Posts Tagged ‘nafcu’

DTS Manufactured Home Lending – Views to FHFA NAFCU, an Innovative MH Community Operator, and MHARR

March 24th, 2017 Comments off

Credit: Scott Lewis, Creative Commons.

Back in January, The Federal Housing Finance Agency (FHFA) issued a request for input (RFI) on its duty to serve (DTS) underserved markets ‘pilot program’ to finance manufactured homes, with a deadline of March 21st.

According to commentary from the Manufactured Housing Association for Regulatory Reform (MHARR), the request was an adjunct to its December 29, 2016 final rule implementing the Duty to Serve Underserved Markets provision of the Housing and Economic Recovery Act of 2008 (HERA), seeking public input on considerations that Fannie Mae and Freddie Mac should include in their determinations of whether to include manufactured home chattel loan pilot programs in their Duty to Serve Underserved Markets Plans.  And if so, how such pilots could be designed, taking into account policy, safety, and soundness considerations.


Text and image credit,

As the deadline arrived, there was no shortage of commentary and feedback from the industry and interested parties.

I am writing to you in regard to the Request for Input on Chattel Financing of Manufactured Homes. Overall, NAFCU supports the steps the Federal Housing Finance Agency (FHFA) has taken to increase the liquidity of the mortgage market and improve the distribution of investment capital available to very low-, low-, and moderate-income families,” said Ann Kossachev Regulatory Affairs Counsel for the National Association of Federally-Insured Credit Unions (NAFCU).


Ann Kossachev. Credit: LinkedIn.

Nonetheless, NAFCU’s members have expressed concerns regarding the entrance of Fannie and Freddie into the chattel loan market given the history of manufactured housing loans in the secondary market.

Kossachev continued with a cautious tone to the FHFA.

Therefore, NAFCU requests that the FHFA diligently evaluate the chattel loans market prior to requiring the GSEs to decide whether they should pursue a pilot program, thereby extending the time allotted for the GSEs to make such a decision,” sais Kossachev.

NAFCU also requests that the FHFA continue to be transparent in the implementation of the chattel loans pilot program through regular updates and opportunities for stakeholders to provide feedback so the industry may closely follow the progression of the program.

Kossachev also shared that there is, potentially, very serious danger in moving forward too quickly, and that more time was the key to permit GSEs to evaluate the chattel loans marker.

There is serious trepidation among NAFCU’s member credit unions that the implementation of the FHFA’s chattel loans pilot program will cause a negative disruption in the mortgage market. Namely, credit unions are worried that lenders will increasingly enter the chattel loan market because of the associated higher interest rates, ignoring the fact that there is typically a higher rate of delinquency for manufactured housing loans,” said Kossachev.

Delinquencies in the chattel loan market often occur later in the life of the loan, such that the manufactured home is worth much less than the outstanding unpaid loan balance. This type of circumstance creates a risky environment susceptible to a crash.

The full response from the NAFCU is linked here.

It should be noted that NAFCU references the same documents that MHProNews published earlier this month in a feature story on DTS, linked here.


A Response From an Innovative Community Operator

Brian Gallagher, COO, CPA, JD, MBA, of Santefort Real Estate Group in Westmont, Illinois, and owner/operator of 11 manufactured home communities located in Illinois and Indiana, comprising 3,000 home sites, also provided commentary to the FHFA.


Brian Gallagher. Credit: LinkedIn.

We are very confident that the Enterprise’s support of a secondary market for manufactured home community (MHC) chattel loans would be a win-win-win,” said Gallagher.

Secondary Market Investors (SMI) would receive higher yield investments with mitigated risk characteristics. Consumers would have access to more lending sources which, among other key benefits, would lower borrowing costs and unlock the equity value in their manufactured homes. MHC chattel home loan originators would have a source of funds to replenish their lending pools, leading to greater activity, jobs, and more Quality Affordable Housing for a presently unsubsidized and underserved consumer market.

Gallagher continues, stating that he sees a particular, innovative, method leading to success.

The Enterprises could bring this about through leading the development of ‘template transactions’ – standardized documents, PMI, and ‘Park Agreements’, pursuant to which the MHC’s in which the loan collateral is located agree to cooperate with originators and SMI to mitigate the risk of loss arising from borrower default. In sum, the Enterprises’ promotion of a chattel loan secondary market would satisfy their ‘Duty to Serve’ the lower economic classes which are disproportionately dependent upon manufactured home community living for their quality affordable housing needs.

The full response from Gallagher is linked here.



To see the related news story linked above, please click the graphic.

For a deeper dive into understanding GSEs, Duty to Serve, and manufactured home lending, including Eagle One Financials Titus Dare and his “4S’” of good lending, click here. ##

(Editor’s Note: a special review of MHI’s comments is planned after the Tunica Manufactured Housing Show.

(Image credits are as shown above.)


RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

CFPB ruled Unconstitutional, What’s Next?

October 11th, 2016 Comments off

Credit: Wikipedia, CFPB, HubPages.

In a huge story of interest for the MH industry, a federal appeals court declared that the U.S. Consumer Financial Protection Bureau’s (CFPB) structure is unconstitutional.

The 110-page ruling, handed down by the U.S. Court of Appeals for the D.C. Circuit, the nation’s second most powerful court, stated that the organization’s structure is unconstitutional because too much power is vested with it’s sole director, but that it can continue operating under the President’s supervision.

The ruling comes as part of an ongoing court battle between PHH, a non-bank mortgage lender and the CFPB.

PHH sued CFPB Director Richard Cordray after the agency issued an order against the lender for $109 million over an alleged kickback scheme around reinsurance payments. The CFPB accused PHH of referring customers to mortgage insurers who, in turn, bought reinsurance from one of PHH’s units.


Credit: National Mortgage Professional Magazine.

As a part of the legal action, PHH argued that the single-director structure of the agency and its funding outside of congressional appropriations were unconstitutional.

In the 2-1 ruling, the court found that the arrangement “represents a gross departure from settled historical practice of having multi-member commissions at independent agencies to keep them in check.

Executive power vested in the President can be conferred onto heads of lower administrative agencies, but that in doing so there have to be limits to that power,” the ruling said.

Agency directors may serve at the pleasure of the President, or in the case of independent commissions like the National Labor Relations Board or the Securities and Exchange Commission, directors are limited by the voting power of their fellow board members.


Judge Brett Kavanaugh. Credit: National Law Journal.

The CFPB is the first of its kind and an historical anomaly,” Judge Brett Kavanaugh wrote for the majority. Former President George W. Bush appointed Kavanaugh.

In short, when measured in terms of unilateral power, the Director of the CFPB is the single most powerful official in the entire U.S. Government, other than the President. Indeed, within his jurisdiction, the Director of the CFPB can be considered even more powerful than the President.

As Daily Business News readers are already aware, the ongoing battle surrounding the CFPB has been well documented, with our recent coverage around exactly what the CFPB does, and for whom.

richard cordray cfpb head 7-11

Richard Cordray.

As a result of the ruling, the court opted to strike the clause in the Dodd-Frank Act that said the CFPB Director could be removed “for cause,” essentially allowing the President to dismiss the head of the agency at will.

PHH argued that the agency should be shut down, but the court opted for a more narrow remedy, which allows the agency to operate by allowing the President to remove the director at will.

To remedy the constitutional flaw, we follow the Supreme Court’s precedents…and simply sever the statute’s unconstitutional for-cause provision from the remainder of the statute,” said Kavanaugh.

Here, that targeted remedy will not affect the ongoing operations of the CFPB. With the for-cause provision severed, the President now will have the power to remove the director at will, and to supervise and direct the director.

CourtRulesCFPBStructureUnconstitutionalcreditkarenhendersoncredittruthaboutgunscom-posted to DailyBusinessNews

Judge Karen Henderson. Credit: The National Law Journal.

In the dissenting opinion, Judge Karen Henderson, an appointee of Former President George H.W. Bush argued that PHH was “on firm legal ground in several of its specific complaints regarding the imposition of the CFPB’s $109 million fine,” but that the court should not have considered the constitutionality question at all.

Doing so rejects one of the most fundamental tenets of judicial decision making,” wrote Henderson. “Namely that courts should not rule on constitutionality questions unless they absolutely have to.

PHH can obtain full relief without our addressing the bureau’s challenged structure,” Henderson said. I do not believe that it is ‘indispensably necessary’ to resolve the for cause removal issue here.

Supporters of the CFPB blasted the decision, and want to see it appealed.


Karl Frisch. Credit: Stephanie Miller Show. criticized Kavanaugh for handing down what he described as a partisan ruling.

What this shows more than anything is that Judge Kavanaugh is in lockstep with conservative lawmakers and the Wall Street interests that have been trying to destroy the CFPB,” Frisch said.

The Hill reports that the ruling is viewed by CFPB supporters as a blow to consumers, pointing out that the agency led enforcement actions against Wells Fargo after that bank was found to have potentially created millions of fake accounts for customers.


Lisa Donner. Credit: Twitter.

Compromising the CFPB’s independence would be a huge gift to Wall Street greed and a loss for consumers. We are hopeful that this erroneous decision will be overturned, said Lisa Donner, executive director of Americans for Financial Reform.

The Hill also reports that the ruling marks a big win for the financial services industry and is certain to fuel new calls for replacing the director with a bipartisan commission.

We still assert a five-person, bipartisan board would preserve the Bureau as a strong, stable and effective regulator that would give the banking system certainty and consistency, regardless of a President Trump or Clinton,” said Richard Hunt, President and CEO of the Consumer Bankers Association.


Richard Hunt. Credit: CBA.

The National Association of Federal Credit Unions (NAFCU) argues that with the CFPB’s structure in question, it should not be doing anything. 


Dan Berger. Credit: NAFCU.

NAFCU urges an immediate moratorium at the CFPB on any rulemaking not already implemented,” said Dan Berger, NAFCU President and CEO. “The bureau should also consider ceasing and desisting all rule-makings until the legality is resolved.

Brian Wise, President of the U.S. Consumer Coalition, feels that Congress needs to take action.

Congress must pass comprehensive Dodd-Frank reform that includes an overhaul of the CFPB, including a change in the leadership structure,” said Wise, “Bringing the agency under the traditional congressional appropriations process, and subjecting it to the same anti-discrimination standards as other federal agencies and private corporations.

In addition to the question surrounding the constitutionality of the CFPB, the court’s ruling also addressed other issues related to the case.


Brian Wise. Credit: Freedom Fest.

According to National Mortgage News, the court ruled that the CFPB could not retroactively apply a new interpretation to the Real Estate Settlement Procedures Act, known as RESPA, which was substantially different from previous interpretations made by the U.S. Department of Housing and Urban Development (HUD.)

Additionally, the court said the CFPB has to apply the statute of limitations, which would reduce liability for PHH — and have a huge impact on other fines that the bureau imposes on others.

The Daily Business News will continue to follow this story closely. ##

(Image credits are as shown above.)


RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News, MHProNews.





Distinguished Speaker Line-up Set for Credit Union Congressional Caucus

September 4th, 2015 Comments off

natio_asoc_fed_credit_unio_nafcuThe National Association of Federal Credit Unions (NAFCU) Congressional Caucus is the association’s credit union lobbying event of the year, bringing hundreds of credit union representatives from all across the country to meet with lawmakers and earn about legislation that may affect them and their members.

The Congressional Caucus sponsors include Triad Financial Services, NAFCU Services Corporation, MasterCard, CUNA Mutual Group, FHLBank Atlanta and Geezeo, as cuinsight informs MHProNews.

Speakers for the event, set for Sept. 14-17, 2015 in Washington, include Sen. David Vitter, (D-LA), a member of the Senate Banking Committee and chairman of the Small Business and Entrepreneurship Committee; Rep. James Clyburn (D-SC), assistant democratic leader of the House; Rep. William Lacy Clay, (D-MO) a senior member of the House Financial Services Committee and the ranking member on the Financial Institutions and Consumer Credit Subcommittee; Rep. Krysten Sinema, (D-AZ), a member of the House Financial Services Committee and lead democratic co-sponsor of NAFCU-backed H.R. 2287, the “National Credit Union Administration Budget Transparency Act,” and National Credit Union Administration (NCUA) Director of the Office of Consumer Protection Gail Laster.

In addition speakers will also include Rep. Patrick McHenry, (R-NC), the U.S. House Chief Deputy Majority Whip and vice chairman of the House Financial Services Committee; and Maria Contreras-Sweet, administrator of the Small Business Administration. ##

(Image credit: National Association of Federal Credit Unions)

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

Credit Unions to Reduce Lending

May 20th, 2013 Comments off

The nationalmortgagenews reports in a survey of credit unions responding to the QM Rule issued by the Consumer Financial Protection Bureau (CFPB), 44 percent say they will no longer originate non-qualified mortgages and another 44 percent will reduce originations. In the survey conducted by the National Association of Federal Credit Unions (NAFCU) and CU Monitor Survey, 51.2 percent say they have begun adhering to the new rules in anticipation of the Jan. 2014 implementation date; 37.5 percent originated loans in 2012 that would not meet the QM criteria. The 76.2 percent of respondents that service mortgages expect the CFPB’s mortgage servicing requirements to run around $10k in initial costs and ongoing expenses, while 11.5 percent expect initial setup above $50k. Of the 23.3 percent who applied for a waiver 89 percent were granted, but 41.7 percent say the process was difficult. As MHProNews reported here May 16, in a speech to the National Association of Realtors (NAR), CFPB Director Richard Cordray said credit unions have a tradition of making good loans that may not qualify under the QM Rule, and they should continue doing so with borrowers that present a reasonable risk.

(Image credit: hansfax)

Credit Unions Testify at Senate Banking Hearing

March 6th, 2012 Comments off

The Senate Banking Committee was told by the National Association of Federal Credit Unions (NAFCU) of their opposition to mortgage reform that would eliminate the federal guarantee on mortgages through Fannie Mae and Freddie Mac and other GSEs (government-sponsored enterprises). The plan originally endorsed by the Obama administration would promote privitization of the secondary mortgage market, and the NAFCU fears the big banks who already compete with the smaller lenders for loan origination may dominate the secondary sector as well. The plan would also increase the fees Fannie and Freddie charge for mortgage guarantees, as well as eliminate the two lenders from business. NationalMortgageNews tells while the proposal does have strong Republican support, the White House and the Democrats are stepping back because of the impact resulting from a too-quick shutdown of the two GSEs, especially since they hold 90 percent of single-family mortgages.

(Photo credit: Wikipedia)