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Remarks by HUD Secretary Ben Carson to the Mortgage Bankers Association

April 4th, 2019 Comments off

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Flashing back to 2016, among the former GOP contenders to announce their support for Donald J. Trump to become the 45th president was Ben Carson, M.D.

 

Flash-forward to the present.  Now HUD Secretary Carson has been an earnest and dependable supporter of President Trump and his agenda. While he has floated the notion that he may step aside at HUD after the 2020 race, there has never been any serious flap at HUD about the security of his tenure there.

Carson has stated his support for manufactured housing numerous times.  Part of that, on a practical level, must include financing options.  That is one of several topics addressed in his comments, below.

It is useful to see what Carson says to audiences other than manufactured home professionals.  Links to other reports that deal with Carson’s comments to senators or others are further below.  But let’s see what his prepared comments were yesterday to the powerful Mortgage Bankers Association (MBA), in Washington yesterday.

 

Remarks by Secretary Ben Carson
Mortgage Bankers Association National Advocacy Conference
Washington, D.C., Capital Hilton, April 2, 2019

 

As prepared for delivery. The speaker may add or subtract comments during his presentation. Provided by HUD to MHProNews.

Thank you, Bob, for those kind words. And thank you to the talented MBA staff for organizing this important conference, as well as to the many leaders, professionals, and pioneers in our industry here today.

To the more than 325 million men and women who call our country home, housing is not just a pillar of our nation’s economy – it is the foundation on which families, and their futures, are often built.

There are signs that this future looks as bright – or perhaps brighter – than ever before. Under President Trump’s leadership, America has witnessed historic highs in employment, job creation, and economic growth.

A recent Gallup poll reported that 69 percent of Americans expect to be better off this time next year than they are today. This financial optimism is not only a 16-year high, it’s within two percentage points of an all-time record.

But every doctor knows that a patient can look like a paragon of health, while latent and localized conditions go untreated underneath. If any part of the body is allowed to languish, every part of the body will eventually feel its pain. Our vital organs are all in it together.

So too it is with America. We are only the Land of Opportunity when opportunity is available to all. And HUD is tasked with a special mission to carry our nation’s new gains to the local doorsteps of vulnerable communities who need help most.

At HUD, our aim is to ensure every American has access to decent, safe, and affordable housing. Both HUD and the MBA share a common understanding: that improving access to capital is a critical driver of economic opportunity.

Today, I’d like to share some of HUD’s initiatives to increase access to financing across the housing industry, the many successes we’ve already begun to see, and how we are embracing responsible reform in the months ahead.

 

Opportunity Zones

One program expected to greatly increase access to capital while expanding affordable housing is the Opportunity Zones initiative.  

Created by the 2017 Tax Cuts and Jobs Act, Opportunity Zones are designed to stimulate economic development and job creation by incentivizing long-term capital investments in low-income neighborhoods. These Zones are structured to serve local communities for the long-term. Only investors who commit capital for five, seven, and ten years receive rewards. That means new growth becomes consistent growth and new jobs become steady jobs. 

When new businesses are “here today, gone tomorrow,” residents face an uncertain future. But when they know new businesses are “here today, here to stay,” residents can plan for the long-term future of their neighborhoods, including by applying for mortgage loans and becoming homeowners.

And Opportunity Zones are not a small, incremental initiative – they represent massive action to encourage financial capital to be invested in distressed communities.  

For perspective, the National Council of State Housing Agencies announced last month that its Opportunity Zone Fund Directory had expanded to nearly $24 billion dollars in anticipated investments. Of those $24 billion dollars, 91 percent of the funds are planning to invest in multifamily residential, student housing, mixed-use, hospitality, or other commercial development.

We have already heard positive reports from city officials that anticipated investments in Opportunity Zones have helped preserve and attract economic development into their localities. And these are still just the early days. The Department of Treasury estimates Opportunity Zones will attract more than $100 billion dollars in private investment. 

To ensure Opportunity Zones reach their potential, President Trump established the White House Opportunity and Revitalization Council, which I have the privilege to chair. The Revitalization Council consists of members across 13 agencies and will prioritize Opportunity Zones in a variety of federal efforts, including deregulation, grant funding, loan guarantees, infrastructure spending, and crime prevention.

By utilizing a single body to achieve interagency consensus – rather than having 13 separate departmental processes – the Revitalization Council can achieve faster resolution, and that means we can deliver much faster solutions.

 

LITHC Expansion

HUD is also adding positive incentives for the construction and sale of affordable homes by expanding HUD’s Low-Income Housing Tax Credit Pilot for multifamily home development.

This expanded initiative will streamline the processing of FHA insurance applications for projects with equity from the LIHTC program. It’s part of our commitment to further align our policies and underwriting towards supporting affordable housing production and preservation.

Because New Construction and Substantial Rehabilitation currently make up more than 40 percent of our total volume, we expect the expansion of our LIHTC Pilot to significantly increase HUD’s affordable housing volume.

More homes also create more home mortgages, which can contribute to the health of the market.

 

HUD Accomplishments in Preserving and Developing Affordable Housing

HUD is also working to increase the supply of affordable multifamily housing through a multitude of initiatives that support the critical infrastructure on which the mortgage market is based.

To spur local community reinvestment, we have partnered with local authorities and private businesses to preserve more than 100,000 public housing units. This public-private partnership, the Rental Assistance Demonstration, or RAD, program has generated close to $6 billion dollars in construction investment and created more than 100,000 jobs.

To advance economic opportunity, the Federal Housing Administration has served more than 650,000 homebuyers in 2018 alone, most of whom were low-to-moderate income earners. FHA has also supported the production and preservation of more than 120,000 multifamily housing units and provided $2.45 billion dollars in insurance for hospitals and residential care facilities.

And, to help communities recover from natural disasters, HUD has awarded nearly $28 billion dollars since last April through the Community Development Block Grant-Disaster Recovery Program to repair seriously damaged housing, businesses, and infrastructure. These grants represent the largest single amount of disaster recovery assistance in HUD’s history.  

 

Responsible Reform

In housing financing reform, HUD is supporting the Trump Administration’s efforts to reduce taxpayer risks, expand the private sector’s role, modernize government housing programs, and make sustainable home ownership for American families our benchmark of success.

 

The White House has set forth the following goals for housing finance reform:

• Ending the conservatorships of the GSEs upon the completion of certain specified reforms;

• Facilitating competition in the housing finance market;

• Establishing regulation of the GSEs that safeguards their safety and soundness, while minimizing the risks they pose to the nation’s financial stability; and

• Ensuring the Federal Government is properly compensated for any support it provides to the GSEs or the secondary housing finance market.

 

The White House has called for HUD’s Reform Plan to include several objectives, including:

• Addressing the financial viability of the Home Equity Conversion Mortgage program; 

• Assessing the risks and benefits associated with providing assistance to first-time homebuyers;

• Defining the appropriate role of the FHA in multifamily mortgage finance;

• Diversifying FHA lenders through increased participation by registered depository institutions;

• Enhancing GNMA program participation requirements and standards to ensure its safety and soundness; and

• Reducing abusive and unsound loan origination or servicing practices for loans in the GNMA program.

 

HUD is also promoting fiscal responsibility in the real estate finance market by ending irresponsible government obligations, while enabling a pathway for responsible citizens to become homeowners.

One such example was our decision to discontinue the FHA’s insurance of mortgages on homes that carried PACE liens. Through the PACE program, homeowners could obtain financing to make improvements to their homes to increase the home’s energy efficiency.

But FHA insurance not only put taxpayers at risk by allowing PACE liens to be placed ahead of the mortgage itself in the event of a default, it strongly threatened secured lenders by eroding the underlying mortgage collateral.

Further, PACE assessments were far less comprehensive than traditional mortgage financing products, and therefore lacked the same level of consumer protections. The FHA’s involvement with accepting properties with PACE assessments may have even indirectly helped to overshadow potential consumer abuses.

HUD appreciates that our decision to promote fiscal responsibility in this case was met with positive support by the MBA. Given the substantial risk that PACE loans represented to the FHA’s Mutual Mortgage Insurance Fund, I’m also reminded of an early lesson from medicine: “To treat a sick patient, the doctor has to stay healthy, too.”

 

Conclusion

While HUD is leading the fight to ensure decent, safe, and affordable housing for all Americans, we are grateful for the continued feedback and thought leadership on housing policy offered by institutions such as the MBA.

Solving affordable housing challenges requires a team effort. It’s been said that, “the bigger the dream, the more important the team” – and few ambitions are more compelling, or necessary, than that of the American Dream.

HUD looks forward to continuing to work alongside the industry participants here today, so our common vision is a lived reality for all who call this great nation home.

Thank you, and I look forward to your questions.

 

###

 

See related reports, further below the byline and notices. That’s this evening’s “News through the lens of manufactured homes, and factory-built housing.” © ## (News, analysis, and commentary.)

 

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Related Reports:

You can click on the image/text boxes to learn more about that topic.

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MHI’s Growth Agenda? Rick Robinson, JD, SVP Manufactured Housing Institute, Preemption Evidence, Writ of Mandamus, and Addressing HUD Code Manufactured Home Shipment Woes

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Mortgage Loans Applications “Tank” Two Looks at Rising Rates, MH Industry Impact?

February 22nd, 2018 Comments off
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Still from the video, posted further below.

 

Rates have moved closer towards 5 percent.

 

Loan applications are dropping, per the Mortgage Bankers Association (MBA).

 

What was problematic for conventional housing, 2 or 3 decades ago, used to be ‘good news’ for manufactured housing sales.

average-shipment-per-decade-manufactured-home-posted-on-mhpronews-com-d

Graphic provided by Ross Kinzler when he was then the executive director of the Wisconsin Housing Alliance (WHA).

That was then.

More recently, the HUD Code manufactured housing industry has not reaped a similar benefit as it did in the past.  Why not?  Those simple-yet-complex issues have been explored often on the Daily Business News, the Masthead and on MHLivingNews too.

ManufacturedHousingIndustryShipmentsFEMAManufacturedHomesNotMobileHomesTrailersIndustryResearchReportsDataMHProNews

Credits, MHI, Cavco.

In a nutshell, the industry’s image was arguably allowed to slide by the powers that be in manufactured housing.  Take the examples below.  Where is MHI on these problematic reports?

Combined with Berkshire Hathaway’s “moat” and anti-competition tactics – see the Clayton video linked below, as he says those things in his own words – and the MH industry’s mild growth, is clearly no where near the 500,000 new manufactured home shipments that it could be producing, per a variety of industry expert sources.

 

 

The numbers are getting uglier for potential homebuyers and homeowners looking to save money,” says left-of-center CNBC.Mortgage interest rates jumped again last week, causing mortgage application volume to fall 6.6 percent on a seasonally adjusted basis from the previous week.”

30YearFixedRateMortgagesCNBCDailyBusinessNewsMHProNews

 

Industry Pros Can Still Perform in Their Local Market(s)

The troubling news for conventional housing can be turned into good news for forward thinking manufactured home retailers and communities.

KYPs, and the $64 Billion Dollar Question-Monday Morning Manufactured Housing Sale$ Meeting

To learn more, click the link above and watch that video seminar featuring Credit Human’s Barry Noffsinger.

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Background, and Solution Related:

Deadline Looms! Federal Request for Comments on Manufactured Housing Program, and You

HUD Comment Letter – FR-6075-N-01 Regulatory Review of Manufactured Housing Rules

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Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

Calls for Housing Finance Reform Continue to Resound

July 13th, 2016 Comments off

mel watt  jacquelyn martin  associated press postedDailyBusinessNewsMHProNewsWhile many on both sides of the aisle recognize the importance of reforming the secondary housing finance system, 32 Congressional Democrats sent a letter to Federal Housing Finance Agency (FHFA) Director Mel Watt saying the government-sponsored enterprises’ (GSEs) capital base, which is set to expire in 2018, sends out a dark cloud for “underserved markets.”

Meanwhile, the Mortgage Bankers Association, National Association of Realtors, National Association of Home Builders, American Bankers Association and National Housing Conference also sent a letter to the FHFA saying Congress needs to take up the issue of housing finance reform, according to housingwire.

While Watt did not respond directly to the letters, in a letter not made public, but which The Wall Street Journal‘s Nick Timiraos revealed to MHProNews, Watt wrote, “I continue to believe that conservatorship is not a desirable end state and that Congress needs to tackle the important work of housing finance reform. In the meantime, however, you can be assured that FHFA will continue to fulfill its responsibilities to manage the conservatorships of the Enterprises in a safe and sound manner and in accordance with our statutory responsibilities.” ##

(Photo credit: Associated Press/Jacquelyn Martin–Mel Watt, FHFA Director, at his swearing in)

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

Housing Starts, Home Builder Confidence Fall; Building Permits, Mortgage Apps Rise

February 17th, 2016 Comments off

home planning theatlanticcities creditMHProNews has learned from investors that single-family housing starts dropped -3.9 percent in January to a seasonally adjusted annual rate (SAAR) of 731,000, but up +3.5 percent from last January. Multi-family starts dropped -2.5 percent on the month but slipped -3.8 percent for the year.

Despite housing starts being down, housing completions increased to an annualized 1.057 million, the highest rate since Nov. 2008.

Building permits rose +13.5 percent from a year ago January, although single-family permits nudged down -1.6 percent in January, but were 9.6 percent above January, 2015.

In addition, the Mortgage Bankers Association (MBA) reports mortgage applications rose +8.2 percent in the week ending February 12 following a strong showing of +9.3 percent in the previous week.

Meanwhile, the National Association of Home Builders (NAHB) reports home builder confidence for new single-family homes dropped three points to 58. The index has been at 60 or above since June, and in positive territory since the middle of 2014. ##

(Image credit:theatlanticcities–home planning)

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

Wells Fargo was Freddie’s Top MHC Seller in 2015

February 6th, 2016 1 comment

freddie_mac_loan_volume_scotsmanguide__freddie_macFollowing a story MHProNews posted Jan. 14, 2016 regarding GSEs Fannie Mae and Freddie Mac’s multifamily loans for 2015, which totaled just under $90 billion, rebusinessonline reports CBRE was Freddie’s highest-producing multifamily mortgage seller with $6.96 billion in originations.

Making the announcement at the Mortgage Bankers Association (MBA) convention in Orlando, Freddie reported Wells Fargo Multifamily Capital was the top manufactured housing community seller and affordable housing seller with $3.53 billion in originations. Freddie ranked number five on the list of the top multifamily lenders.

The nation’s largest source of financing for multifamily housing, Freddie Mac’s loans range from $1 million to several billion dollars. Approximately 90 percent of the loans are for low-to-moderate income rental units. Additionally, Freddie securitizes about 90 percent of the multifamily loans it purchases, which transfers the credit risk from taxpayers to private investors. ##

(Image credit:scotsmanguide-Freddie Mac loan volume)

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Lenders Receive Reprieve on Minor Errors in Closings

December 31st, 2015 Comments off

mortgage  housingwire creditThe Consumer Financial Protection Bureau (CFPB) gave lenders a slight reprieve on the Know Before You Owe rule that provides borrowers with all the charges, fees and line items three days before closing instead of at closing, saying they will not be held accountable for most minor errors in loan processing and paperwork.

By trying to avoid the opportunity for unscrupulous lenders and real estate agents to slip in higher interest rates and hidden fees, like what happened during the housing boom, some disruptions have occurred in home lending and closings.

CFPB Director Richard Cordray, in a letter to Mortgage Bankers Association (MBA) president David Stevens, said, “We believe that the risk of private liability to investors is negligible for good-faith formatting errors and the like,” Cordray wrote to MBA president David Stevens. “We recognize that a certain level of minor errors in the early days of implementation is to be expected,” as he noted that the GSEs and the CFPB are seeking good-faith efforts to come into compliance.

Lenders, realtors and title companies have seen the average time for closing loans rise as much as a week, which has cost some borrowers more in fees to lock in specific interest rates. “Needless to say, we think this is a very positive development,” said Pete Mills, a senior vice president at the MBA. ##

(Image credit: housingwire)

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FHFA Proposal could Reform Sale of Manufactured Homes

December 16th, 2015 Comments off

federal_housing_finance_agency__logoThe Federal Housing Finance Agency (FHFA) released a plan today, Dec. 15, 2015, that gives owners of manufactured home communities (MHCs) the opportunity to access financing by Fannie Mae and Freddie Mac (the GSEs), according to what nationalmortgagenews tells MHProNews. It also would provide incentives for states to convert manufactured homes, not secured by real estate, from chattel loans to real estate loans.

Under the proposal, GSEs would be required to offer financing for small MHCs with 150 or fewer home sites, which would allow them to earn “duty to serve” credits if they make blanket loans secured by the land and the home site in those communities. However, for this to work, the MHC owner must grant the residents a minimum one-year lease, and the right to post for sale signs and be able to sell their home on its current site.

The FHFA proposal would also require MHC owners to offer their communities for sale to the residents if they decide to sell.

In addition, the plan would create an opportunity for a secondary market for manufactured housing loans that are secured by real estate. Currently, lenders for buyers of MH have to carry their own paper. The Consumer Financial Protection Bureau (CFPB) reports, while two-thirds of MH buyers site their homes on land they own, they tend to finance the homes using chattel loans.

An FHFA official said, “A growing number of manufactured housing buyers are opting to place their homes on land they are purchasing or already own. These real estate loans perform better and have lower default rates than chattel loans.

Moreover, the FHFA is encouraging the GSEs to conduct a pilot program financing manufactured home loans not secured by land, and is also seeking comment on how chattel loans could be made safer for purchase by the GSEs.

David Stevens, president and chief executive of the Mortgage Bankers Association (MBA), said, “Manufactured housing is an important entry point for many low income homebuyers. Conducting a pilot program in order to gauge the effectiveness of purchasing these types of loans is the smartest, most efficient way to understand their performance.##

(Image credit: Federal Housing Finance Agency)

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Multifamily Originations Rise in Third Quarter

November 10th, 2015 Comments off

mortgage app   texaslendingtoday creditThe Mortgage Bankers Association (MBA) tells MHProNews loan originations for multifamily and commercial properties rose in Q3 2015, increasing 12 percent over the third quarter of 2014, and three percent on a quarterly basis.

Retail property loans posted the highest percent rise over last year, +39 percent, while multifamily property originations gained 11 percent.

The MBA projects commercial and multifamily mortgage originations will hit $485 billion in 2016, $225 billion of that in multifamily, the same as anticipated for this year. By the end of 2016, as nationalmortgagenews reports, total commercial and multifamily mortgage debt outstanding will total $2.8 trillion, an 1.8 percent increase year-over-year.

Borrowing and lending in commercial and multifamily real estate markets is strong,” said Jamie Woodwell, MBA’s vice president of commercial real estate research, in a news release. “Interest rates that have stayed lower longer than most anticipated and continued growth in property incomes and values are all pushing mortgage origination levels higher.##

(Image credit: texaslendingtoday)

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Implementation of TRID Rough; Charges Fly

October 21st, 2015 Comments off

mortgage    andyenstallblog  creditThe new disclosure rule which combines the previous Truth in Lending Act (TILA) requirements with the Real Estate Settlement Practices Act (RESPA) into one Integrated Disclosure, called TRID, has not rolled out well due to mortgage software problems and Congressional inaction, said CFPB Director Richard Cordray to the Mortgage Bankers Association (MBA).

The “Know Before You Owe” rule gives borrowers three days to examine loan documents before closing, but has drawn the ire of some lenders for potentially slowing down loan closings, and requiring borrowers to pay more for the lender to hold an agreed-upon interest rate longer. This is called a loan lock, because it locks in the interest rate during the closing of a loan transaction, but for a fee, as marketwatch tells MHProNews.

Prior to the new rule, the rate was good for 30 days, for which the consumer did not pay. However, some mortgage lenders fear with an extended closing period, the loan lock may have to go as long as 45 or 60 days, with consumers possibly incurring hundreds or thousands in additional costs to hold an interest rate.

Cordray denies closings have been longer or that consumers are incurring higher costs, saying, “These claims reflect a failure or perhaps a refusal to understand what the rule actually says.

Closing delays will not show up until sometime in November when the loans made after the Oct. 3 implementation date will start closing.

TRID was enacted in response to lenders during the housing boom of the last decade who would increase the interest rate, add fees or change loan products at the last minute. Under TRID, mortgage lenders have to give consumers more time to understand any changes to the transaction.

Cordray blamed vendors of the software for the problems. “Some vendors performed poorly in getting their work done in a timely manner, and they unfairly put many of you (lenders) on the spot with changes at the last minute or even past the due date,” Cordray said. He said the CFPB will focus on how these vendors ae affecting the marketplace.

Jonathan Corr, president and CEO of Ellie Mae, which distributes about a third of the TRID compliant software, said while some lenders were not adequately prepared, they are dealing with loans made before and after the new rules took effect, which requires two sets of software. “This is the biggest change to the mortgage industry in 40 years,” said Corr, noting the process will likely iron out by mid-2016.

Still, the MBA wants Congress to provide a grace period until Feb. 2016 so that errors made in the TRID rules will not lead to enforcement sanctions. However, the White House says the mortgage industry has had enough time to understand the disclosure rule and it would veto any legislation to extend the deadline. ##

(Image credit: andyenstallblog)

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Mortgage Industry Pushing for Four-month Grace Period from TRID

October 12th, 2015 Comments off

mortgage  housingwire creditAs the TRID (Truth in Lending Act, or TILA) and the Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure rules went into effect last week–also known as “Know Before you Owe”– mortgage industry groups continue to ask for a grace period of four months from enforcement actions and private lawsuits.

A survey of 71 Mortgage Bankers Association members revealed about one-third of them had not tested their new systems, and half of the respondents believe the new rules will lengthen the home-buying process and perhaps add costs to consumers, neither of which would be healthy for the industry.

The American Bankers Association (ABA) is concerned about the clarity of the rules, and that banks find it difficult to comply with these reforms. As scotmanguide tells MHProNews, a bill in the House of Representatives would extend the grace period until Feb. 1, 2016.

The industry has to produce new forms and change the way it discloses information to the buyer. It is also unclear where the trigger is that will unleash the might of the CFPB, or what might constitute a good faith effort to comply with the regs.

At the same time, two-thirds of the MBA respondents said they are ready and do not expect problems.

Tim Anderson, director of eServices at DocMagic, a document and compliance vendor, said, “It is just typical of this industry to push back on anything that is new. They don’t adapt well, especially if it is technology, and then [there is] the mistrust of this agency.

He stated the problems will not come until late next year when the CFPB starts auditing and possibly imposes hefty fines for non-compliance, which could mount up at the rate of $1,000. per day. However, CFPB Director Cordray said at a Senate hearing the agency’s approach will be more corrective than punitive, and that federal regulators will issue a letter explaining their policy.

CFPB spokesman Samuel Gilford reiterated the agency is seeking good-faith compliance. ##

(Image credit: housingwire)

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