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Posts Tagged ‘income homebuyers’

Rep. Fincher’s Remarks Regarding HR 1779 in the Congressional Record

May 3rd, 2013 Comments off

Rep. Stephen Fincher (R-Tenn.), Rep. Bennie Thompson (D-Miss.), and Rep. Gary Miller (R-Calif.) sponsored The Preserving Access to Manufactured Housing Act, HR 1779, which will amend the provisions in Dodd-Frank that curtail the availability of manufactured housing loans. In remarks in the Congressional Record of April 26, 2013, Rep. Fincher, while noting the importance of manufactured homes as affordable housing that many families rely on, states the housing turndown resulted in an 80 percent reduction in the production of MH, the closing of 160 plants, and the loss of 200,000 jobs. He says the Consumer Financial Protection Bureau (CFPB) issued guidelines as required under the Dodd-Frank Act that will classify many manufactured home loans as predatory and high-cost under the Home Ownership Equity and Protection Act (HOEPA). He says, “ Simply put the cost of originating and servicing a $250,000 loan and a $25,000 loan are the same in terms of real dollars, but the cost as a percentage of each loan’s size is significantly different. This difference causes the smaller-sized manufactured home loan to potentially exceed the new HOEPA thresholds set by Dodd-Frank and be categorized as a high-cost mortgage and stigmatized as predatory, even though there is nothing predatory about the features of the loan. The liabilities associated with making and obtaining a HOEPA high-cost mortgage will likely prevent lenders from offering loans to low and moderate-income homebuyers, denying families access to necessary credit for new and existing manufactured homes.” Noting the business model for buying manufactured homes differs from a traditional mortgage, he adds the measure would also remove manufactured home retailers and salespersons from being classified as loan originators, providing they do not receive compensation from a lender. As MHProNews reported April 27, the Senate will be considering a similar bill. For the entire entry into the Congressional Record, please click here.

(Photo credit: Champion Homes)

CFPB Issues New Mortgage Rules

January 10th, 2013 Comments off

The long-anticipated set of mortgage rules, including the qualified mortgage, promised by the Consumer Financial Protection Bureau (CFPB) have finally been released, according to CNNMoney. Designed to correct the lax underwriting practices that led to the housing bubble fiasco, the new rules require documented financial feasibility of repaying the loan has to be fully determined by the lender before issuing the loan—income, debts, assets, credit scores, ability to take care of the home, etc. In exchange, lenders and originators will be protected from lawsuits brought by borrowers or mortgage-backed bond holders. If borrowers fall a little short in meeting all the guidelines, the mortgage may still be issued but only if the borrower can show mortgage payments do not exceed 43% of the borrower’s pretax income. MHProNews has been informed these rules take effect Jan. 21 with a 12-month trial period. Exceptions to the rules, which will be finalized this spring, include: Certain non-profits that issue mortgages to low-income homebuyers are to be exempt; some refis through the Home Affordable Modification Program (HAMP); and for certain loans made by small community lenders.

(Photo credit: globeandmail–Canada homebuyers)