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FEMA’s Manufactured Home Installations slow for Louisiana flood victims

October 3rd, 2016 Comments off
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Steve Duke, LMHA, says he could have coordinated in a week what FEMA has done in a month following the historic flooding in Louisiana. Photo credit, WAFB.

A month after the historic flooding in Louisiana, many residents are still having trouble finding housing, reports WAFB’s Scottie Hunter.

According to Hunter’s report, thousands of people have applied for a manufactured housing unit from FEMA, but as of September 30, only 169 people have been able to move into one.

The number of homes has increased from where the total was a week ago, but there’s still a lot of work to be done. FEMA spokesman Tito Hernandez said the inspection process is the main reason for the delay.

We’re inspecting hundreds of sites for sustainability,” Hernandez told WAFB. “We have to

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Toto Hernandez, FEMA.

deliver the units, but we have to inspect those units before we take them out of the staging area when we put them in the site whether it’s a commercial or private site.

Unfortunately, FEMA says taht even when the homes can be inspected, the actual inspecting takes time, too—in some case it can take days or even weeks for inspectors to locate suitable spots for the units.

Meanwhile, the Shelter at Home Program, which allows residents whose homes were damaged to still live at their house while they rebuild, is moving along rapidly. As of Sept. 29, close to 20,000 homes were registered and more than 16,000 of those homes are inspection-eligible and approximately 5,000 are good to go for construction.

Inspections are being scheduled and occurring,” Governor’s Office of Homeland Security & Emergency Management (GOHSEP) spokesman Casey Tingle said. “Construction is being started and being worked and we continue to look at how we expedite and improve the process to get all of that construction completed and final inspections done.”

The Shelter at Home Program has been able to reach close to 500 homes a day. However FEMA’s manufactured home process is still in need of improvement as it lags behind.

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Award-winning journalist, Jan Hollingsworth.

This is a surprise to those who followed Jan Hollingsworth’s recent report for MHLivingNews, when FEMA said they had learned from their past mistakes during Hurricane Katrina.

FEMA’s got their plan and it’s moving and it looks like there’s some thought to it,” Steve Duke, Louisiana Manufactured Housing Association executive director and general counsel then told MHLivingNews.We just tell them, ‘If there’s anything we can do, let us know.’

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Steve Duke, LMHA.

Our number one goal and objective is to get people out of the shelters.”

It was six weeks before FEMA could get 113 families out of shelters and into homes. I blew up that night at a FEMA meeting,” Duke said. “I could have gotten 113 families out of shelters in less than a week.

Hollingsworth’s report noted how rapidly manufactured home professionals were ready to jump in to help with the demand. For example, Alabama-based Sunshine Homes was optimistic it could supply high-quality, move-in homes within a month.

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John Bostick, president, Sunshine Homes, Red Bay, AL.

Sunshine Homes CEO John Bostick said, “Our factory is running at about two-thirds capacity. We could stretch and build a lot of homes.”

As the Daily Business News recently reported, Lexington Homes was recently awarded a major contract from FEMA for more manufactured housing. To see that report, please click here.

We’re not perfect,” FEMA’s Hernandez said. “We’re going to have some folks that are going to fall through the cracks. For that, we have an appeal process.” ##

(Image credit is as shown on the linked page.)

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Joe Dyton, for the Daily Business News, MHProNews.

Submitted by Joe Dyton to the Daily Business News, MHProNews.

Fire Safety in the Modern Manufactured Home

November 2nd, 2015 Comments off

nfpa logo  wikipedia commons creditA report by the National Fire Prevention Association’s (NFPA) John R. Hall, Jr., entitled Manufactured Home Fires documents that manufactured homes (MH), built after 1976 when MH production fell under the dictates of the Department of Housing and Urban Development (HUD), are more fire-resistant than comparable site-built homes. The study also discloses they are three times safer than pre HUD Code mobile homes from 40 years ago.

In Keeping the Home Fires From Burning: Fire Safety and the Modern Manufactured Home, award-winning consumer reporter Jan Hollingsworth

considers the debate over mandatory sprinkler systems and human no-nos that contribute to most house fire_station__modular_delray_beach_florida__m_space_modular_buildingsfires. Non-functional smoke alarms, overloaded electrical circuits and improper use of cooktops and ovens for heating are primary causes of seasonal home fires. HUD Code manufactured homes now include escape windows, flame resistant wall coverings and tough construction standards that reduce fire chances.

Deanna Fields, Executive Director of the Manufactured Housing Association of Oklahoma, says consumers can have sprinkler systems installed. “Some of our factories incorporate sprinkler systems in certain areas of the house, such as the kitchen or furnace, if the consumer wants to pay for it.

As pressreleaserocket tells MHProNews, Hall is a part of NFPA’s Fire Analysis and Research Division, and states, “A manufactured home is not a motor home or a trailer, and although it is often called a “mobile home,” it is not that either.

For Hollingsworth’s complete story about fire safety, please click here. ##

(Image credit, top: National Fire Prevention Association; bottom: mspace–modular fire station, Delray Beach, Fla.)

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

Doug Ryan, CFED, HR 650/S 682 and Manufactured Home Lending

October 9th, 2015 Comments off

doug_ryan_cltnetworkWriting in an Industry in Focus report, MHProNews publisher L. A. ‘Tony’ Kovach lines up various references and witnesses to call publicly upon CFED’s Doug Ryan to modify its opposition to the Preserving Access to Manufactured Housing Act (HR 650/S 682).

Citing Barney Frank, Marty Lavin, research done by Jan Hollingsworth, Jess Maxcy, Liz Romanchek and others, Kovach lays out a systematic case that respects CFED’s overall support of MH, while critiquing Ryan’s failure to modify his stance on personal property lending.

For the full commentary and analysis, click here. ## 

(Photo credit: CLTNetwork–CFED’s Doug Ryan)

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

Is the CFPB Protecting us from Buying Homes?

September 1st, 2015 Comments off

rent versus buy   rent-directWriting in MHHomeLivingNews, award-winning writer Jan Hollingsworth recounts the story of the older gentleman, likely a farmer, in bib overalls who visited a manufactured home dealership in Kentucky. After two hours of perusing the possibilities of different homes, he chose one. But when he asked the salesman for help in filling out the finance application, he was told federal regulations prevent manufactured home retailers from assisting customers. The man left, unhappy, and later found a salesman elsewhere who was willing to break the rules to provide the old farmer with what may be the house of his dreams.

The story highlights the incongruities written into the Dodd-Frank Act and now promulgated by the Consumer Financial Protection Bureau (CFPB). Barry Noffsinger, a regional manager for CU Factory Built Lending, one of the nation’s leading MH lenders, said, “He wasn’t asking the salesman to do anything that a real estate agent doesn’t do every day. It just makes no sense at all.

With compliance costs quadrupling in the past three years for MH lenders, as Don Glisson, Jr., CEO of Triad Financial Services says, many small banks, credit unions and other MH lenders have shuttered their MH lending operations, leaving prospective buyers to rely on high interest loans or continue renting.

While co-author of Dodd-Frank, former Congressman Barney Frank says in a letter to a constituent that the measure was not intended to apply to manufactured homes, it is since the CFPB regulations went into effect, effectively prevents those with low-to-moderate incomes who want to move from renting a home to buying a home.  These are the very people the CFPB alleges it is trying to protect. It particularly harms someone wanting to finance an MH valued under $20,000 from the sale— again, often hurting the most vulnerable.

Hollingsworth tells of a young family man with good credit in Louisiana who wanted to purchase a used manufactured home for $7500 to site on family-owned property. Unable to find an MH lender, he ended up paying a non-MH lender 36 percent interest, a payment which turned out to be less than half of apartment rental. “Our desire to buy the home outweighed our desire to not pay 36 percent interest,” said Eric Powell.

The Mortgage Loan Originator (MLO) rule which prevented the salesman from helping the farmer fill out the finance application also stems from Dodd-Frank, fall-out from the 2008 mortgage crisis that saw lenders steering borrowers to specific high-interest subprime loans in exchange for kickbacks. Although it has nothing to do with manufactured housing, the CFPB targeted the industry with special restrictions.

Realtors refer customers every day to lenders, but CFPB says they’re exempt, because they’re not being compensated. But our people aren’t either,” says MH finance consultant Dick Ernst, president of Financial Marketing Associates, Inc. There is a huge difference between suggesting a possible lender for the purchaser of an MH and “steering” them to someone who might take advantage of them.

Two-thirds of purchases of manufactured homes are financed by chattel loans, secured by the home only. Few MH retailers can afford to keep an MLO-licensed sales person on staff, so applications to finance a home are shot-gunned to every potential lender, regardless of whether the prospective consumer may qualify with those lenders or not.

In the past, a retailer could pre-qualify a buyer by accessing their credit reports and analyzing their income — just like every Realtor ® in America does — and with that info they could at least determine what lender not to send the application to,” says Glisson. When the MLO went into effect in 2014, Triad had to hire employees just to deal with the sudden onset of applicants who could not qualify for a loan.

He said, “Our origination cost per loan has skyrocketed. Pre-2014, we would approve about 50 percent of the applications we received, as they were pre-screened. Currently we approve about 30 percent … so our efficiency went down the tubes and we are working harder and spending more to make the same amount of loans. But not being able to show the customer any options is a disservice to the home buyer.

Often, prospective home buyers get discouraged after being denied time and time again, and return to the rental market. Joseph Ravenelli in Ohio was pre-qualified for a $100,000 single-family home but decided he wanted to buy a $40,000 manufactured home in a community. He was unable to find a lender for the MH, and now continues to rent.

On the other side of the coin, a woman in Kentucky had a buyer for a used $20,000 MH, but financing was not available and she finally sold it for $5,000 cash.

It’s not just smaller lenders that are leaving the MH lending business: U. S. Bank said the regulatory environment was not conducive to MH lending and withdrew that arm of its operations.

MHLivingNews publisher L. A. “Tony” Kovach quotes CFPB Director Richard Cordray when he appeared before the Senate Banking Committee last month: “I don’t know what to make of some of the problems people are raising to me … because some of these lenders are quite profitable.” Kovach says: “The agency did not respond to a recent query asking how the profitability of “some” lenders, or even one lender, relates to consumer protection or consumer access to affordable home ownership — or how it compensates for shrinking opportunities to either buy or sell low-priced homes.

Sam Landy, President and CEO of UMH Properties, Inc., no longer offers financing of MH in their many communities because of the new regulations, unless it’s third-party financing. In the past they had $30 million in loans to residents in their communities. Now, their rental market is booming.

Lenders who met with CFPB staff about the impact of Dodd-Frank on the industry came away empty-handed, with no direct answers, and no suggestion that the agency will change its rules, although it has the opportunity to do so.

However, despite opposition from the CFPB and other consumer groups, the House of Representatives passed the Preserving Access to Manufactured Housing Act, H. R. 650, which will remedy the MLO rule and return private lenders to financing MH that may sell for $20,000 and less. The companion bill in the Senate, S. 682, is expected to be voted on in the coming months.

Says Glisson: “All we want is a level playing field with the site-built real estate brokers and home builders who still have the ability to help their buyer find the best financing option for their situation.

In last month’s Senate Banking Committee hearing with CFPB Director Corday, Senator Bob Corker (R-TN), noting the impact of Dodd-Frank on many of his low-to-middle income constituents in Tennessee who are having a hard time purchasing a home, said rural communities have few rental opportunities, and payments on a manufactured home are often less than rent.

Cordray responded: “That doesn’t sound optimal from anybody’s standpoint.

For the complete article, please click here. ##

(Image credit: rentdirect)

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

Factory-Built Homes—the New Cool

July 21st, 2015 Comments off
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Photo Credit: Julie Branaman, 83DegreesMedia.

As the housing recovery sputters along from the Great Recession, trying to overcome the lowest percentage of homeownership in 20 years (63%), even with the aid of artificially maintained low interest rates, people are moving away from the McMansions with their high maintenance and trophy appearance, and paying more attention to factory-built homes, according to 83DegreesMedia.

83 Degrees Media has a reputation for covering topics that are so cool, they’re hot.  In a featured article today, they focus on the much maligned days long past of “trailer houses” and “mobile homes,” which have not been built since the federal government began overseeing the construction of manufactured homes in June, 15 1976. The technology that developed astro turf, super efficient heating and cooling systems and robotic surgeries are being applied to homes built in factories and moved to be permanently installed on an owner’s selected homesites.

Consumers are looking to buy greener, modern and less expensive homes. As award-winning writer, Jan Hollingsworth states, “A brand new entry level ‘shade and shelter’ model — with central air and all the comforts of home — can be had for as little as $30,000, while larger, multi-section models with vaulted ceilings, fireplaces, walk-in showers and spa tubs run $60,000 or more.

“For those who really want to splurge, there are multiple-story modulars with all the bells and whistles of any custom home — hand-laid ceramic tile, fireplaces framed by hardwood bookcases and high-end appliances — all for a tidy $120,000.

Bill Matchneer, a Senior Attorney at Bradley Arant Boult Cummings law firm in Pittsburgh, who once managed HUD’s manufactured housing program, says these homes are built as well or better than site-built homes.

Dr. Clivetty Martinez, (PhD) a senior executive for a global pharmaceutical firm, and her husband, Frank, a retired postal engineer, could afford most any home on the market, but have now happily chosen to live in Dover Farms, a manufactured home community (MHC) in Martin, Michigan. “At first I was leery,” Frank Martinez tells MHLivingNews. “Live in a house delivered on a truck?

Today’s factory-built homes can be hard to distinguish from traditional site-built homes. “I think the product makes a lot of sense for people coming through this recovery,” says Evan Atkinson, an award-winning Ohio retailer, developer and community operator whose family has been in the MH business since 1947. “People looking at manufactured housing today are very surprised at what they see.

Just as the overall housing market is recovering from the throes of the downturn, so the MH market is returning as well. Atkinson says the Millennials are more accepting of factory-built homes, especially in light of the rising rental market. “I think they’re feeling a little more stable in their employment situation and we’re seeing more of them coming into the housing market. They are more accepting of manufactured housing,” says Atkinson.

While the older generation typically has a mindset opposed to factory-built homes, baby boomers are more open to lifestyle choices than the preconceived notions of their parents, and are “flocking like ants at a picnic to 55+ MH communities,” in Hollingsworth’s words.

Steve Adler is the Chairman of the National Communities Council.  Adler’s father, Sydney, developed a 1,200-unit retirement community called Trailer Estates on Sarasota Bay in Florida in the 1950s, replete with shuffleboard, boat docks, a marina and clubhouse, and people waiting to move in. Noting his father was ahead of his time, Steve has developed more communities, all-age and senior 55+, like Schalamar Creek in Lakeland, Florida which has a restaurant, golf course and a full schedule of social activities.

Adlers says half of his residents move down from the north and eventually reject the isolation of a suburban home with upkeep worries, and move into one of his communities with Wi-Fi access, computer and digital photography classes, exercise equipment, and opportunities for socialization with other residents.

In the meantime, “Trailer Estates” is still bustling with pre-1976 homes next to newer manufactured models and people fishing from the dock. ##

(Photo credit: 83degreesmedia/Julie Branaman–Trailer Estates MHC on Sarasota Bay, Florida)

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

 

Foot Note – 83DegreesMedia shared the following two links and their intros for publication with permission. Some associations are already sharing the following with their members.  The photos are also by: 83degreesmedia/Julie Branaman

Trailer Estates modular home.

Factory built homes appeal to millennials, boomers across America

JAN HOLLINGSWORTH / 83 DEGREES MEDIA TUESDAY, JULY 21, 2015
Millennials looking to buy their first homes and Boomers looking to downsize find factory-built or manufactured housing to be a good alternative that offers affordable, sturdy and green living.

Soheyla, Tamas and L.A. "Tony" Kovach

Tired of renting? Get the scoop on manufactured homes

JAN HOLLINGSWORTH / 83 DEGREES MEDIATUESDAY, JULY 21, 2015
Team Kovach, husband L.A. “Tony” and wife Soheyla, of Lakeland share news about the increasingly popular manufactured housing industry through online publications and word of mouth.

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.

Will Matt Drudge, Fox or CNN Spotlight Unfair Challenges Harming Millions of Manufactured Home Owners?

May 20th, 2015 2 comments

 

Mike-Baker-SeattleTimes-Daniel-Wagner-CenterForPublicIntegrity-hr650-s682-preserving-access-manufactured-housing-act-corrected-mhpronews-com-

Correction on this photo, an earlier version did not have the proper image of Mike Baker, left.

The Seattle Times/Center for Public Integrity has allegedly targeted Clayton Homes and Berkshire-Hathaway affiliated finance companies in an attempt to derail much needed reforms to Dodd-Frank which harm millions of manufactured home (MH) owners and thousands of MH businesses.

Mike Baker and Daniel Wagner – writers of the Seattle Times articles, done in conjunction with the Center for Public Integrity – used shock tactics prior to the House of Representatives vote to attempt to derail the now-passed HR 650, which enjoyed bi-partisan support.

More recently, that writing duo turn on Warren Buffett’s firms again, in advance of a Thursday May 21st vote in the Senate Banking Committee that will include industry sought relief (S 682) from the Consumer Financial Protection Bureau regulations. Industry professionals say that The Preserving Access to Manufactured Housing Act, would mitigate the harm done to the value of millions of low-cost manufactured home owners by the unintended consequences of Dodd-Frank.

It might take a link by billion-plus monthly page views Drudge Report, or media mavens like Fox or CNN, to right the imbalanced coverage spawned by Baker’s and Wagner’s questionable journalism.

Writing in the Seattle Times, Baker says that the default rate on manufactured homes is higher than conventional housing, and uses pejorative terms about the loans such as “predatory” and “risky.” But should 97 home buyers be barred home ownership via financing others won’t offer, so that the 3 who fail in a year be spared their loss?

As a comparison, should millions be stopped from working because a small minority might quit or lose their jobs? Should subscribers to the Seattle Times digital or print publications be barred from buying their brand of news, because some every year will stop paying them? Should their publication be barred from selling ads because some advertisers will stop using them every year?

Yet that is kind of reasoning being used by Baker and Wagner. Their self-evident goal is an attempt to stir up enough shock value that blurs their use of faulty or circle reasoning, aimed at undermining support for much needed Dodd-Frank reforms.

Real Harm to Millions of Real Home Owners and Thousands of Businesses

The Seattle Times and the Center for Public Integrity (CPI) fail to balance their report by pointing out that the loss of lending that has taken place is harming the value of the lowest cost manufactured homes.

Some 20% of the homes that 20 million manufactured home owners live in would sell for under $20,000, the mark that 21st Mortgage Corporation set below which they could not safely make a loan and still hope to profit. With 8.8 million manufactured homes and pre-HUD Code mobile homes in the U.S., that 20% would represent about 1,760,000 manufactured/mobile homes (MH).

Since most MH owners live in their homes an average of about 10 years, millions may not yet realize they are harmed.

Comrades in Arms Against Reform?

Organizations like the Center for Enterprise Development (CFED) are ducking tough questions from MHProNews. Meanwhile, CFED’s Doug Ryan willingly comments to the Seattle Times or OZY Media, why? Are his comments made to other media a desperate effort to shock enough people with headlines and stories that don’t stand up well to close scrutiny? Aren’t CFED and Ishbel Dickens led National Manufactured Home Owners Association (NMHOA) harming the very home owners they claim to be advocating for? Is their ideological stance more important to them than the realities on the ground caused by the polices they advocate?

Dickens sent MHProNews an emailed reply, saying she was on vacation, and thus could not answer questions. Her “vacation” ends after the Senate vote. She can email that she is on vacation, but can’t email a simple reply on the impact of current CFPB regulations on the values of millions of manufactured homes? Or how publishers such as OZY Media are arguably harming the value of MH owners, by using improper and derogatory terminology?

CFPB Regulations harms all current Manufactured Home Lenders

By spotlighting Berkshire-Hathaway affiliated companies, Baker and Wagner are allegedly attempting to derail needed reforms of Dodd-Frank, that impact manufactured home owners and every lender in the manufactured housing space.

don_glisson_2Triad Financial Corporation is a competing company to 21st Mortgage. Triad’s President and CEO, Don Glisson Jr., has told MHProNews that his firm’s costs have skyrocketed since CFPB regulations have gone into effect.

Glisson said, “Triad has been the leading lender in the “A” credit market for over 50 years and I have personally been with the company for over 30 years. Regulations have always been a fact of life for us, but our compliance costs have quadrupled in the past 3 years alone.”

Another industry lender, formerly with US Bank, told MHProNews off-the-record that their bank’s manufactured housing loan program was profitable. But the high costs of regulatory compliance, coupled with low loan volume, caused U.S. Bank to end their manufactured housing lending program. That mirrors the official statement made by the bank when they pulled out of manufactured home lending in November, 2014.

A third manufactured home lender said off-the-record that they are glad 21st Mortgage and Vanderbilt Mortgage and Finance (VMF) make the loans they do. Why? Because in the wake of the 2008 financial collapse, loans on manufactured homes originated by 21st and VMF were crucial to the survival of thousands of MH Industry companies, which included hundreds of independent operations not owned by Berkshire-Hathaway.

Doesn’t the dismal failure to report in a balanced fashion – as Jan Hollingsworth did in writing on the impact of Dodd-Frank on manufactured home buyers and professionals – undermine the credibility of a journalist?

Senior management with every major industry lender MHProNews spoke in favor of reforms on Dodd-Frank, even if they don’t make the same kinds of loans 21st and VMF do.

Triad’s CEO elaborated on the challenges faced by their firm and other manufactured housing professionals. “Since we specialize in A credits, we have never had an issue with higher cost loans and the rules that surround higher priced loans have zero impact on us.”

However,” Glisson stated, “the rule that prohibits a manufactured home retailer from advising the customer on finance options is one that we would like to see changed. Currently a buyer of a site built home can receive advice from their realtor or builder on financing options, while manufactured home buyers have no similar ability to seek a seller’s help. This would be like going to a car dealer to buy a new SUV and when you ask for help securing a loan they hand you the phone book and say they can’t help you so just pick one out yourself.”

Glisson explained what impact this CFPB regulation has made on their operation. “This has doubled the amount of applications we are now processing to do the same amount of lending. In the past, before the CFPB regulations, a retailer could pre-qualify a buyer by accessing their credit reports and analyzing their income, just like every Realtor ® in America can do. With that information, they could at least determine what lender NOT to send the application to. We have had to add several full time equivalent team members to handle the crush of applications, as we are now bombarded with applicants who have no chance of qualifying with us.”

This is a pattern of “shot-gunning” applications by retailers to all MH lenders, to avoid the appearance of steering, that other lenders have confirmed for MHProNews.

Glisson went on to say that, “Beginning in 2014, when the rules went into effect, our origination cost per loan has skyrocketed. Pre-2014 we would approve about 50% of the applications we received as they were pre-screened. Currently we approve about 30% of the applications we receive, so our efficiency went down the tubes and we are working harder and spending more to make the same amount of loans.”

These are the kinds of real world problems caused by federal regulations that cause a lender such as U.S. Bank to pull out.

inside_mh__am_landy

As Sam Landy, President and CEO of UMH Properties pointed out in a video interview linked here, it has caused them and others in the community business to stop lending to potential manufactured home owners. They now rent homes to those who before would be qualified by their finance arm to make renters into home owners. How does that regulatory caused impact help those thousands seeking ownership and equity instead of rent receipts to advance in life?

Doing the Math

Finance experts tell us that a community operator like UMH, using a related or ‘captive finance’ company, can afford to make loans at a lower interest rate than a traditional lender because they are only loaning on manufactured homes in their community. In the event of a default, their costs and thus their loses are lower. Additionally, a manufactured home community operator can benefit even if their loan program is only marginally profitable, because they are getting additional revenue from a sold home and filled homesite.

There is no similar benefit to the third party loans made by 21st, VMF, Triad Financial, CU Factory Built Lending or Mountainside Financial. The same holds true for regional or local lenders who must profit on the loan itself, or they won’t make the loan in the first place.

Does Buffett win more than Millions of home owners would from the proposed reforms to Dodd-Frank?

While the Seattle Times’ Baker and his tag team writer Wagner make it sound that Warren Buffett and Berkshire-Hathaway related companies are the big winner from financial reform, they clearly overlook the real world impact on an estimated 20% of those home owners who live in a home that is worth under $20,000.

If those homes averaged $15,000 each, 1.76 million MHs represent an aggregated value of $26,400,000,000. That sum dwarfs the benefits to Berkshire-Hathaway, or indeed, to the entire manufactured housing industry.

Since financing is the key to most big ticket sales, a loss of financing causes the same drop in value that was seen in conventional housing in the wake of the 2008 mortgage collapse.  Just as conventional housing lost value absent lending, the same holds true for manufactured homes.

As the now-retired president of the Manufactured Housing Association for Regulatory Reform (MHARR), Danny Ghorbani, has said, the factory built home industry was not the cause of the 2008 housing/mortgage bubble. So why were manufactured home owners, housing businesses and professionals penalized? Why is manufactured housing owners and buisnesses taking such a direct hit from the impact of CFPB regulations?

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 As Eric Powell told Jan Hollingsworth about the impact of Dodd-Frank and the CFPB regulations on their manufactured home purchase, What were they thinking when they did that?”  Or as Sam Landy told MHLivingNews, the consequences to millions of manufactured home owners and thousands of business may well have been untended, but someone has got to fix this. ##

(Image credits 3 and 4, MHLivingNews; Don Glisson Jr photo and composite photo and graphic of Baker and Wagner made by MHProNews).

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