Posts Tagged ‘interest rate’

Stabilizing Home Prices could make Home-buying More Feasible for First-time Buyers

February 24th, 2016 Comments off

homebuilders__biz_journals__creditThe S&P/Case-Shiller index of home prices in 20 U. S. cities rose 5.7 percent from Dec. 2014, while nationally prices increased 5.4 percent year-over-year, according to bloomberg. While gains in payrolls and low jobless claims may be making home buying more attractive, continuing low-interest rates and more affordable properties for first-time homebuyers will be necessary to prolong the housing recovery.

Ongoing recuperation in home prices is a sign that the U.S. recovery is continuing, despite the market volatility that is leading some to think otherwise,” said Dov Zigler, a financial markets economist at Scotiabank. The steady pace of improvement “continues to chip away at the share of negative-equity mortgages in the U.S., which ultimately improves people’s abilities to move and find jobs, and increases the prospects for gains in home sales.”

The index is based on a three-month average, which indicates the Dec. figures reflect Oct. and Nov. as well. Led by gains of 11.4 percent in Portland, Oregon, all 20 cities in the index showed a year-over-year increase; thirteen cities experienced year-over-year prices climb faster than in Nov.

Meanwhile, new home construction slipped in Jan. as housing starts dropped 3.8 percent to an annualized rate of 1.1 million, the weakest in three months.

While the unemployment rate fell to an eight-year low of 4.9 percent, the lowest in eight years, and wages rose more than expected, the Federal Reserve will examine the housing market to help determine if the economy can handle another interest rate increase. ##

(Photo credit: bizjournals)

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

Capital One Arranges $7.7M Loan for Manufactured Home Community

December 4th, 2015 Comments off

CA_Chico__casa_de_flores_mhc__mhvillage_creditMHProNews has learned from abladvisor that Damon Reed, Senior Vice President and Capital One’s Director of MHC Finance, arranged a $7.7 million refinance Fannie Mae loan for Casa de Flores manufactured home community (MHC) in Chico, California. The owner intends to retire higher-rate interest debt and make improvements to the community.

We recommended that the sponsor execute a forward rate lock in April and close the loan when the prepayment penalty period burned off,” Reed said. The owner was able to lock in a low interest rate.

A 309 home site MHC with historically near full occupancy, Casa de Flores offers a range of amenities including a secure RV storage facility.

The 10-year fixed-rate loan has 9.5 years of yield maintenance. ##

(Photo credit: MHVillage–Casa de Flores MHC, Chico, CA)

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

Oregon Assists First-time Homebuyers with Low Rates

September 3rd, 2015 Comments off

manuf home  golden west david patton albany democrat heraldMHProNews has learned from ktvz that Oregon offers first-time homebuyers the opportunity to purchase a home at below-market interest rates, according to Oregon Housing and Community Services (OHCS), including manufactured homes (MH).

Using the proceeds from tax exempt revenue bonds, the Oregon Bond Loan program has two options: the first offers an interest rate of 3.25 percent; the second provides a 3.75 percent interest rate and the opportunity to use up to three percent of the loan for closing costs. In addition to MH, the loan is applicable to any home or qualified condo in the state.

Aubre Dickson, chair of the State Housing Council, said,Buying a home is a life-long dream for many families and provides them with an opportunity to secure a better future for themselves and their kids. Purchasing a home at an affordable interest rate is one of the best ways to ensure they will be able to continue to remain stable in their homes for years to come.

OHCS partners with participating mortgage lenders, local governments and non-profit organizations to assist homebuyers. ##

(Photo credit: albanydemocratherald/David Patton-Golden West manufactured home, Albany, Oregon)

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

Honda Agrees to Cease Discriminatory Automobile Lending

July 20th, 2015 Comments off

mortgage    andyenstallblog  creditThe Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) resolved an action with American Honda Finance Corp. over charges the auto maker’s pricing policies discriminated against people of color, resulting in their paying higher interest rates, regardless of creditworthiness, than white borrowers for auto loans.

As part of the settlement, Honda will alter its pricing system to minimize dealer discretion, which will reduce the risk of discrimination. The company will also pay $24 million in restitution to a settlement fund that will go to borrowers who were affected by the discriminatory lending from January, 2011 to July 14, 2015, as MHProNews has learned. Honda will report to the CFPB on its compensation activity.

When consumers purchase an automobile on credit, the dealer can facilitate the loan through a third-party, like Honda’s finance arm, which charges the dealer an interest rate, and then the dealer might negotiate a higher interest rate with the customer at their discretion. This formula resulted in Honda charging minority borrowers from $150 to over $250 more for their auto loans, thereby violating the Equal Credit Opportunity Act.

In addition to the $24 million restitution, Honda will also reduce or eliminate dealers’ flexibility in adding to the interest rate. The CFPB did not assess penalties against Honda because of the auto maker’s response in adjusting its policies to eliminate discriminatory lending.

The CFPB is committed to creating a fair marketplace for all consumers, and other auto lenders should take note of today’s action,” said CFPB Director Richard Cordray. “Honda’s proactive decision to move to a new pricing and compensation system demonstrates industry leadership and represents a significant step towards protecting consumers from discrimination.

As MH Pros should consider this action in the light of the CFPB regulations that impact MH lending.  Check with your attorney or state association for greater insights, ##

(Image credit: andyenstallblog)

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

Rio Plaza Obtains Refi Package of $5.9M

June 4th, 2015 Comments off

rio_plaza_mobile_home_estates_king_city_ca__google__creditCapital One’s Manufactured Housing Finance has engineered a $5.9 million Fannie Mae fixed-rate loan to refinance Rio Plaza Mobile Home Estates (MHC) in King City, California. MHProNews has learned from multihousingnews the community is located in Monterey County 50 miles southeast of Salinas.

The 110 homesite all age manufactured home community (MHC), built in 1973 is 99 percent occupied and is located in a residential neighborhood close to Highway 101. The owners chose to refinance at a lower interest rate before their current loan matured. Damon Reed, Capital One senior vice president and Director of MHC Finance, said, We were able to have their loan approved and locked before treasuries started moving higher. As a result, we were able to lower their interest rate from 6.15 percent to the 4.75 percent range.

The 30-year fixed-rate loan has a 30-year amortization payable on an actual/360 basis, and provided funds for future acquisitions by the unnamed owner. ##

(Photo credit: google-Rio Plaza Mobile Home Estates, King City, CA)

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

The Path to the Rebirth of the Manufactured Housing Industry

June 3rd, 2015 Comments off

mhi  photo credit  mh under productionThrough a series of interviews with manufactured housing industry professionals, politicians and consumers and a bevy of statistics and graphs, MHLivingNews and MHProNews publisher L. A “Tony” Kovach documents the pitfalls and stumbling blocks that prevent manufactured housing from becoming a major player in meeting the growing need for affordable, unsubsidized housing for many low and middle income residents of the United States. Not only would it provide housing—it would also provide a leg up for people to build equity, achieve independence, a sense of security, and realize the American dream is not just for the one percent at the top, but for everyone.

Alan Amy of Royer Homes in Opelousas, LA, who has been selling manufactured homes for 44 years, says if federal regulations changed, 20,000 more homes would sell immediately. Sam Landy, CEO of UMH Properties, Inc. says his company is doing okay renting manufactured homes. “We lend money to people who have ten percent down and 30 percent of their income covers their lot rent and finance payments. We lend them that money at only eight percent interest rate,” says Landy. He says it’s ridiculous to think they might want to sell a home to someone who cannot afford it. He states, “The current status of the law is, if we made a good faith determination that said someone had the ability to repay, and somebody second-guessed us later, the cost to litigate that would wipe out any profit we made from nine other good deals.

Quality is up, complaints are low, the three largest trade shows are strong and growing, and production, despite the regulatory roadblocks, continues to expand, as MHProNews reported in an earlier story. Both sides of the aisle in Congress as well as consumer groups agree that federal regulations need to be modified.

As Jan Hollingsworth reported in Dodd-Frank and Manufactured Home Financing:The Place where Good Intentions and Unintended Consequences Collide, when Eric Powell tried to borrow $7500 to buy his father’s manufactured home that was sited on family-owned property in Louisiana, because of the Dodd-Frank Act that created the Consumer Financial Protection Bureau (CFPB), despite good credit the only loan he could find was at an interest rate of 35.91 percent. The monthly payment was only $350 a month. Loans under $20,000 on manufactured homes generate as much as $3000 in points and fees to originate because the CFPB classifies them as “high cost,” which drives lenders away.

While former Congressman Barney Frank agrees the measure that bears his name was not intended to affect manufactured home loans as it has, the CFPB ignores industry lenders who have tried to explain how MH lending differs from traditional mortgages. Dick Ernst, involved in MH finance for 40 years, says, “It’s been a three-year battle with CFPB, because they have the discretion to change things. It’s been very discouraging, because they have a certain mindset.” That mindset does not accept that consumers are the ones suffering from not being able to purchase a manufactured home, regardless of the interest rate, the price, or any other factor.

One reason chattel loans bear a higher interest rate is the cost of repossessing a ten to 30 ton home if the buyer should default. Another reason is the lack of a secondary market that could amass a portfolio of loans and spread the costs out over thousands of them. Originators of chattel loans have to carry their own paper.

Kovach says better education of public officials, consumers and the media would go a long way towards correcting the misconceptions that surround the MH industry. Passage of The Preserving Access to Manufactured Housing Act would not only spur the MH industry to build more homes, but that in turn would create jobs and more demand for furnishings and other home goods as well as financial services products.

The federal government is said to spend $40 billion in rent subsidies annually. Says Kovach, “Why not channel those dollars into programs that can yield home ownership via quality, appealing, affordable, energy-saving manufactured housing? Why channel dollars into the hands of those who will keep raising rents, and yield no equity for those millions involved?

Home ownership is the single best path to a higher net worth. For those who say that manufactured homes depreciate, what they fail to consider is that site-built housing dropped like a rock in value when the mortgage crunch hit in 2008. Conventional housing is artificially supported by federal policies and lending support. To deny a similar application to MH is a form of policy discrimination. Leveling the playing field helps consumers, lenders, public coffers, professionals – indeed all involved.

For the complete article, please click here. ##

(Photo credit: Manufactured Housing Institute-new manufactured homes under construction)

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

Idle Wheel Mobile Home Park Rolls to a New Owner

May 27th, 2015 Comments off

mfg community  california  progressive housing creditCapital One Multifamily Finance secured an interest rate of 4.15 percent in arranging a $5 million Fannie Mae fixed-rate loan for the acquisition of Idle Wheel Mobile Home Park in Woodland, California. According to abladvisor, Damon Reed, Sr. Vice President and Capital One Multifamily’s Director of MHC Finance, arranged the financing for the sale of the 153 home site community.

Facing a financing deadline, Reed was able to seal the deal within forty days of application. Idle Wheel was built in 1961 and is 99 percent occupied. The ten-year fixed-rate loan has two years of interest-only payments, 9.5 years of yield maintenance and a 30-year amortization payable on an actual/360 basis.

In a returned call from Capital One’s corporate communications, Michael E. Bulgur tells MHProNews neither the seller nor the buyer’s name is currently available.

(Photo credit: progressivehousing-manufactured home community in California)

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

Interest Rates will Likely Ease Upwards this year, says Janet Yellen

May 23rd, 2015 Comments off

Janet_Yellen_nydailynewsFederal Reserve Chair Janet Yellen said that if the economy maintains the path of improvement it is on currently, it will be “appropriate” for the Fed to raise the Federal Funds Rate later this year, which will increase the interest rate for mortgages, according to housingwire.

Because of the substantial lags in the effects of monetary policy on the economy, we must make policy in a forward-looking manner. Delaying action to tighten monetary policy until employment and inflation are already back to our objectives would risk overheating the economy,” Yellen said in a speech to the Providence (Rhode Island) Chamber of Commerce.

Before moving ahead, as MHProNews understands, she wants to see continued improvement in the labor market, which is approaching its full strength, and has reached a level at which many economists believe will not increase inflation.

While noting that many people are voluntarily not seeking work, such as retirees, teenagers, and people caring for children at home, Yellen added “I also believe that a significant number are not seeking work because they still perceive a lack of good job opportunities.

Most members of the Federal Open Market Committee (FOMC) expect the economy to grow 2.5 percent per year over the next couple of years, said Yellen, and the unemployment rate to fall to around five percent. In any case, she expects the “pace of normalization” to be gradual and very much dependent upon the improvement of the overall economy.

She thinks it will be several years before the federal funds rate has returned to its normal, longer-run level and inflation is at about two percent. ##

(Photo credit: nydailynews-Janet Yellen)

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

Federal Reserve’s Fischer says the Fed will be Temperate in its Movement on Interest Rates

April 16th, 2015 Comments off

stanley fischer  vice chair fed  wikipedia orgAccording to an interview with Federal Reserve Vice Chair Stanley Fischer, although the economy in the first quarter was “poor,” he says the rebound is already underway with wage increases. The bond market turned negative on these remarks, according to what cnbc tells MHProNews, fearing interest rates will move up sooner rather than later. Noting that rates will rise incrementally, he says that markets “can’t depend on the current situation continuing forever—or even probably—beyond the end of this year.”

He reiterated during the interview that the Fed would like to see a little more growth in the economy, less unemployment and more wage growth before the Fed moves the interest rate which Fischer says will likely be one-quarter to one-half percent. “We have to take into account we may be making a mistake on one side or the other. We have to ask what will go wrong,” he said. “I say that if we get this in proportion, we’re going to be changing monetary policy from the most extremely expansionary we’ve been able to do in all of history, to an extremely expansionary monetary policy.

While some economists say the strong dollar is the cause of the weakening economy, Fischer says the dollar is one of many reasons affecting the economy. Fischer also says the quantitative easing by the European Central Bank has been more successful than what analysts thought at the beginning. ##

(Photo credit: wikipedia)

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

H. R. 650 will Lead to More Jobs, More Quality, Affordable Housing

April 13th, 2015 Comments off

manufactured-home   archerland2005 back slash FlickrWriting in Manufactured Home Living News, MHProNews  publisher L. A. “Tony” Kovach says those opposed to the passage of the Preserving Access to Manufactured Housing Act, H. R. 650, which is scheduled to reach the House Floor for a vote this Tuesday, are fueling the mainstream media with misinformation about MH lending and the MH industry in general.

Manufactured housing does have traditional mortgage lending through the VA, FHA, USDA and other sources.  These loans perform about as well as other mortgage loans, a fact that many MH naysayers do not know.

The other form of lending for manufactured homes is personal property loans, often called “chattel loans,” unique to MH, and that is a core issue of H. R. 650. One of the reasons manufactured home loans carry a higher interest rate than a car or boat is because moving a 20 to 50+ ton home once installed is expensive and requires expertise, if repossession becomes necessary. They are no longer “mobile homes,” a term that expired when the federal government began enforcing production standards on June 15, 1976. Modern MH cannot be hooked up to a trailer hitch by a pick up truck or car and get pulled away.

Contemporary manufactured housing is stronger, safer, more energy-efficient, greener and less costly than conventional housing,” says Kovach. Models run from entry level styles of 400 square feet up to custom-made two-story residential styles, but all are durable, made to HUD Code standards, and often exceed the quality of conventional houses, per a video interview with prior federal MH program director, Bill Matchneer, JD.

Just like any other business in the U. S. economy, lenders must be paid for their service and need a profit. However, even with somewhat higher interest rates on chattel loans, monthly payments on MH are lower than site-built homes. The U. S. Census Bureau states a manufactured home costs half as much as an on-site built home. As noted and linked above, former head of HUD Code for the MH construction and safety program, Bill Matchneer, says new MH is as well-or better- built than moderately priced site built homes.

Large banks and small community banks that once made profitable loans on MH have stopped due to current federal regulations under the Consumer Financial Protection Bureau (CFPB). MH retailer Alan Amy said his business has been curtailed by 30 to 40 percent due to the regulations.

Kovach cites estimates from MHI that each new MH home built would create one additional job, so changes brought about by HR 650 could yield about 22,400 new jobs. 

One of the inadvertent effects of the Dodd-Frank Act, as later pointed out by co-author and now former U. S. Representative Barney Frank, is its limiting of MH sales. As Kovach says, “Due to regulations and processing expenses, the cost to ‘originate’ or make a $50,000 loan on a factory-built home is about the same as making a loan on a $250,000 site-built house. There are little or no closing costs on an MH home-only loan. When you factor in the tax, and other money-saving factors, MH personal property lending is more competitive to land-home than a mere interest rate makes it look.

Additionally, the SAFE ACT prevents MH retailers from even suggesting the possibilities of lending options, where to turn for lending. “Consumer protection” in this case is a misnomer. Most people who own older, low-cost MH likely do not know they cannot obtain a loan for $20,000 to $25,000 because of CFPB regulations. These are the most affordable homes, and, in many cases the most vulnerable citizens. The same “consumer protection” likewise forces lenders out of a market they want to serve.

The National Association of Realtors, the Mortgage Bankers Association and the National Association of Credit Unions have all signed on to H. R. 650. This measure will help millions, create jobs and provide for more quality, affordable housing. Don’t be misled by the misguided mainstream media. For Kovach’s full report, see this link here. ##

(Photo credit: archerland 2005/flickr–manufactured home)

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