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Posts Tagged ‘personal property’

Enriched Mobile Homes to be Taxed as Personal Property

April 23rd, 2015 Comments off

malibu_mobile_home__realestateandhomes__1_and_one_half_millionA measure which unanimously passed a California state Senate committee would reclassify mobile homes that have added foundations along Malibu’s tony seaside community as personal property, not vehicles, since they are now luxurious homes. In some cases, residents have purchased adjacent lots, and added architectural details, plus the foundations, disguising their origins.

These homes, high on the bluffs above the ocean, can bring up to $4 million, plus site rental of around $2,000 per month. As Reuters informs MHProNews, a recent online ad for a home in Point Dume Club is for a 1,700 square foot “architecturally perfect” home for $1,095,000.

Los Angeles County Tax Assessor Jeffrey Prang, who visited the communities recently, says construction is continuing. You’ll see a foundation with wood struts and in the middle you would see these black beams. You’d never know what they are to look at them, but they have these little metal identification plates that show the mobile home’s manufacturer,” notes Prang.

Sheila Dey, spokeswoman for the Western Manufactured Housing Communities Association, says, These trailers that were in Paradise Cove 60 years ago are still on the Vehicle License Fee. We feel they should have to pay property tax like everybody else.” The measure would only apply to new construction. ##

(Photo credit: realestateandhomes–Malibu CA $1.5 million mobile home)

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

Brown signs Brown’s Manufactured Homes Finance bill

August 30th, 2013 Comments off

ca-assessmbly-member-cheryl-brown_credit-inland-valley-news-posted-daily-business-news-manufactured-home-marketing-sales-management-mhpronews-California Governor Edmund Brown signed legislation – AB 379 – authored by Assemblymember Cheryl R. Brown (D-San Bernardino). The bill’s objective is to preserve access to manufactured housing by allowing it to be converted from “chattel” – personal property – into real property. Inland Valley News tells MHProNews a key motive for the bill was the Court of Appeals ruling in Vieira Enterprises v. City of East Palo Alto (2012). Vieira Enterprises filed a lawsuit against its property owner for failing to pay fees associated with the delivery and installation of two manufactured homes on real property. The Court of Appeals ruled against Vieira, citing the company lacked a security interest in the homes because they were real property. The ruling allowed the borrower to forgo paying paying the loan balance. Thus the ruling chilled lending to consumers interested in purchasing manufactured homes. AB 379 removes the legal ambiguity that resulted from the Vieira case and helps ensure that loans to consumers who purchase manufactured homes will continue. ##

(Photo credit, Cheryl Brown: Inland Valley News)

 

Five years after Dodd-Frank, Community Banks failing, Consumers suffer and Mega-Banks just fine

August 27th, 2013 Comments off

tanya-marsh-wake-forest-law-school-posted-daily-business-news-manufactured-housing-professional-news-Sounding off in the respected Huffington-Post, Wake Forest Law School Professor Tanya Marsh writes that: “First, the mega banks are just fine.”…”Second, community banks are definitely not fine.” and “Third, consumers are the big losers.” Marsh states that “In the second quarter of 2013, Bank of America saw a 63% increase in net income, Citigroup posted a 42% increase, JPMorgan Chase recorded a 32% increase, and Wells Fargo “only” logged a 19% increase. Headlines boast of the “record profits” enjoyed by the mega banks.” Even before the 2008 mortgage and financial system crisis, the professor said “…smaller banks saddled with a growing regulatory burden found it difficult to compete with more efficient mega banks. The result was a greater consolidation of assets in the hands of a few companies. The number of banks with assets of less than $100 million decreased by more than 80% from 1985 to 2010 while the number of banks with assets greater than $10 billion nearly tripled over the same period.”  Marsh said, “Financial activities that are fundamental to the average American are only worth the time of a mega bank if they involve a completely standardized product and a completely standardized borrower.” Marsh says that 5 years after Lehman Brothers failed, those who didn’t cause the financial meltdown are being punished, the mega lenders are just fine and consumers and small businesses are the big losers, if the pattern isn’t changed. As MHProNews readers can relate, as this is also true for ‘non-banking’ lenders, such as communities or retailers willing to make chattel (personal property) or offer lease purchase programs to potential borrowers who don’t fit a Dodd-Frank/CFPB regulation lending ‘box.’ ##

(Photo Credit: Wake Forest Law)

Fannie Mae: Manufactured Housing has Challenges to Overcome

June 27th, 2013 Comments off

In its latest Housing Insights report, Fannie Mae notes that while overall home construction fell by 70 percent between 2006 and 2011, manufactured housing (MH) began declining in 1998, falling nearly 90 percent. In 2012 MH accounted for 7.4 percent of total home construction, a substantial drop from 20.2 percent in 1998. The report says, “Given manufactured housing’s modest share of the total housing stock, the decline in manufactured home production might not seem important. However, manufactured homes account for an outsized share of low-cost housing, particularly among owner-occupants. Whereas manufactured homes account for approximately 7 percent of all owner-occupied homes, they represent 16 percent of owner-occupied units with monthly housing costs of less than $500.” As inman.com informs MHProNews, the average price per square foot for a manufactured home in 2012 was $42, less than half the square foot cost of a new site-built, single-family home. The report cites several barriers the industry must overcome, including limited conventional financing options due to titling of most manufactured homes as personal property, an underdeveloped secondary market for manufactured home loans, and pending financial regulations that could further curtail manufactured home lending.

(Photo credit: Jonathan Ernst/Reuters–Fannie Mae headquarters)

MH Industry Insider Perspective: Flash Report on QMs…Not good!

January 11th, 2013 Comments off

An industry insider has provided MHProNews with an exclusive of their flash report on the QM rules issued by CFPB yesterday. There was an 804 page Ability to Repay (“QM”) Rule issued on 1.10.2013 by the Consumer Financial Protection Bureau (CFPB), along with the 431 page High-Cost Mortgage (HOEPA – “predatory Consumer Financial Protection Bureau (CFPB), along with the 431 page High-Cost Mortgage (HOEPA – “predatory loan”) that was also released, so MHProNews must stress that this is preliminary and that expect a more in depth analysis by one or more professionals in a matter of days.

Our source(s) tell us that on the personal property (chattel) lending front: “On the predatory loan rule they gave us nothing. They essentially rebuked, did not believe us or didn’t like the way we lend.”

As examples, here are some select quotes from the CFPB’s rules:

“Moreover, the Bureau is not certain that manufactured home creditors would cease originating loans even if a portion of those loans exceed the high-cost mortgage APR threshold.”

“At the same time, however, industry commenters stated that manufactured home loans typically do not contain the types of loan terms that would be prohibited for high-cost mortgages. In addition, while the pre-loan counseling requirement will entail record
keeping and data retention costs, the Bureau notes that creditors are not required to cover the cost of counseling.”

“In sum, prior to adjusting the APR percentage point threshold for all manufactured home loans, the Bureau would need additional information showing why it is cost prohibitivein today’s market for a manufactured home lender to originate a first-lien, real
property-secured manufactured home (or a personal property-secured loan for greater than $50,000) with an APR of approximately 10.5 percent or less. For all of these reasons, the final rule adopts § 1026.32(a)(1)(i)(A) as proposed.”

MHProNews‘ insider source also commented: “They also used against us the, thank you Uniform Law Commission, recent recommendation for all homes to be magically deemed real property to chastise the majority of our lending practices (meaning)…personal property lending).”

As an example of that, this from the CFPB:

“The Bureau shares commenters’ concerns that a higher percentage-point threshold for personal property-secured loans could, if set too high, exacerbate incentives for creditors to steer consumers into titling their homes as personal property. The Bureau understands that such steering can and does currently occur in the market. Indeed, the National Conference of Commissioners on Uniform State Laws approved in July 2012 a Uniform Manufactured Housing Act that would simplify and streamline State laws to convert manufactured homes titled as personal property to real property and would prohibit manufactured home sellers from steering consumers to chattel loans rather than mortgages.”

These rules will go into effect January 10, 2014. So those manufactured housing lenders impacted, and not all will be, will have time to adjust. The industry as a whole can look to Capitol Hill champions such as Senators Sherrod Brown and Joe Donnelly to help provide a legislative fix.

The manufactured housing industry’s need for grass roots level activism coupled with the need for industry unity has arguably just been heightened.

For those industry professionals who retail homes and use FHA Title II or other mortgage lending products, Homebuilding tells MHProNews from their perspective (that of conventional housing, such as Pulte) that:

QM Preserves The Status Quo On Mortgage Underwriting Standards. Our key takeaway from the QM rule is underwriting standards may not change in the short run because QM provides up to a 7-year grace period for mortgages that meet current GSE and/or FHA underwriting standards. Since the underwriting status quo represents stringent standards for entry-level borrowers due to lender overlays, we do not view QM or the status quo situation as incrementally positive for entry-level buyers or entry-level builders including KBHome (KBH-$16.30:Hold) and D.R. Horton (DHI-$20.81:Hold).
·
The QM Rule Does Not Move The Federal Government Out Of The Mortgage Business. Another ramification we see from the QM rule is the government mortgage options, GSE & FHA, are likely to remain 90%-plus of new mortgage originations. Since most originators are already following the underwriting standards from the FHA and the GSEs, we do not see a clear business case for changing current standards.

The bottom line is that swift legislative action is needed to protect some personal property lending, while government backed loans like FHA Title II will be more important than ever.

Those coming to the LouisvilleShow.com who attend the MH Home lending finance forum on Wednesday January 23 will be able to hear and ask questions from the some 8 lenders expected to be present exactly what loan products you will have available in 2013. See the What People are Saying blog for the show brochure and more details. Expect more news, analysis and commentary on the CFPB’s action here at MHProNews.com in the days ahead. ##

(Image Credit: Steve Rhode/Get out of Debt .org – Editor’s note: the image is a joke, and
not the actual logo of the CFPB)

Senator Brown to CFPB: Relax High Cost Mortgage Rules

January 10th, 2013 Comments off

HousingWire reports Sen. Sherrod Brown’s (D-OH) letter to Consumer Financial Protection Bureau’s (CFPB) Director Richard Cordray asserts manufactured homes may become less attainable under the newly defined CFPB’s regulations that deal with high-cost mortgages. For mortgages on properties under $50,000, a high-cost mortgage is now defined as a first mortgage with interest rates of 6.5% (or 8.5% or more). Since MH mortgages are often low value and have more compliance requirements and penalties, lenders will be less likely to offer these loans, he said. “While these disincentives will help alleviate bubbles in the general housing market, they could also prove devastating to low-income families looking to purchase manufactured housing,” Sen. Brown asserted in his letter. Noting the new rules may smack of abusive lending practices, he asked Cordray to alter the high cost mortgage regulation, MHProNews has been informed. Last year, Kevin Clayton, president of Clayton Homes, testifying at the U.S. House Financial Services committee, noted, “The ability for lenders to securitize manufactured home loans in the secondary market, particularly those secured by personal property, has been very limited.”

(Photo credit: Deer Valley Homes)

MH Lending Opportunities and Regulatory Update

January 4th, 2013 Comments off

MHProNews has learned that the 2013 Louisville Show will include a free finance panel discussion that will feature all of the industry’s major lenders, showcasing their latest Dodd-Frank compliant lending programs. The focus of the panel presentation will be for each lender to highlight their top or new lending opportunities on personal property and land/home lending. The presentation will be followed by questions from the audience answered by participating manufactured housing lenders. Moderator Dick Ersnt, an expert in manufactured home lending, said: “Plan on attending the Industry Retail Finance Panel in Louisville to hear the latest information on the regulatory impact of Dodd Frank legislation from all the major industry finance sources; how it may affect their finance programs and what new and exciting programs will be available in 2013!” The panel will be from 10:00 to 11:15 AM on Wed January 23, 2013 at the Kentucky Exhibition Center (KEC). The Louisville Show is open to most industry members for free with proper ID and a business card. See LouisvilleShow.com and go to page two of the downloadable brochure linked below for the complete seminar line up.

http://louisvillemanufacturedhousingshow.com/2013-louisville-show-retailer-brochure-2/

(Image graphic: BloombergBusinessWeek)

Outstanding Tax Bill at Issue

November 26th, 2012 Comments off

According to myfoxpointnow, Milwaukee, Wis.-based MHC owner Asset Development Group’s value was assessed nearly seven times more in 2008 and 2009 than in the following two years due to failure to file a statement of personal property for the earlier years. While the firm has paid its taxes for 2010 and 2011 in the village of Fox Point, WI, unpaid taxes for its assessed valuation of $522,800 and $668,800 in ’08 and ’09, respectively, continue to accrue, and the bill is now up to $47,926. Despite repeated phone calls and statements from the village treasurer and the assessor to the company during that two-year period, there was no response. Asset Development’s new CFO, James McKevitt, blamed past mismanagement for the problems, saying the previous CFO is facing charges of embezzlement. While the village is considering litigation, KcKevitt sent a $7,157 check based on a previous valuation, asking that it be considered payment in full. Asset Development’s Dirk Hausmann, while acknowledging past missteps, says “This is one of several problems that have been on our plate,” he said of the delinquent taxes. “It’s not the character of the company to just ignore this sort of thing.” As MHProNews has learned, the village board may consider the matter in the future. Fox Point borders Lake Michigan just north of Milwaukee.

(Photo credit: progressive housing)

Modernizing Property Laws State to State

October 15th, 2012 1 comment

The Uniform Law Commission (ULC) states manufactured housing is considered personal property in most states because its origins as a home on wheels (trailer) being towed led to its taxation and licensing as a vehicle, but new MH today generally moves only once–from the sales lot to the site. The Commission tells MHProNews the laws for converting manufactured housing to real property vary from state to state, but it’s Uniform Manufactured Housing Act (UMHA) modernizes state property law. “The UMHA will benefit consumers by ensuring mortgage financing is available to qualified purchasers, and will benefit lenders, manufacturers, and dealers by providing a uniform regulatory system across all states that enact it,” the article says. For the full text, please click here.

(Image credit: CNNMoney)

Manufactured Housing Loan Advice

September 4th, 2012 Comments off

A reader tells the Las Vegas Review-Journal he purchased a new manufactured home in 2006 for $85,000 with $50,000 down and financed the balance for 20 years at 6.5%. The loan balance is $30,500 and the home is assessed at $56,000, but he cannot find a lender to help him take advantage of today’s low interest rates. Peter G. Miller, responding for the Review-Journal, says a new loan for a manufactured home would be about six percent because manufactured homes are considered personal property, not real estate that can be secured with a mortgage. He recommends using the money the reader would have spent on refinancing to pay down the current loan, which will reduce the loan balance and financing expense, as MHProNews has learned.

(Image credit: ehow)