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“An Elephant Ass,” Understanding GSEs, Duty to Serve, Manufactured Home Lending

January 28th, 2017 Comments off

PimpleOnElephantsAssGSE-FHFA-ManufacturedHomeLending-MHProNewsThe manufactured homes chattel lending market poses challenges and risks for the enterprises

– FHFA statement in its request for comments on the Government Sponsored Enterprises (GSEs) Duty to Serve Manufactured Housing.

 

This is a great opportunity for consumers of affordable housing to have additional lending options…”

– Cody Pearce, President, Cascade Financial Services.

 

Mark my words, it will get dismissed by some as small and insignificant….”

– Paul Bradley, President, ROC USA.

 

Mammoth losses incurred by the GSEs and other mortgage lenders in the 2008 housing/mortgage crisis made the losses on manufactured housing in the early 2000s look like “…a pimple on an elephant’s ass.

– Manufactured housing industry veteran’s off-the-record remark to MHProNews.

 

Systematic controls in the 2000s” by remaining manufactured home industry lenders
resulted in much better loan quality and benefited consumers as well.”

 – Marty Lavin, JD, MHI Totaro award winner for lifetime industry contribution in MH lending,
former consultant to Fannie Mae on manufactured home lending.

 

Getting more lending into the manufactured housing space is not a simple snap of a finger and “poof!” it’s done. Getting more lending starts…with the three prongs of needed Education. It relies too on the 4S’ of good lendingSafe, Sound, Sanitary and Sustainable.”

– Titus Dare, SVP, Eagle One Financial and factory-built housing industry veteran.

 

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Brian Collins, credit, National Mortgage News.

The recent column by Brian Collins in National Mortgage News entitled Why FHFA Is Seeking More Data on Chattel Loans resulted in a range of responses from manufactured housing industry professionals.

The quote from Fannie is illuminating,” said M. Mark Weiss, President, and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR).

It’s been nearly a decade since DTS was enacted by Congress,” Weiss told MHProNews, “and FHFA is just now seeking information on the chattel loans that comprise 80% of the market — with no assurance that there will ever be a chattel program — and that’s portrayed by some as progress?”

In a separate and related op-ed on Industry Voices, Weiss said, “If Congress had meant the “duty to serve” to be optional, it would not have called it a “duty.

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Text and image credit, MHProNews.com.  To see Weiss’ commentary, click here or the image above.

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Cody Pearce, CMB, photo credit, LinkedIn.

Cody Pearce, President of Cascade Financial Services said, “We look forward to working with the GSE’s in forming the basis for their lending objectives as they strive to meet DTS requirements.  We are hopeful that the credit box created will truly cater to lower income and lower FICO borrowers.”

I understand the desire from industry insiders to want a chattel program immediately, however, the GSE’s were burnt and burnt badly by the Conseco/Greentree debacle of the late 90’s,” said Barry Noffsinger, in a longer comment that will be posted soon on Industry Voices. “I view this as a journey to explore where their fit is in our industry.”
Concerns and Red Flags?

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Industry professionals assert that some, but not all, in the GSEs, media or in federal policy positions have little or no clue about the evolution from trailer houses, to mobile homes to modern HUD Code Manufactured Homes. Image credit, and story linked here – on MHLivingNews.  There have been no mobile homes built in the U.S. for over 40 years.

A regional manufactured home lender has told the Daily Business News that their program has worked very well.  They said that perhaps their biggest exception is when a repossession occurs in some community where the operator fails to honor their “park agreement,” to help them rapidly sell that home, and for a reasonable price.

Worse still are cases, that firm said off-the-record, when a community essentially punishes a lender by charging lot rent – or getting exorbitant amounts to do refurbishing of a home – before it goes back to market.  That lender refers to those communities they actively do business with as ‘partners.’  That partnership – or strategic ally – perspective would be common among most non-recourse, third-party lenders in manufactured housing.  The prudent and moral professional doesn’t burn a partner.

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Paul Bradley. photo credit: Fosters. For an in-depth interview with Bradley, click here.

Those insights dovetail with comments from ROC USA’s Paul Bradley, who says that even when the Enterprises hopefully become active in lending on manufactured homes in communities, they will likely be selective in which communities they do business in.

Another warning flare from the vantage point of “the Enterprises” is this.

Sorry, but the GSEs and secondary market just don’t get excited about hearing “Blue Book” when it comes to valuing a home,” said Titus Dare, SVP of Eagle One Financial to MHProNews last summer.

Dare presaged the concerns implied by the words used in the National Mortgage News column, when Collins quoted the FHFA saying, “Historically, many manufactured home chattel loans have performed poorly, the collateral has generally depreciated, and many chattel loan origination and servicing practices have lacked important borrower protections.”

But Dare himself pointed out that the GSEs have some chattel loans in their portfolios.

Furthermore, the Enterprises also have successfully done mortgages in leaseholds, that mimic home-only, chattel lending, because ownership of the real estate is not involved. MHProNews has spoken with industry professionals who have asserted that those GSEs loans in their communities performed well; Dare independently made the same point.

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Text and image credit, MHProNews.  For Dare’s article that featued the quote above, click here.

There are numerous examples of competitive rates on manufactured home loans performing in communities; as well as of MH homes gaining as well as losing in value.

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So, when huge losses occurred in the conventional housing loan market just a few years ago, why is that overlooked today, while comparatively smaller losses almost 20 years ago on manufactured home (MH) loans are seen as a road block on MH lending now?

Caution, or Excuses? 

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Marty Lavin, JD.

Marty Lavin has previously told MHProNews that it is self-evident that the national manufactured home lenders active in the business are profitable.

In an upcoming video episode in the Inside MH Road Show series, officers of a credit union speak out about their experiences in making loans on manufactured housing for about 8 years. One of their executives said on-camera that they thought that the GSEs were coming late to the game.

That credit union reports that they have been doing loans profitably and sustainably.  Because they’re regulated, that claim rings true.

Not Everyone’s Cup of Tea…

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It should be noted that while most of the public comments on the FHFA and the GSEs Duty to Serve (DTS) manufactured housing favor the implementation of the law, there are those within the industry who quietly resist or oppose the GSEs ever doing chattel lending on MH.

This is one of the undercurrents that is rarely, if ever, reported by others in media. Yet it is an important factor to consider in why the pace of progress on the issue might be so slow.

The Need?  The Goal? The Impact?

Several public DickErnst-creditMHC-MD-com-postedDailyBusinessNewsMHProNews-comments at trade shows and other events by Financial Services Chairman Dick Ernst are worth noting.

Ernst said during lender panel discussion that there is no practical limit to the capacity of manufactured home lenders to make qualifying loans. When he asked those lenders on those panels about that point, they concurred.

So, if there is “no lack of capacity” to make loans that meet MH lenders current criteria, what then is the goal for the industry in pushing the GSEs for the Housing and Economic Recovery Act (HERA 2008) mandated Duty to Serve?

Borrower FICO scores in the 10th percentile have marched higher from mid 500’s in 2001 to 650 today,” said Cascade’s Pearce, “while GSE credit scores for first time borrowers is 742 and 755 for repeat borrowers.”

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Pearce’s statement was part of a longer one to be published on Industry Voices, in which he stresses his hope that the GSEs will give the lower credit score borrowers access to more affordable lending.

FICO scores are used by lenders in part to assess their risk in making a loan, the likelihood of timely repayment, and overall loan performance.  While some lenders and land-lease communities have done loans on manufactured homes to customers with lower credit scores successfully – as was previously noted – but those loans often require more servicing.

Cascade’s president’s full comments to MHProNews will be published soon on Industry Voices, as will Bradley’s, Noffsinger’s, Weiss’ and others cited in this report.

Appreciation, Depreciation and Exit Strategies

Perhaps the most problematic and troubling statement to forward-looking industry professionals in Collins’ column, Why FHFA Is Seeking More Data on Chattel Loans, has to do with the agency’s assertion that manufactured housing historically loses value.

How fair or accurate is that claim?

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Barry Noffsinger, photo credit, MHProNews. For an in-depth interview, see A Cup of Coffee with…Barry Noffsinger, at this link here.

Contemporary facts and data, says Noffsinger, demonstrate otherwise.

Manufactured housing, just like site built homes, can both appreciate and depreciate.  There are many factors such as location, market conditions, mobility, the condition of the home, etc.  that effects the home’s value,” Noffsinger told MHProNews.

MHARR’s CEO stressed a kind of discriminatory hypocrisy.

When it comes right down to it,” Weiss said of the GSE’s reluctance to loan on manufactured homes, “it’s a double-standard — they downplay the risk of large site-built mortgages despite huge losses previously, while they play-up the risk of MH chattel loans based on comparatively much smaller losses.”

In the light of developments and the range of views, Dare’s commentary last summer bear another, closer look.

Thinking in part about the reasons why profitable U.S. Bank pulled the plug on their sustainable manufactured home lending program, Dare said, There aren’t just barriers of entry, in fact there are barriers for staying in manufactured housing.”

Overlooked and under-discussed is a crux issue, summed up by Dare in this notable quote by the industry’s best known billionaire, “Kevin, it seems to me that the problem with your industry is resale,” Warren Buffett told Kevin Clayton. 

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The more real estate like the exit-strategy is for manufactured home owners and lenders, Dare says, the more attractive and sustainable the MH market becomes for consumers and investors alike.

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Dare argued in a series of columns on MHProNews that there are several factors – including education, public policy, image, media, and the need for certain systemic changes – necessary in order for manufactured housing to achieve its widely-recognized potential.

Will the new Trump administration be helpful in this process?  It is possible, because the president and his surrogates have often said that they want to “enforce the law.”

Will industry players do what is needed to assure the support of public officials and policy advocates?

We missed this chance 10 years ago with the Freddie Mac program in land lease communities,” Paul Bradley, President of ROC USA told MHProNews.  “We’re getting a second bite at the apple.  I hope we don’t spit it out.” ##

 

Editor’s notes – Follow up reports on MHProNews and via Industry Voices commentary will dive more deeply into these and other pressing questions on MH industry lending, DTS and the GSEs.

Let us hereby note this publishing principle – “Often First; Always the Best Industry Coverage.”  ©

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With that new tag line/mantra in mind, please note that MHProNews has been pioneering something new in trade publishing; it’s new even for the news media in general.

Every writer, every editor picks and choses what they include – or leave out – of a story.  It’s a necessity, as stories would become too long and unwieldy otherwise.

That said, MHProNews has often published the full comments on Industry Voices of those we ask for or who offered their input on issues.  Then, as do others in news, we use what fits the article.  But by publishing the full quotes as shared via Industry Voices , that allows our industry readers, researchers, and others the opportunity to digest all that was said by those cited.

If you’ve seen that done elsewhere, please point it out.  We believe this a pioneering step for the best trade publishing practice. It also gives policy advocates, researchers and serious readers an opportunity to dive deeper, for a more robust understanding of each quoted person’s perspective.

In an era of low trust in journalism, MHProNews believes that is an important step in transparency, credibility, and integrity.  That allows us to honestly say this long-standing, fair-and-balanced tag line, “We Provide, You Decide.” ©  ###

(Image credits are as shown above.)

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Submitted by Soheyla Kovach to the Daily Business News on MHProNews.com.

Urban Institute says Preservation, Manufactured Homes are Solutions to Affordable Housing Crisis

September 1st, 2016 Comments off
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NOTE: If you hear sounds coming on, scroll down to the FEMA manufactured housing report, and push PAUSE on the video. Sorry, but that video only offered an autoplay function. MHProNews-produced videos do not do that…Urban Institute affordable housing map. ELI means extremely low income, see related article, linked here.

Affordable housing options are becoming less plentiful around the country, but according to Urban Institute researchers, there are ways to sidestep what has become an outright crisis.

The numbers surrounding the lack of affordable housing across the U.S. are staggering.  In their map shown at the top left, light colored areas represent less affordable housing options.  Only the dark blue areas are more affordable.

Urban Institute research has laid out a handful of ways to avert, or at the very least, minimize the damage being done by the loss of over 2 million affordable housing units in just over a decade.

In this report, the solutions examined all revolve around the idea of preserving the housing that already exists, rather than try to develop more.  The report wasn’t anti-development; rather, it focused on examining an alternative option.

Preservation of housing stock tends to be a more affordable option than new conventional construction, even if it might not be as “sexy, as Urban Institute research associate Mark Trekson puts it.

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Mark Treskon, Urban Institute.

More importantly, preservation means current residents are less likely to be displaced than they would be in a new construction scenario.

Quoting from the attached report, “Another lesson from these case studies is developer capacity: the bigger a project, the more sophisticated the methods needed—and partners involved—to make it successful.”

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Photo collage credit, Vida Lea Coop.

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Preserving Manufactured Home Communities

One of the Urban Institute’s roads to more affordable housing featured in their in-depth report linked here features manufactured homes and land-lease communities, like the one in the photo and chart above.

As industry professionals know, manufactured homes are less expensive because of the money saved from less time and labor being used, plus less material being wasted. Not only do people spend less money by living in a manufactured home, but the Urban Institute study suggests they could find themselves with an opportunity to earn money off the land in the communities they occupy.

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Vida Lea is the example of preservation used in the Urban Institute study, linked above. Photo credit, Vida Lea Co-op.

Millions of manufactured homeowners don’t own the land they live on. The majority of the time, that works out fine for residents and for the property owners.  But there are times when a community, its owner(s) – and thus its residents – comes to a crossroads.

The Urban Institute explains that places like Vida Lea Mobile Estates in Leaburg, OR witnessed its residents purchase the 33-space community from its owner. The coop/resident buyers turned their leased home sites into a Resident Owned Community (ROC). This model allows its members to not only own their already affordable manufactured home, but to also gain control of the property it was sited upon.

As once-vacant manufactured home-sites are filled, the site fees (aka “lot rent”) generate revenue by leasing out spaces, which further cover operating expenses.

That model turned out to be a successful one of preservation of affordable housing for the Vida Lea Mobile Estates residents. They were able to keep their homes and improve upon them, with repairs to the sewage system and driveways as well as add some amenities like laundry machines and some common areas. Upgrades like those may seem relatively minor in the long run, but the $275,000 spent on those improvements can go a long way towards helping residents not only stay where they are, but also produce additional income for the community, which keeps the costs lower for all involved.

The Flip Side – A Case of No Preservation

This case is one not in the UI report. It’s one of several community-related stories that are not working out as well as Vida Lea. In addressing an issue in his home state of a improperly run MHC that was allowed to run down and then be sold off, the prior chairman of the Texas Manufactured Housing Association made the following observation.

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Karl Radde, Southern Comfort Homes, Chairman, National Retailers Council, MHI.

At the end of the day, it takes everyone working together to better the situation and that must include responsible, fair and balanced regulations by cities and towns and not the trend to have outright bans on all manufactured housing,” says Southern Comfort Homes President and General Manager, Karl Radde. “Not all communities can be “Five Star” resort-type destinations, but there’s a strong need for basic, secure, well-kept communities to serve affordable housing.”

Radde’s point, while not a direct comment on the report below, relates to a story out of Florida reported by the Daily Mail, about yet another unappealing MH community, and its closure.

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In this June 14, 2016 photo, residents of the Little Farm trailer park pose for a group photo in El Portal, Fla. The 15-acre neighborhood was home to a close-knit community until the site was purchased by Wealthy Delight, LLC, and residents were evicted. The area is in preliminary planning for mixed use development. — Daily Mail. (AP Photo/Lynne Sladky)

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Marty Lavin, JD.

The Little Farm “trailer park,” the DailyMail says, has been home to dozens of Haitians, Hispanics and others for years to decades. In a commentary on this specific closure, attorney and industry finance expert Marty Lavin had this to say: “…real people, in closing manufactured home communities, are financially and emotionally injured, especially the financially fragile folks who live in our land lease communities (LLCs).”

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In this June 13, 2016 photo, graffiti is written on the side of a mobile home at the Little Farm trailer park in El Portal, Fla. In a city known for its glitzy, luxurious condo towers, affordable rental housing is hard to come by. Residents, many of whom had owned their mobile homes in this close-knit community for years, were evicted in July after the park was purchased in 2015 by Wealthy Delight, LLC. The site is now in preliminary planning for mixed use development. – DailyMail. (AP Photo/Lynne Sladky)

Lavin elaborated. “Whether we like it or not, LLCs have a special obligation. We [community owners] hold ourselves out as a site to buy a HUD Code manufactured home, and invite home buyers to essentially stay forever.” 

Nelly Shirley, Little Farm Trailer Park, El Portal FL

In this July 12, 2016 photo, Nelly Shirley, 74, poses outside of her mobile home at the Little Farm trailer park in El Portal, Fla. She received a beautification award for creating the lush, tropical garden around her mobile home where she lived for 22 years, but was evicted in July after the park was purchased in 2015 by Wealthy Delight, LLC. She received an $8,000 settlement for her relocation, and is now living in a one-bedroom apartment. The park will be razed. – DailyMail.  (AP Photo/Lynne Sladky)

“Then one day, the property reaches renewal, and we chose to sell and send the people out on the street. Because of the fragile people who live with us, sympathy easily arises.”

That sympathy often hits the local or regional news, and contributes to the image issue that the manufactured housing industry faces.

Lavin said that he personally sold two communities he owned to the residents, using the ROC process. Along with Vida Lea Mobile Estates in Leaburg, OR and hundreds of other communities, Lavin’s selling to the residents is an example of preservation, which the Urban Institute study notes is so important for affordable housing preservation across the country. ##

(Image credits are as shown above.)

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Joe Dyton, for the Daily Business News, MHProNews.

Article submitted by Joe Dyton, to the Daily Business News, MHProNews.

Resident Councilman leads charge for new law that Manufactured Home Community Owners, Industry Professionals say Harms All

August 29th, 2016 2 comments
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Dover councilman Fred Neil stands in his front yard in north Dover. (Delaware State News/Marc Clery)

It started last fall when we issued a permit to allow a manufactured home on a regular single-family lot,” said Ann Marie Townshend, director of Dover’s Planning and Community Development. “It got some people upset so we fixed the definition of single-family dwellings so that couldn’t happen again,” reported Mike Finney for the DelawareStateNews.

The “…story out of Dover, DE is yet another example of a blatant agenda and discrimination against our industry,” manufactured home veteran Brad Nelms told MHProNews. “More importantly, this is discrimination against affordable housing and the individuals who live in manufactured or pre-fabricated homes.”

Finney states the city of Dover reportedly recognized that their mobile and manufactured home ordinance was outdated in terminology and in other ways, so an updated 20-page revision of standards and verbiage known as Ordinance #2026-16 was enacted for Dover.

Townshend said the process began in Nov. 2015 and was passed unanimously by the members of city

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Ann Marie Townshend.

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Marty Lavin, JD.

council at their Aug. 8, 2016 meeting. Attorney and award-winning manufactured housing professional Marty Lavin pointed to Dover’s ordinance as an example of how “the HUD Code has become a deadly “discrimination code,” especially as it applies to manufactured home financing. But it doesn’t end there.”

As most MH industry professionals know, “the HUD Code” are the strict, federally preemptive standards that govern manufactured housing’s construction and safety standards; the trailer house era and mobile home days are decades in the rear-view mirror.

Dover Councilman Fred Neil, a resident of Wild Meadows, active adult manufactured home community near the Dover International Speedway, described the ordinance this way, “It’s a licensing law, and while it’s only $25 per home on a lot, the fact is if [the community owners] don’t do what they have to do, you can lift their license and put them out of business.”

Finney said Neil believes the now-required annual licensing of manufactured and mobile homes will improve things for residents.

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This street view of Wild Meadows reflects what many modern manufactured homes look like, with not a single mobile home visible in this picture; image credit, Google Maps.

New Regulation – helpful or harmful in the long run?

A Daily Business News brief in April, 2015 reported that the location’s operator, December Corporation, was denied a site fee increase under the rent justification law, which the company said was necessary to do more than ordinary improvements and maintenance at Wild Meadows.

The experience of rent control in California may provide clues to what’s coming in Dover.

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Doug Johnson, credit, Western Manufactured Home Communities.

Doug Johnson, of the Western Manufactured Housing Communities Association – which represents manufactured home communities and mobile home park owners in various issues and legal disputes – opposes rent control. “It’s very complicated and it pits the owners against the residents,” Johnson said. “We don’t believe rent control works — it raises mobile home prices and is expensive for the taxpayer.”

Government imposed regulations and fees are leading contributors to why California is the most expensive place to live in

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Sheila Dey, Executive Director, Western Manufactured Home Communities, photo credit, PublicCEO.

the U.S., placing homeownership out of reach for many middle-class Californians,” said Sheila Dey, Executive Director of the Western Manufactured Housing Communities Association (WMHCA), speaking about a similar scenario, linked here.

 

MHProNews previously reported a case out of Canada, where CBC TV provided a look at an actual example of rent control’s long term impact on manufactured home residents and owners alike.  That video is below.

Meanwhile, for some residents, it’s the fear of the impact of rapid-rent hikes that spark the concerns and calls for rent control.

Insider Report from Delaware

This Fred Neil has been a thorn in our side for 14 years now,” an informed source in Delaware told MHProNews. “He is now a City of Dover councilman and he has also been active on the state-wide tenant association for years.”

The source stated in confidence that there are a handful of communities in the City of Dover, which are in the early stages of planning a legal challenge to the city’s new

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Brad Nelms, MH Industry veteran, photo credit, MHProNews.

ordinance. The tension, it seems, won’t be resolved for either side of the struggle over the new ordinance.

I believe more than anything that these injustices should be motivation for us as an industry to do everything we can to elevate our brand identity,” Nelms, as part of a longer statement on this and a related issue linked here, stated. “If we continue to be complacent, history will continue to repeat itself and we will see more and more zoning laws that harm and hinder our much needed American manufactured home industry.” ##

(Image credits are as shown.)

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L. A. ‘Tony’ Kovach is the publisher of MHProNews.com and MHLivingNews.com.

(Editor’s Note: Matthew Silver is taking some much needed and well-earned time off, and L. A. “Tony” Kovach will be helping fill the Daily Business News role in the interim).

Article submitted by L. A. “Tony” Kovach, to the Daily Business News for MHProNews.

MHI’s Dick Jennison, CFPB’s Richard Cordray on Manufactured Home Loan Regulations

March 17th, 2016 Comments off

dodd_frank___bloombergbusinessweek___creditWhile governmental officials, industry leaders and financial executives agree that manufactured housing (MH) is a solution to the problem of affordable housing in the nation—Julian Castro, head of the U. S. Department of Housing and Urban Affairs (HUD) calls MH a “vital solution for folks of modest means”–regulations imposed by the CFPB have resulted in access to credit being denied those who would have qualified, prior to the establishment of CFPB.

Marty Lavin, an expert on MH lending, adds that reduces sales and resale values. “We’re taking away the free choice of people without good cause,” he said.

The snowball effect resulting from the implementation of Dodd-Frank leaves many would be buyers and sellers of less expensive MH unable to acquire financing, which in turn prevents those who want a more expensive MH unable to sell their older, but useable MH–except for cash–which reduces overall sales.

Says Dick Jennison, president and CEO of the Manufactured Housing Institute, “We need to remove the shackles that the Dodd-Frank Act and the CFPB rules have placed upon our industry.Barney Frank said the legislation that bears his name was never intended to have the deleterious effect on MH that it does.

Furthermore, as pressreleaserocket points out, the loss of new MH sales reduces industry employment in production, retail, moving, insurance, etc.

Noting that people who are shut out of buying a manufactured home because of lending restrictions often have to opt for rental living, Sen. Bob Corker (R-Tenn.), tells MHProNews, “They are ending up paying more for rental housing than they would end up paying by actually purchasing a lower-cost home.”

To which the CFPB’s Dir. Cordray might say, as he once did, “That doesn’t sound optimal from anybody’s standpoint… We should be thinking about whether the (lending) thresholds are exactly right.”

Lending restrictions on manufactured housing not only hurt the economy—they can endanger the health and safety of those of the most modest means by preventing them from purchasing a safe home to raise a family.

For a video of views from across the MH spectrum, click here. ##

(Image credit: bloombergbusinessweek)

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

 

Seattle Times announces State Investigation of Warren Buffett’s Clayton Homes, as expected – Analysis

February 5th, 2016 Comments off

TheyreBackSeattleTimesLogo-creditSeattleTimesTheirBack-creditDailyBusinessNewsMHProNews-com-As part of the Seattle Times‘ ongoing year-long rant on Warren Buffett’s/Berkshire Hathaway-owned Clayton Homes and their affiliated lenders, Mike Baker and Daniel Wagner have succeeded in drawing Washington Governor Jay Inslee’s attention and his state’s Department of Commerce. This is resulting in a bill to investigate the sales, financing and repossession of manufactured homes.

This latest reprise of their ongoing saga was anticipated by MHProNews, as shown by this link from Jan. 30, 2016.

In a series of previous articles, Baker and Wagner have accused Clayton Homes of discriminatory lending, predatory lending on the poor, and trapping the unsuspected in high-interest loans with an eye on repossessing the manufactured home (MH) once the borrower falls behind on payments.

Steve Lefler, vice president of Modular Lifestyles, Inc. – part of the Newport Pacific family of companies – observed, “Recent defective construction and DOJ investigation on loans I have to say, Clayton may revisit their staff and operations activities. Reputation and public perception are hard to re-claim after these types of accusations.”

Lefler is far from alone among industry professionals in his concerns about the the implications and types of consequences from these articles by Baker and Wagner. Long time industry veteran Marty Lavin voiced his observations and concerns in an OpEd, linked here. Numerous off-the-record comments about this topic have come into MHProNews.

Baker and Wagner

What has been described as their brand of “advocacy journalism” has resulted in calls by some Democratic leadership in Congress to investigate the MH industry, and Clayton Homes in particular, since they are the target of the Seattle Times/BuzzFeed News reports and the dominant producer and lender in the MH industry. Clayton Homes and their affiliated lenders are part of Warren Buffett’s Berkshire-Hathaway, which in a heated election cycle, makes for a stronger draw in readership.

Washington state Commerce Director Brian Bonlender says the stories could offer some solutions to the state legislature during its long legislative session in 2017.

Meanwhile, the Preserving Access to Manufactured Housing Act, passed by the House and awaiting consideration in the Senate, is referred to by Baker and Wagner as “an industry-backed plan to roll back consumer protections.” The duo painted Buffett’s Berkshire-Hathaway “mobile home” (sic) units as being the main winners if the HR 650/S 682 becomes law.

In a story picked up by Nanotech News, The Boston Globe, The Miami Hearld  and dozens of other media outlets, MHLivingNews publisher L. A. “Tony” Kovach takes a critical look at how Baker and Wagner, utilizing a wide swath brush, paints Clayton and Buffett as vampires, sucking the life blood from consumers.

Take one famously folksy billionaire, add a pinch of cherry-picked stats, stir well with a cast of wronged Native American, black and Hispanic homebuyers and you have the latest tag-team assault on the Warren Buffett manufactured home empire.

What could be more clickable holiday fare than the new installment in a yearlong campaign by two reporters who have pretty much made a career of throwing dirt at one of the richest men on Earth?

How about a tale of bilking poor minorities out of billions of dollars amid an atmosphere so steeped in racism it makes kindly Uncle Warren look like an overseer at Tara in Gone with the Wind?

Who cares if it’s not true?” The entire Nanotech News item is linked here.

Kovach did an analysis on that issue for MHLivingNews.com, which the Seattle Times and BuzzFeed have yet to address. See that report, linked here.

The Seattle Times video relates the story of one couple who allegedly were taken advantage of by Clayton and their lender. That video is below.

As a thumbnail analysis of their video, as heart-wrenching as this kind of topic may be, carefully reviewing it actually undermines some points Baker and Wagner are trying to make. Many individuals, couples or households have life events that can lead to a default on a house, manufactured or site-built: divorce, job loss, ill health and death. The interest rate wasn’t the key factor, based upon the information in their own video.

Another point their dark, somber and one-sided video avoids entirely is that no manufactured home lender wants to pick up a multi-sectional home, save as a last resort.  The losses on a repossession like the one described can be so great, lenders would much rather work it out with the borrower if that is possible. Without question, there are lots unsaid in this Seattle Times video report.

Additionally, the couple’s home was in a remote location, as they stated, which could mean there may not have had comps around to support a land/home kind of loan at that time.

The Seattle Times video and related articles are, Kovach and others assert, created to provide an entirely unbalanced view of manufactured home living and lending, as quality affordable lifestyles.  The evidence for this in their own video, because there is no opposing or balancing viewpoint shared.

Yet the Government Accounting Office’s 2014 report on manufactured housing graphic below dramatically demonstrates that even with a higher financing rate than conventional lending – which is caused in part by no access to secondary markets, and no federal backing of the loans – the monthly payments for a manufactured home are lower than other forms of housing, because of the dramatically lower cost of the homes.

monthly-housing-cost-2011-manufactured-homes-vs-other-housing.

Graphic credit, GAO report on manufactured housing.  The entire GAO report, along with examples of why the reforms sought by the MH industry of CFPB regulations are indeed a consumer benefit, can be found at the link here.

The Other Side of MH Living Baker and Wagner Avoid

A very different image of manufactured home living emerges from videos that Inside MH has produced, which spotlight home owners, professionals, and experts discussing the appeal and value of manufactured home living. Two of many examples are below.  The first is from a couple living in a land-lease, the second is with a realtor who has sold hundreds of manufactured homes and who’s husband is a custom builder. 

Advocacy Journalism?

Behind-the-scenes of the Seattle Times/BuzzFeed, PBS NewsHour or related stories are efforts by non-profit groups to derail Preserving Access. An in-depth video interview with Marty Lavin, JD – an award winning MH lending expert – about facts relating to the legislation is linked here.

Informed sources tell the Daily Business News/MHProNews  that another installment of the Baker/Wagner duo is expected soon. ##

(Image credit: Seattle Times logo, which is their property, used here under fair use guidelines. Halloween “Their Back…” lettering, by MHProNews.)

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.

Sunday Morning Recap-Manufactured Housing Industry News Sept. 20-Sept. 27, 2015

September 27th, 2015 Comments off

mhpronews_sunday_morningWhat’s New in public focused Manufactured HomeLivingNews.com

The Kennedy – Model Home Video Tour – New Durham Estates, Westville, IN

Jack and Betsy Norman, Whispering Pines 55+ Manufactured Home Community, Somerset, PA

What’s New in Manufactured Housing Industry Professional News

Justice Dept. settles two MHC discrimination suits. Judge clears path for MH subdivision in MT. Debt reduced at RV/MH Hall. 3D home built in Italy; 3D home and car displayed in TN. More MH sought in BC, Canada. Carlyle adds to MH portfolio. MH finance vet Marty Lavin weighs in on MH lending, CFPB regulations. London garners mod ideas to address housing shortage. MH biz in news: UFPI, Sun, Cavco. MH to house survivors in CA, WY. Household formation increasing to 15M+. Much more MH news and views to grace your Sunday morning latte.

Saturday, Sept. 26

Judge Orders Approval of Contested Factory-built Subdivision, Awards $650,000

Friday, Sept. 25

$54,000 Raised Towards Eliminating RV/MH Hall Debt

Modular Housing in Italy, U. S., Look Nefarious from Air

MHCV Slips, Cavco Gains, Dow Moves Up

Production Errors on Manufactured Homes Being Investigated

MBA Report: Household Formation may Rise to Nearly 16 million by 2024

New Home Sales Rise in August, but Fed Head Concerned

Thursday, Sept. 24

Mortgage Applications Rise

UFPI has Bright Future, but Short Term Risks

MHCV Edges Up, Dow Slips, Home Sales Rise

3D Printed Home and Car can Share Energy

Manufactured Homes may House Fire Victims

Dublin’s Archdiocese Supports Modular Housing

Wednesday, Sept. 23

FEMA Provides Manufactured Homes to Flood-damaged Wyoming Town

Stocks Relatively Quiet, but MHCV Outperforms Dow, Nasdaq and S&P, Gains +0.29%

More Manufactured Home Community Development Sought in BC

Justice Strikes Again – another Manufactured Home Operation Settles Case

Sales of Pre-owned Homes Fell in August

Tuesday, Sept. 22

Carlyle Expands Manufactured Home Community Portfolio

Only one Covered MH-related Stock Rises; VW Shocks the World

Large Italian 3D Printer Prints Houses

Factory-built Structures will Provide Offices and Storage for Pipeline Build

Marty Lavin, JD – Dodd-Frank, CFPB Manufactured Home Regulations Impact on Owners, Businesses

London Receives 200 Innovative Proposals to Address Housing Shortage

Monday, Sept. 21

Another NC County Funded to Demolish Abandoned Manufactured Homes

Patrick Drops Sharply; UMH Gains Smartly

Justice Department Obtains Settlement against MHC

Cavco Industries, Sun Communities Shine on Wall St.

Former Lawmaker who Swindled Modular Home Buyers to Remain in Prison

Sunday Morning Recap-Manufactured Housing Industry News Sept. 13-Sept. 20, 2015 ##

(Photo credit: MHProNews)

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

Marty Lavin, JD – Dodd-Frank, CFPB Manufactured Home Regulations Impact on Owners, Businesses

September 22nd, 2015 Comments off

MartyLavinCFPBManufacturedHomeLendingRegulationsVideoInsideMH-ManufacturedHousingProNews-com-5 years after its passage, Dodd-Frank remains one of the hotly contested legacies of the Obama Administration. Supporters of the law believe that it provides important consumer protections. Others point to facts suggesting CFPB over-reach with respect to manufactured housing chattel – or personal property, “home-only loans” – are creating a Renters Nation.”

Into the hotly contested debate over The Preserving Access to Manufactured Housing Act – HR 650 and S 682 – is a newly released Inside MH video interview with attorney Marty Lavin.

Lavin’s background includes taking consumer advocacy positions, while maintaining his status as an expert on manufactured home finance.

In this in depth interview, Lavin is asked about such hot-button topics as:

  • Is Manufactured Home Lending Predatory?
  • Is Fraud and Abuse of Customers Prevalent in MH Retail Today?
  • What is the impact of CFPB regulations on the values of an estimated 4 million manufactured home owners living in 1.7 million MHs in the U.S.?
  • What is the impact of the CFPB’s MLO rule on manufactured home shoppers and sellers?

The PBS Newshour is said to be ‘holding’ video interviews of its own, that informed sources suggest to MHProNews will be slanted against the MH industry’s positions.

Sources have advised the Daily Business News that the PBS interviews by Stephen Fee could be released 10 days before any Senate floor debate. While MH lending consultant Dick Ernst was asked to represent the views of the Manufactured Housing Institute (MHI), sources suggest that the Gwen Ifill interview about OZY Media’s take on manufactured housing could be an important clue as to how those reports will be slanted.

Manufactured home personal property financing – which Fee and others in the media mislabel as ‘mobile home loans’ – will likely come to the forefront, as a Senate vote on a bill that includes the language of S 682 is expected to come up for a vote this fall. Fee has not yet responded to our contact for comments.

PBS’ MH lending focused videos, along with other media reports expected in the run-up to the fall Sentate debate and vote, could make this exclusive Inside MH video interview with Marty Lavin an important part of the discussion, as it takes an in-depth look at the MH loan issue.

A detailed list of other resources on the manufactured home lending topic are found at this link here. ##

(Image credits: Roberts Resorts and Communities, MHProNews, Inside MH.)

Manufactured Housing may Become the New American Dream

April 28th, 2015 Comments off

mfg home delivery  sfgate  creditWhile many studies have shown that homeownership continues to be a large part of the American Dream, the Joint Center for Housing Studies at Harvard University reports in 2013 home purchases fell for the ninth consecutive year, and homeownership has dropped to 65 percent, the lowest rate in 20 years. Incomes are stagnating, housing values are rising, credit is tight in the wake of the housing crisis and rents are rising in response to demand for rental units.

Although the chronicle-indpendent notes that manufactured housing (MH) has less than a squeaky-clean, all-American, apple-pie image, its price points are appealing, and people like L. A. “Tony” Kovach, publisher of MHProNews and MHLivingNews, who recoils at the words “trailer” and “mobile home,” are determined to bring manufactured homes into the mainstream as the quality and affordable housing alternative.

Since the federal government began regulating design and construction of MH in 1976 with periodic upgrades, quality and safety have increased substantially, and homes often are more energy efficient than site-built homes, with strong wind resistance and increased insulation. Newer ones offer sunken tubs, granite countertops, high-ceiling domed entryways and other appealing features found in more upscale traditional homes. The Census Bureau says the average price for a single-family home in 2013 was $324,000, while an MH average price is $64,000. Even attached garages and covered porches are available with MH, and still considerably less than a stick-built home.

Paul Bradley, president of Resident Owned Communities (ROC), an organization based in New Hampshire that assists residents of manufactured home communities in buying their communities to form co-operatives, sees MH as the future of affordable housing. “The subsidy pie is fixed, and the need is growing,” says Bradley of the current affordable housing stock — which is made up mostly of subsidized apartments. “People will start to look at low-cost production options, it has to happen eventually. ROC USA has helped finance 51 MHCs outside the state to the tune of $90 million, and more inside NH.

Today’s factory-built homes do not necessarily look like single-and-multi-section units that people associate them with. Bill Matchneer, one-time manager of the manufactured housing division at HUD, and former senior counsel with the Consumer Financial Protection Bureau (CFPB), says, “I see the modern manufactured home as equivalent to a typical site-built home, at about half the cost. We’re not talking about a mansion, but people would be surprised.

Marty Lavin, who owns manufactured home communities in New York, says many MH consumers will sacrifice interior quality to obtain more square footage, like substituting solid wood cabinets and doors for particle board in order to increase overall space. “If your financial circumstances are such that you can’t afford a $500,000 home on a quarter acre, a $100,000 home can satisfy your dream. That’s a great thing for many people,” says Lavin.

Many worry about depreciation of manufactured homes, but Datacomp Appraisal Systems completed a study recently of 185 MH in Michigan, comparing the average sale price and resale price, and discovered they are subject to the same factors as other homes. “The appreciation in value of manufactured homes comes back to the old real estate axiom — location, location, location,” read the study. “When properly sited and maintained, manufactured homes will appreciate at the same rate as other homes in surrounding neighborhoods.

Lavin says with rising home prices and stagnating wages, manufactured homes may be the ticket to the American Dream. ##

(Image credit: sfgate-manufactured home delivery)

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

Negative views about Manufactured Housing in the media – do we just expect and accept it?

December 4th, 2014 Comments off

manufacturedhome-credit=manufacturedhomelivingnews-com-posted-mhpronews-In a recent Question and Answer column in Maine’s Tri-Town Weekly,  a commentary by news writer John McDonald was published under the headline, DOWN THE ROAD A PIECE: On the move.  McDonald’s column was in reply to an email received from “Frank,” who wrote: “We moved here from a southern state where lots of people live in mobile homes or trailers. When grouped together, as they often are, the resulting community is called a ‘trailer park.’ You’ve probably read stories about southern trailers – the things that get banged around a bit every time there’s a hurricane or a tornado.”

McDonald’s article says as part of his reply to Frank, The idea of living in a real mobile home or trailer has never enjoyed wide acceptance among the majority, who prefer to live in what might be called immobile homes.

McDonald elaborated,Makers of “trailers” never liked the name, so they began insisting that their creations be called “mobile homes.” No matter what they were called, everyone knew they were still trailers. Then in 1980 Congress officially changed the name to “manufactured home.”  But, like I said, they’ll always be trailers to the rest of us.”

What the question and reply in Tri-Town Weekly demonstrates are some common attitudes found in the media and the public at large, well known to many in MH.

First, John McDonald is clearly a good writer and knows how to turn a phrase and be funny. But he’s not accurate in much of what he asserts as true. For example, MH industry veterans know that there have been no ‘mobile homes’ built in the U.S. since June 15, 1976. The 1980 date McDonald gives in his article is flat wrong.

‘Trailers’ are pulled behind cars or pickup trucks. In residential terms today a travel trailer is a common kind of RV. They are smaller and far lighter than an MH. By contrast, it takes special equipment to move even most pre-HUD Code mobile homes. Since houses built on site use trailers to haul their parts to location, does that make on site building a ‘trailer house’ too? Both MH and site built are ‘immoble’ once installed.

Modern manufactured homes can weigh 25,000 or more pounds per section. They use the same lumber, shingles, vinyl siding, appliances, etc. that conventional housing does. Because they travel down the road to their location, as Modular Lifesyles Vice President Steve Lefler has said, they are tougher. It is like going through an EF 1 tornado and an earthquake at the same time.

Properly installed, as the video linked below proves, modern MHs are stronger than conventional housing, not weaker.

Marty Lavin, community owner and industry expert, has told the industry not to be confused. The MH industry already has an image campaign underway; and it is the media’s campaign. This article is a reminder that media accounts are often not favorable.

Clearly McDonald and Frank are misinformed on almost every level. As they try to educate each other, neither one of them has the updated information about the Manufactured Housing Industry. Neither knows that some 22 million Americans live in communities and homes throughout the nation.

But McDonald and Frank are not alone.

Until the industry learns to pull together in a campaign like what Murex Properties’ Steve Adler advocates in a new interview – or what Chairman Randy Rowe of Green Courte Partners has called for in his 5 point plan – expect that every professional or organization should stand up and correct the media when they err.

The photo from Manufactured Home Living News at top comes from the #1 resource of its kind that has videos, news stories and photo galleries that dispel myths. These stories and videos are on subjects ranging from MH in hurricanes and tornadoes – or that manufactured homes are ‘only for the poor‘ – when in fact millionaires own them too.

Stereotypes and outdated perceptions keep manufactured homes from being accepted as mainstream housing. When will more people grasp what Mary McBrady of the Massachusetts Manufactured Housing Association has advocated, that industry professionals pull together to support the platforms that advance the true narrative of the industry? ##

Photo Credit: (MHLivingNews)

joseine-josie-thompson-writer-daily-business-news-mhpronews-com50x50-Article Submitted by Josie Thompson to- Daily Business News- MHProNews