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Posts Tagged ‘National Mortgage News’

Constraints on New Home Construction – Is MH the Answer?

March 14th, 2017 Comments off
ConstraintsonNewHomeConstructionIsMHtheAnswercreditClarkCountyHomeBuilders-postedtothedailybusinessnewsmhpronewsmhlivingnews

Credit: Clark County Home Builders.

New data from Redfin shows that more consumers than ever before are in the market for a home.

While sales are picking up, new home construction is well below levels prior to the recession of 2008.

Could manufactured housing be the solution?

According to National Mortgage News, there are key factors that limit new home construction.

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Credit: National Mortgage News.

 

Rising Land Costs are a factor, as many homebuilders who where able to grab empty lots as land prices tanked during the recession. They got a great deal and have built on the land, which is significantly more expensive now that it was just a few years ago.

Severe Labor Shortages are hurting the construction industry badly, with 184,000 construction jobs nationwide left unfilled. As the Daily Business News covered recently, a poll conducted by the National Association of Home Builders (NAHB) revealed that 76 percent of builders indicated cost and availability of labor as their major problem. The poll concludes that the anticipated construction labor shortage could cripple the improving housing market.

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Credit: National Mortgage News.

There are currently 184,000 open construction sector jobs,” said Robert Dietz, chief economist at the NAHB.

The rate of unfilled sector jobs has been on the rise and now stands at rates near cycle highs and at levels comparable to the housing boom period. The rising rate of unfilled jobs has slowed the construction sector’s net job growth.

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Credit: Real EstateSyracuse.

The “Renter’s Nation” continues to heat up, as many of the homes that were left vacant during the financial crisis became single-family rentals, and many flock to them to get the home experience, without the cost and restraints.

Credit: National Mortgage News.

Access to Credit is an issue, as it is still very difficult to obtain a traditional home loan, and without buyers for homes, homebuilders have a hard time justifying more home construction.

 

Manufactured Housing to the Rescue?

With all of the challenges facing new home construction, the manufactured housing industry remains a practical and viable solution to making the American Dream accessible to everyone.

Mega successful business people like Berkshire Hathaway’s Warren Buffett, Jim Clayton, founder of Clayton Homes, and ELS Chairman Sam Zell all understand the immense value proposition that manufactured housing provides, with Zell famously being quoted as saying during this interview, “Everyone calls them trailer parks. Pencil head, it’s not a trailer park.

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Credit: MHLivingNews.

For more on manufactured housing being the solution that’s hiding in plain sight, see MHProNews and MHLivingNews Publisher L.A. “Tony” Kovach’s insight into the opportunity linked here. ##

(Image credits are as shown above.)

 

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RC Williams, for Daily Business News, MHProNews.

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

“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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MHProNews Sponsor, for more information, click the banner above.

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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MHProNews Sponsor, for more information, click the banner above.

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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MHProNews Sponsor, for more information, click the banner above.

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.)

SoheylaKovachManufacturedHomeLivingNewsManufacturedHousingIndustryDailyBusinessNewsMHProNews-

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

Proposed Trump Tax Reform, Does it Change Affordable Housing Finance?

January 17th, 2017 Comments off
ProposedTrumpTaxReformDoesitChangeAffordableHousingFinancecreditNPR-postedtothedailybusinessnewsmhpronewsmhlivingnews

Credit: NPR.

President-elect Donald Trump has put forward a number of aggressive initiatives to spur or grow the U.S. economy.

On the subject of taxes, questions about the ramifications from changes abound.

And, the opportunities for the manufactured housing industry come clearly into focus.

According to National Mortgage News, proposed corporate tax reform is said to be causing delays in bank-backed financing for low-income housing projects amid a severe U.S. shortage of affordable units.

Investments by banks in housing developments have hit snags in the two months since Republicans swept the elections, according to bankers, auditors and affordable-housing advocates.

ProposedTrumpTaxReformDoesitChangeAffordableHousingFinancecreditLinkedIn-postedtothedailybusinessnewsmhpronewsmhlivingnews

Rob Likes. Credit: LinkedIn.

The sense that tax reform is within reach for the first time in decades immediately slowed things down,” said Rob Likes, national manager for community development at KeyBank.

We’re hearing about that from our clients and from the market.

 

One of the challenges that has been discussed is that the affordable housing market relies on subsides via the low-income housing tax credit program. Builders and developers use the credits to fund large portions of the cost of new housing projects.

Banks, in turn, make equity investments in the projects by buying the tax credits and in return claim a range of tax benefits over a period of 10 years. Some of those banks have told developers that they will reduce the amount of their investments in an effort to ensure the deals are profitable in the event that corporate tax rates drop.

Those moves create last minute gaps in financial plans that were potentially years in the making.

Different banks are approaching this differently,” said Buzz Roberts, CEO of the National Association of Affordable Housing Lenders.

Some banks have taken a ‘bit of a pause’ on making new investments, describing it as a ‘prudent’ move as banks wait for clarity on corporate rates.

Housing advocates and bankers said that they are generally confident that the low-income housing credit will remain intact, noting bipartisan support for the program.

Another possibility:  lawmakers may also expand the low-income housing tax credit program as part of a tax overhaul.

ProposedTrumpTaxReformDoesitChangeAffordableHousingFinancecreditNovogradac&Co-postedtothedailybusinessnewsmhpronewsmhlivingnews

Michael Novogradac. Credit: Novogradac & Co.

The probability of [Congress scaling back the low-income housing credit] goes up if people take it for granted,” said Michael Novogradac, managing partner at the accounting firm Novogradac & Co. “A strong advocacy effort is underway.

While things look promising, some banks are still scaling back their presence in the short term.

This is an unusual situation,” Roberts said. “We haven’t really seen a moment where tax reform seemed this likely in quite a number of years.

 

The Opportunity for Manufactured Housing

Offering consistent quality and effective pricing, the manufactured housing industry is well positioned to thrive under whatever tax reform plan ends up being implemented.

DonaldTrumpBenCarsonControversialPickHUDSecretaryManufacturedHousingMHLivingNews

With Dr. Ben Carson on the way to confirmation as Department of Housing and Urban Development (HUD) secretary, doing everything possible to assure Americans have the ability to secure quality, affordable housing will be at the top of the list for HUD.

For a deep dive into Carson’s nomination, including views from the MH industry, click here. ##

(Image credits are as shown above.)

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RC Williams, for Daily Business News, MHProNews.

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

Will FHA Auditors Bring Good News Come November?

October 10th, 2016 Comments off
FHA_logo_DoorToOwnership-postedDailyBusinessNewsMHProNews

Image credit, FHA.

Strong home sales are boosting originations of Federal Housing Administration (FHA) loans, opening the door for many first-time homebuyers.

According to the National Mortgage News, the strong loan volume could also portend the federal mortgage insurance agency is in line to receive a positive report this fall.

It certainly looks positive for the 2016 actuarial review of the FHA mortgage insurance fund,” said Brian Chappelle, a co-founder of the consulting firm Potomac Partners.

 

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Credit: FHA.

 

Independent auditors are expected to release the next actuarial report in November.

The latest production report from the FHA shows that lenders originated 622,757 purchase mortgages during the first three quarters of fiscal 2016, compared to 486,139 purchase loans during the same period in fiscal year 2015.

The FHA endorsed 895,713 single-family loans during the first three quarters of fiscal year 2016, up 21.6% from the same period last year ending June 30, 2015. And most of the mortgages are home purchase loans.

 

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Multi-sectional’s kitchen/dining area. Photo credit – eGreenHomesOhio.com.

Roughly 82% of FHA purchase mortgages in both time periods went to first-time buyers.

Another Manufactured Home Loan Option

As many  Daily Business News readers are already aware that VA, FHA Title II and USDA (Rural Housing) loans can all be used for manufactured home loans, so long as the deal involves real estate. A report covering consumer home loan financing options for manufactured homes is linked here.

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Manufactured homes have been attracting positive media attention, as the report linked here spotlights. Residential style single sectional shown, photo credits, Sunshine Homes – Red Bay AL, by ManufacturedHomes.com.

FHA also offers the Title I loan program, which may be used with ‘home only’ loans on single and multi-sectional homes on leased land and manufactured home communities.

FHA Logo

FHA Logo

The June FHA Performance Report also showed a significant drop in serious delinquencies over the past four quarters. Loans 90 days or more past due fell to 5.02% as of June 30, down from 6.12% a year ago.

Also of note in the report from the National Mortgage News, results from last November’s actuarial report showed the FHA’s ratio of reserves to guaranteed loans exceeded its minimum 2% threshold for the first time since 2008, but the FHA fund reached its minimum capital ratio with the help of the agency’s reverse mortgage program, which is an unreliable source of support and negatively impacted the FHA fund in FY 2014.

FHA lenders are hoping the new actuarial report will top last year’s 2.07% ratio, which might prompt Department of Housing and Urban Development officials to approve a reduction in FHA mortgage insurance premiums. In January 2015, FHA reduced its 135-basis-point annual premium to 85 basis points.

The negative is the runoff volume,” Chappelle said, which results from FHA borrowers refinancing into conventional loans.

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Brian J. Chappelle. Credit: Mortgage Bankers.

In the month of June, 111,000 FHA borrowers prepaid their loans. 25,600 refinanced back into an FHA-insured mortgage.

But it appears the increase in volume will make up for runoff, which is encouraging,” said Chappelle, who is also a former FHA official.

The wild card for any audit is the auditor’s projections for interest rates, home price appreciation and other economic factors over the next 30 years. FHA has no control over that. But in terms of current trends, it does look very positive from FHA’s standpoint,” Chappelle said. ##

(Image credits are as shown above.)

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RC Williams, for Daily Business News, MHProNews.

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

 

 

 

Housing Counseling and Loan Performance – what works, and others options for Home Buyers?

November 25th, 2014 Comments off

 

national-mortgage-news=graphic-credit-housing-counseling-what-works-best-posted-daily-business-news-mhpronews-com-Bonnie Sinnock, writing in National Mortgage News, outlines various viewpoints on the debated topic of how much value there is to pre-mortgage counseling for borrowers versus using other options. Programs like HAWK, Home Owners Armed with Knowledge, are among those explored.

Since manufactured housing lenders face the question of housing counseling being mandated if they go outside qualified mortgage and other Consumer Financial Protection Bureau (CFPB) parameters, considering this kind of discussion seems timely.

Some studies show that properly structured and delivered housing counseling and education provides a significant benefit to consumers and investors of residential mortgages.” says the Office of Housing Counseling, HAWK memo published in the Federal Register, May 15, 2014. The HUD – HAWK PDF report download is linked here.

Peter Zorn, a Vice President at Freddie Mac who specializes in housing analysis and research, was an author of the GSE’s study. Zorn advocates for more research on counseling, its benefits and best practices, “There are a lot of people talking about this sort of thing, and it’s an important public policy question,” said Zorn.

Sinnock says, “Fannie Mae and Freddie Mac require housing counseling (typically provided in conjunction with mortgage insurers) on higher-risk mortgages, like the low-down-payment products the government-sponsored enterprises plan to resume offering. And the Department of Housing and Urban Development is planning a pilot program to incentivize Federal Housing Administration borrowers with discounts on their mortgage insurance premiums if they receive counseling.”

A related article on the new Fannie Mae, Freddie Mac guidelines that would lower down payments, potentially boost lending so thus sales and make buy backs from lenders less onerous, is linked here.

The HAWK study, NMM’s report says, found that first-time homebuyers benefited more from counseling than repeat buyers. Delinquency rates also varied by the type of housing counseling that borrowers received, as is shown by the graphics.national-mortgage-news=graphic-credit-housing-counseling-posted-daily-business-news-mhpronews-com-

Borrowers who received housing counseling either individually over the phone or one-on-one in person had delinquency rates of 8.05% and 9.34%, respectively. Borrowers who received counseling in either a classroom group setting or through self-guided home study had delinquency rates of 13.3% and 15.08%, respectively.” Sinnock stated. Fears of fraud exist when using phone based counseling.

Sinnock also dives into the question why VA loans perform better than FHA loans.

Edward Pinto, co-director of the International Center on Housing Risk at the American Enterprise Institute (AEI) believes the VA loan program’s performance offers important clues that must be considered. He also says it is more cost-effective than housing counseling.

“We know what works. Do an ability-to-repay based on residual income,” Pinto said. “That’s going to work. It’s going to protect the consumer at the same time.”

The VA uses residual income and it works great,” Pinto explains.You collect the data, the underwriter underwrites it and you get your answer. It’s pretty straightforward.” AEI’s Pinto claims that the VA is one of the few loan sectors following the mortgage/housing bust that saw loans volumes and performance compared to FHA both increase.

Steve Calk, chairman and CEO of The Federal Savings Bank in Overland Park, Kansas said he wants to see more analysis, but stated thatDown payment and borrower reserves/residual income ensure that there’s a better opportunity for the long-term performance of a loan.”

The problem of built-in biases and agendas clearly has to be factored into all such discussions. HUD’s office title is revealing in this respect. Office of Housing Counseling. Any chance the OHC has an incentive to make housing counseling work? While performance is a good thing, the question of study accuracy and the impact of potentially impure motives must be considered by those who examine such reports. ##

(Graphic credits: National Mortgage News, based on Freddie Mac statistics.)

 

FHA loan performance and fund improving, report replete with irony for Manufactured Housing Lenders

November 19th, 2014 Comments off

projected-mmi-fund-fha-loans-credit=nationalmortgage-news-mhpronews-com-The Federal Housing Administration (FHA) recent actuarial report shows that the mortgage insurance fund is back in the black. FHA Title II loans are used for the financing of manufactured and modular homes as well as conventional housing.

NationalMortgageNews informs MHProNews that “the FHA’s Mortgage Insurance Fund reached a 0.41% capital ratio in fiscal year 2014, which ended Sept. 30, up from a negative 0.11% in the year prior. While the improvement was good news, the fund’s ratio was well below its statutory minimum of 2%.”

This report was part of Julian Castro’s recent interview with BloombergTV – which also covered the Obama Adminstrations goals for GSE reform – see the interview, linked here.

House Republicans are skeptical about the overall positive report.

We’ve heard similar rosy predictions about FHA finances for years,” House Financial Services Committee Chairman Jeb Hensarling said in a press statement. “Some in Washington are now clamoring for the FHA to lower its annual mortgage insurance premiums. But until the FHA fulfills its statutory requirement, that should be a non-starter.”

Chairman Hensarling is correct in saying there are calls for premium reductions, including from the National Association of Realtors (NAR), which said that 400,000 potential buyers were knocked out of the market in 2013 by the higher FHA premiums. Depending on loan size, analysts say the higher FHA risk premiums can cost a borrower $200-400 more monthly.

With the FHA’s MMI fund “on the path to recovery, NAR urges FHA to lower its annual mortgage insurance premiums and eliminate the requirement that mortgage insurance be held for the life of the loan,” said NAR President Chris Polychron.

Mortgage Bankers Association (MBA) President David Stevens – a professional who seems warm to manufactured housing – agreed.

FHA premiums are currently at an all-time high,” said Stevens, who was also a former FHA commissioner. “FHA needs to find the right balance so it can meet its mission and further grow its reserves by sustaining increasing volumes without being adversely selected.”

NMN’s Brian Collins, stated that “FHA endorsed nearly 566,500 forward loans in fiscal 2014, compared to 892,400 ten years ago. FHA also endorsed 40,500 reverse mortgage loans in fiscal 2014, compared to 37,800 in FY 2004.

Ironic Oversight in Facts?

What is lost these flying facts is that the CFPB in its recent report on manufactured housing lending comes off as seemingly crying foul for MH lenders charging to cover their risks and costs, while the FHA is praised by some for hiking premiums to cover risks in order for it to remain financially sound. Is that a double standard?

The Government Sponsored Enterprises (GSEs) have suggested they will lower down payments and essentially compete with FHA for the business it has traditional done. This comes at a time when FHA endorsed only some 566,500 forward loans in fiscal 2014, compared to 892,400 ten years ago.

As lending is a life-blood for all big ticket and home sales – including manufactured housing – MHProNews will continue to track such developments. ##

(Image credit: National Mortgage News)

Hefty fines prove risks of Violating the CFPB’s LO Comp Rules

November 17th, 2014 Comments off

 

cash401k2012flickrcreativecommons=credit-daily-business-news-mhpronews-com-Ari Karen, writing in National Mortgage News  reports a consent order that the Consumer Financial Protection Bureau (CFPB) has entered into a consent decree with Franklin Loan Corporation. The decree mandates the company to pay $730,000 in fines, based upon the allegation that Franklin improperly paid 32 loan officers bonuses. A civil lawsuit may follow. Plus 5 years of reporting to any person reporting to the company whose duties are impacted by the decree is part of the agreement.

Karen told MHProNews that, “If in fact these allegations are accurate, it is not surprising that regulators found such a compensation plan to violate the LO comp rules. Whether paid as arrears or paid as expenses, compensation that is predicated on the terms of loans is unlawful. What may surprise many lenders, however, is that Franklin is not a massive company. Indeed, the violation in question involved fewer than 40 loan officers.”

Karen elaborated, saying: “Hence, the myth that smaller companies do not need to worry about the CFPB and/or compliance is once again proven wrong. Once again, there is also proof a lender cannot outsmart the agency through inaccurate titles and/or “bonuses.”

Industry in Focus  shared a manufactured housing focused report on the CFPB’s 2014 rules, including the LO Comp rule, which is available free to industry professionals, linked here. ##

(Image credit: 401k2012FlickrCreativeCommons and MHProNews)

MBA’s Lobbying seeks to ease CFPB’s Mortgage Regulations

October 10th, 2014 Comments off

Dave Stevens-president-and-CEO-of-the-Mortgage-Bankers-Association-MBAAs midterms elections approach, the Mortgage Banker Association (MBA) is seizing the lobbying opportunity to fund Congressional campaigns; hoping to open more discussions to gain relief from the Consumer Financial Protection Bureau (CFPB) regulations currently in place in the U.S..

National Mortgage News told MHProNews that Dave Stevens, president and CEO of the Mortgage Bankers Association (MBA), explained he’s unsure of the results the association’s efforts will receive because of the presidential election is also approaching, which has its own agenda.

Because we’re heading into a presidential election, the longer we go into 2015, presidential politics dwarfs much of the debate,” Stevens stated. “I question how productive the upcoming year will be post-election.

Nevertheless, the MBA is pressing ahead and requesting changes in the strict regulations on loans and mortgages that were implemented following the 2007-2008 financial crisis.

According to the Center for Responsive Politics, the MBA is on its way to setting a new record in fundraising, with contributions of more than $950,000 going to Congressional campaigns.

open-secrets-credit-national-mortgage-news-posted-daily-business-news-mhpronews-com

 

The MBA’s lobbyists explain their motivation is to allow more people to buy homes and be able to afford mortgage payments. A change in the regulations will clearly benefit the housing market, and thus the broader economy.

Speaking about the Dodd-Frank Act, the MBA recognizes the good intentions of such regulations. However, Stevens and other members point out different consequences. While the act aimed at protecting customers, it turned out they often suffer from these current legislations because of high fees and the too many documents required to prove their ability to repay a loan.

Steven’s point, in the minds of many MH pros, is particularly true in the manufactured housing market.

The uncertainty of regulations offers the Manufactured Home (MH) market the space to attract consumers who in some cases cannot currently access conventional mortgages with bigger down payments on site built homes, as industry leaders like UMH’s Sam Landy have pointed out.

Should the MBA succeed in having Congress make the changes, could offer MH investors, lobbyists and other professionals other opportunities to attract new customers seeking homeownership. ##

(David Stevens photo credit : MBA.org, chart credit Open Secrets and National Mortgage News)

(Daily Business News article submitted by Lucine Colignon)

New Mortgage Rules may Hinder Home Sales

January 30th, 2014 Comments off

The National Association of Realtors (NAR) Chief Economist Lawrence Yun says the unseasonably cold weather in many parts of the country was responsible for the nearly nine percent drop in the pending home sales index (PHSI) from Nov. to Dec., 2013. Although the PHSI has been falling since May, existing home sales rose two percent in Dec. following a six percent drop in Nov., totaling 5.1 million for the year, an increase of 9.2 percent over 2012. Taking a conservative approach, as nationalmortgagenews informs MHProNews.com, NAR forecasts home sales will hold even in 2014 as the new mortgage rules go into effect.

(Photo credit: Paul Sakuma/Associated Press–pending home sale)

Fannie Mae’s Portfolio is Shrinking

January 2nd, 2014 Comments off

The secondary market mortgage portfolio of Fannie Mae has continued to decline, as directed by the government-service enterprise (GSE) regulator. The $42 billion in mortgages it acquired in November represented a 14 percent drop from October. As reported by nationalmortgagenews.com, Fannie’s portfolio fell below $500 billion for the first time in more than ten years. Just two years ago, MHProNews has learned the portfolio was at $700 billion. Fannie purchased $99 billion in loans in November from its lenders. Additionally, the secondary market agency committed to purchase $47 billion in November, a drop of 14.5 percent from October, 2013, the lowest level in two years.

(Image credit: housingwire.com)