH) industry ought to be doing far better than it is. Almost everyone in the industry agrees on that point.  The housing crisis is a fact that Skyline-Champion – or others in the industry – point to in their investor presentations.

Skyline Corp, Champion Homebuilders Conference Call Presentation Facts, Figures, Forward-Looking Statements, Planned Merger Detail$

There are two great laws – not fair, or decent, but great laws – that are already on the books that properly used and implemented could propel manufactured housing to the top of the nation’s choices for affordable housing.

Fully implementing those two federal laws would be good for:

  • Federal, state, and local governments that are spending tens of billions annually on affordable housing measures that are unable to keep pace with the growing needs in the U.S.
  • Good for investors, and current manufactured housing business owners, who could profit far more than they currently do, by providing the needed housing in the markets that they serve.
  • Good for realtors, developers, and could prove useful for many small builders.
  • Most of the risk would be born by investors, because once understood, they will grasp the ‘no brainer’ nature of the opportunity.
  • To rephrase, the private sector could profitably solve the housing crisis, so long as the public sector – notably, the federal government – implements these two laws.

Those Two Laws Are?

The Manufactured Housing Improvement Act of 2000 (MHIA 2000) and the Duty to Serve (DTS) Manufactured Housing mandated by the Housing and Economic Recovery Act of 2008 (HERA).

What is keeping these laws from being properly understood and widely implemented?

Simply put, forces inside and outside of manufactured housing.

EricBelksyManufacturedHousingIndustryManufacuredHomeManufacturedHousingInstituteResearchDataAffordbleHousingMHProNewsDailyBuisnessNews575

The external issues are exacerbated by the fact that the industry’s post-production sector lacks a national association that is actively working for the interests of independent producers, retailers, and communities.

Appealing Manufactured Housing Institute (MHI) Marketing, Finance Booklet Reviewed

The national ‘umbrella’ association – which is the de facto post-production association, is the Manufactured Housing Institute (MHI).

Facts Matter – Mr. Obama’s “Alternative Universe,” Trump Admin, Investors & Politicized Manufactured Housing Data

A recent and detailed example of how they are failing the industry at large – be that failure by accident, arrogance, or design – is linked above.

There are a few things that the HUD could be doing to promote the solution they are legally charged with regulating. They have failed to do so under the now terminated leadership of Pam Danner, J.D., who was the HUD’s manufactured housing program office administrator.

    • The true nature of how manufactured homes evolved from trailers houses in the 1930s to 1950s, to mobile homes in the 1950s to the early 1970s, to modern manufactured housing starting on June 15, 1976 is widely misunderstood within the federal government, as well as by state and local governments.
    • The MHIA 2000 features the so-called “enhanced preemption” which has never been properly implemented. If that one law was being enforced by HUD, it could be a revolution for cities and towns across the country. While the video that follows focuses on ‘upper end’ manufactured homes, the principle – and law – applies to entry level manufactured housing too.
    • The Duty To Serve (DTS) has been throttled by industry politics. See the Tim Williams/21st report linked, further below.

  • In additional to those two laws, FHA lending – part of HUD’s jurisdiction – is not being fully used. As reported last year, there are only two lenders under FHA’s current “10/10” rule that could be making home only (chattel) manufactured home loans.  Those two lenders are both owned by Berkshire Hathaway, Vanderbilt Mortgage and 21st Sources within 21st told MHProNews last year they suspended offering Title 1 loans. FHA needs to revisit that rule, and make Title 1 lending more broadly available to others who will put that law to work for consumers.
  • Finally, other kinds of lending that now exist are not properly understood. The GAO report, linked above, demonstrates that even with higher interest rate chattel loans, manufactured homes are still far more affordable than conventional housing or rentals.

MonthlyHousingCostsGAOConventionalHouseApartmentsRentalHousingManufacturedHomeDailyBusinessNewsMHProNews

fanniemae-2011-chart1-affordable-manufactured-housing-posted-daily-business-news-mhpronews-

The Trump Administration has said that it will be in the business of keeping promises and enforcing the law. They’ve demonstrated a consistent trend of attempting to do exactly that in their first year in office.

With the just announced top-to-bottom review of HUD’s manufactured housing program, the timing is perfect for the industry to spotlight how the Berkshire Hathaway dominated Manufactured Housing Institute (MHI) has routinely failed the industry.  The timing is perfect to underscore how MHI’s failures to properly engage explains in part how the HUD Code manufactured housing program is disappointing in its mission under the MHIA 2000.

The reports linked from this Daily Business News post will outline how those failures have occurred.

A little math explains precisely why manufactured housing has been allowed to flounder.

In a trillion-dollar a year housing industry, Harvard University’s Eric Belksy and others noted some years ago that manufactured housing was poised to surge to the fore-front of housing. When Belsky wrote those words, he knew about the lending problems that already existed at that time.

Simply put, by throttling lending and allowing heavy regulatory burdens to remain in place, Warren Buffett’s Berkshire Hathaway owned companies quickly became the number one producers and retailers of manufactured housing.

Kevin Clayton in the video interview shown explains in his own words how Buffett hated both foreign and domestic competition.  He repeatedly references “the Moat,” and Clayton candidly says that Buffett preaches “the Moat” to his company CEOs.

Kevin Clayton Interview-Warren Buffett’s Berkshire Hathaway, Clayton Homes CEO

It’s the truth hiding in plain sight.

Buffett supported big government candidates, such as Barack Obama and Hillary Clinton, who in turn supported regulations that – combined with his own choking off of lending to third parties – killed off over time, or forced to sell out for less – thousands of independent communities, retailers and independent home producers.

HUD’s new leadership must be made aware of this pattern.

While this may appear to be political, it is rather a question of crony capitalism at the highest levels.

It is worthy of congressional oversight, which some Democrats have called for too.

Maxine Waters Statement, Preserving Access Manufactured Housing Act 2017, Warren Buffett, Clayton Homes

President Trump has personally signaled in broad terms his willingness to use anti-trust (anti-monopoly laws). This is a bi-partisan issue.

President Raises the M-Word, “Monopoly,” Plus Manufactured Housing Industry Market Update$

The time to free manufactured housing to fully and properly use those two good laws, and implement others on the books such as FHA, could be a new economic boom for millions of Americans.

Implementing those 2 good laws can save taxpayers billions, while earning private enterprise billions.

MHProNews estimates that at current HUD Code manufactured home prices, building the 8 million needed affordable housing units is worth about $500 billion dollars at retail. After taxes and expenses, that’s billions of dollars to the bottom lines of business owners and investors.

That’s why award-winning Alan Amy said the industry’s billionaires are gobbling up manufactured housing.

It’s the truth hiding in plain sight.

By shadow boxing appearing to advocate, when they are in fact failing to be effective for any but a few big players – the Manufactured Housing Institute (MHI) is apparently guilty of being a tool of Berkshire Hathaway and what Maxine Waters and others have called their “near monopoly.”

GSE’s Duty to Serve MH Rigged, Benefits 21st, VMF, Clayton, Buffett’s Berkshire, Harming Consumers & Independents, per MH CEO, Calls for Congressional Investigation

Many believe there is nothing ‘near’ about the monopolistic power of Berkshire Hathaway.

It exists. That’s not a slam on the thousands of good people working for those companies. Many of those Clayton, 21st Vanderbilt staffers are among our thousands of readers.

But the monopolistic pattern ought to be a potential indictment on those who’ve misused their influence and power to the harm of thousands of businesses, millions of consumers, and taxpayers.

The time is now to act to enforce those two good laws.

The time has come clean up the mess that crony capitalism working with MHI and the heavy hand of government has produced.

What say you? “We Provide, You Decide.” © © ## (News, fisking, analysis, commentary, links to documents, allegations, comments from members, etc.)

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We agree with Warren Buffett on the value of the lessons of history, reading and research. Without those deep insights, the wool can be pulled over other people’s eyes. We respectfully disagree with Mr. Buffett’s politics.

By L. A. “Tony” Kovach.

Kovach is the award-winning managing-member of LifeStyle Factory Homes, LLC,
parent to MHProNews, and MHLivingNews.com.
Both are #1 in their categories.

Kovach is one of the most endorsed and recommended MH industry professionals in all of manufactured housing.