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“I Can’t Think of a Good Reason to Keep People from Buying Affordable Housing” – Manufactured Home Industry Voices Video

March 15th, 2019 Comments off

 

ICantThinkOfGoodReasonKeepPeopleFromBuyingAffordableHOusingManufacturedHomeIndustryVoicesVideoDailyBusinessNewsMHProNews

Numbers of these people are paying more for rental housing” than they would for manufactured homes, said then Senator Bob Corker (TN-R) in the video posted below. The headline quote is from an independent ‘mom and pop’ owned manufactured home community owner, who is also on this Inside MH video episode.

 

What both said they and others said at the time this video was made still applies today.

Flashbacks and history are massively useful, but only to those who are willing to clean the smudge off the lens of their glasses, see what was said then, and watch to see what has transpired since.  Every single voice on the second video below, every statement made, has relevance and value.

For example.

In hindsight, one could argue that it was never the Manufactured Housing Institute’s (MHI) belief that their publicly desired and supported Preserving Access to Manufactured Housing Act would ever pass.  But set that aspect of the video aside for now.

Several of the broader issues relating to financing and access to manufactured homes that this video tackles could matter as much or more today as it did the day this episode of Inside MH was first produced and published.

Imagine, then Consumer Financial Protection Bureau (CFPB) Director, Richard Cordray admitted on camera several useful facts for the industry.  Cordray, a Democratic candidate in 2018 race to be Governor of Ohio made admissions that are as useful today as they were when he said them. Sadly, several of those facts were arguably never properly illustrated by the fine folks whose factory-built housing association offices are in Arlington, VA.  But again, that’s an aside, not the main point.

Rather, at about the 5:30 mark in the Inside MH episode, Richard ‘Dick’ Jennison says something we referred to a few weeks ago.  The manufactured home industry, said Jennison on camera in front of a live industry audience, could achieve 500,000 new HUD Code manufactured home sales.  Compare that to the under 97,000 the industry actually achieved, 4 years after Jennison spoke.

 

MobileHomeShipmentsManufacturedHomeShipmentChartMHIAShipmentsMHIndustryChampionSkylineHUDCodeDailyBusinessNewsMHProNews

What was accomplished previously in sustainable shipment levels, can clearly be done again.

AnnualHUDCodeIndustryProductionTotalsMHARR2009to2018DailyBusinessNewsMHProNews

 

500,000 new HUD Code manufactured homes produced and sold should still be an active goal for retailers, communities, suppliers, producers – everyone that wants more affordable home ownership.

It stands in stark contrast with what he said months before, that the industry should grow slowly, noted in the 18 second video clip, below.

 

 

Before Jennison speaks at that 5:30 mark, former community owner, volume retailers and finance expert – MHI award-winner Marty Lavin – shared valuable insights.

Lavin, it should be noted, made these statements prior to the National Association of Realtors (NAR) or the FHFA research in 2018, both of which underscored the fact that manufactured homes were gaining in value.

That said, the principles Lavin addressed – properly understood are potentially huge for our industry. For example, with a better exit strategy for manufactured home owners who want to sell, several groups benefit.

  • The ability to more easily finance and sell a HUD Code home protects the value for its owner.
  • The ability to sell a home more easily benefits sellers and buyers alike.
  • The easier access to financing becomes a reality, and the more Americans understand that opportunity to enjoy appreciation in an appealing home praised by numerous third parties in 2018, the healthier that is for almost every segment of society.

We’ll note that we waved bye-bye to our videographer on this video some time ago, but it still conveys its points effectively.

 

 

The video raises other topics that the recent Duty to Serve (DTS) letter MHI signed onto to the FHFA should be raising concerns about. See that in the related topics, by the by lines, notices and offers.

There is a need to look back, look around, and look ahead.  When you drive a car, you don’t look down, you don’t look up, you grab glances that give you a sense of what’s 360.  That’s true for business, investing, public policy, and more.  Looking back at this video, it is relevant today, and will continue to be until the industry begins to achieve its true potential.  Then, it will be relevant as a reminder of how low the industry’s professionals and investors allowed itself to sink.

That’s this tonight’s “News through the lens of manufactured homes, and factory-built housing” © where “We Provide, You Decide” © ## (News, analysis, commentary.)

 

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Investors, Professionals, Planners, Advocates – Examining Affordable Manufactured Home Industry Market Potential

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DTS Manufactured Home Lending Committee Member Says MHI in “Unholy Alliance” to Divert Needed GSE Support Away from Manufactured Housing

 

Surprising Solution, Roadblocks to U.S. Affordable Housing Crisis

 

 

 

 

 

House Financial Services Committee Chairman Jeb Hensarling Reacts to CFPB Controversy

November 29th, 2017 Comments off

HouseFinancialServicesCommitteeChairJebHensarlingRTX-AP-DailyBuisnessNewsMHProNewsWASHINGTON, D.C. — House Financial Services Committee Chairman Jeb Hensarling (R-TX) was interviewed on Tuesday and Wednesday about the change in leadership at the Consumer Financial Protection Bureau (CFPB).

The interviews began with a focus on the controversy over who is running the CFPB.

As Daily Business News readers know, on his way out the door, Richard Cordray ‘appointed’ his deputy, Leandra English, to run the agency.

Leandra English Sues to Control CFPB, Who’s Legally in Charge?

President Trump meanwhile tapped White House budget director Mick Mulvaney as the interim agency head.

Mulvaney Moves Quickly to Start Reigning in the CFPB

House Financial Services Committee Chairman Hensarling sees that legal controversy, which is likely to end up favoring the Trump Administration, differently than others do.

This is a last, desperate gasp of the previous director who came in under a legal cloud and he will go out under a legal cloud. This is a waste of time.  But the problem is not so much who is running the CFPB,” said Hensarling.


The problem is the CFPB…This is an agency that absolutely has to be reformed,” Hensarling statement to MHProNews said.

Its the latest in what Senator Ron Johnson from Wisconsin called, “Sabotage,” part of the resistance to the Trump agenda. 

“Sabotage” says U.S. Senator

But in spite of that “sabotage,” Bloomberg’s recent report reflects overall satisfaction by Trump voters, one year after the election.

8 Trump Voters, One Year Later – How They Feel, per Bloomberg

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Mulvaney Moves Quickly to Start Reigning in the CFPB

November 27th, 2017 Comments off

MickMulvaneyCracksDownConsumerFinancialProtectionBureauCFPBThe question might be a coin toss for many in the manufactured housing industry.

Which federal agency has caused the manufactured home (MH) industry and its consumers more head-aches and heart aches in the last 5 (+/-) years?

Some would say, it’s the Department of Housing and Urban Development (HUD). But others would no doubt answer that it’s the Consumer Financial Protection Bureau (CFPB).

Manufactured home retailers and communities alike had their worlds upended by the CFPB.

Thus, the swift moves by White House budget director Mick Mulvaney, named by the Trump Administration as the interim director of the CFPB by until the Senate confirms a permeant nominee, will be met with some smiles by many in MHVille.

Two videos by Fox News show the state of play in the chess moves by Leandra English, who has sued to get the job that Richard Cordray gave her. For the left-right media tilt chart, click here.

 

Leandra English Sues to Control CFPB, Who’s Legally in Charge?

The Bloomberg video points to pro-CFPB Senator Elizabeth Warren’s take on the matter.

If Mulvaney and the White House prevail, it could be one of the more significant outcomes for the MH industry, which lost lenders as large as U.S. Bank due to the CFPB’s onerous policies.

Bank Vault Door Closes on Manufactured Housing Lender

The article linked below names some of the others who exited the industry’s lending as a result of the CFPB’s regulations.

Sam Landy, UMH CEO, on Dodd-Frank and The Preserving Access to Manufactured Housing Act – S 682/HR 650

The issue has the potential for making pursuit of Preserving Access irrelevant.

“Perverse”–Warren Buffett-Dodd-Frank, CFPB, Manufactured Housing, Loans, Independent Businesses Fact Check$

The Daily Business News will continue to track this breaking issue.  ## (News, analysis, and commentary.)

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Leandra English Sues to Control CFPB, Who’s Legally in Charge?

November 27th, 2017 Comments off

LeandraEnglishCFPBLawManufacturedHousingIndustryDailyBuisnessNewsMHProNEwsLeandra English, a career staffer appointed Friday to lead the CFPB,” is suing the Trump administration for control over the CFPB, reports a range of sources, including the right-of-center Wall Street Journal, and left-of-center media outlets such as the New York Times, LA Times and others.

Outgoing director, Richard Cordray, appointed English to succeed himself last week.

President Donald J. Trump named as temporary head of the federal agency, Office of Management and Budget Director Mick Mulvaney.

Mulvaney Is a harsh critic of the agency,” reports Reuters. “Trump wants Mulvaney to run the CFPB until he can get a permanent successor confirmed by the Senate, a process which could take months.

Due to English’s filing suit on Sunday, it sets up “The unprecedented battle reflects competing visions of how to regulate the U.S. financial system.” said Reuters.

Besides potential impacts on manufactured housing finance and related issues – see link here –  the move could cause some tremors in the markets.

The Department of Justice (DoJ) signaled last week that it would back the president’s authority, as the chief executive of the federal government.

But it looms as a big D.C. battle.

RickMulvaneyBudgetDirectorNamedCFPBinterimHeadDailyBusinessNewsMHProNewsDick Durbin, the U.S. Senate’s No. 2 Democrat, told CNN on Sunday that “Wall Street hates it like the devil hates holy water.”  Reuters said, “While the legal battle rages, the CFPB’s enforcement work will be put in limbo,” and “Anything that the agency does or fails to do could be subject to challenge until this cloud is removed,” said Harvard Law School professor Laurence Tribe.”

Trump Administration officials claim the president has the power to appoint an acting director under the 1998 Federal Vacancies Reform Act.  Mary McLeod, the CFPB’s own general counsel, issued a three-page memo agreeing.

I advise all Bureau personnel to act consistently with the understanding that Director Mulvaney is the Acting Director of the CFPB,” McLeod’s memo, dated November 25, stated.

Even the left-of-center Bloomberg’s take this morning reflects that the Constitution favors the Trump Administration.  But the fact that this tactic was launched at all is just the latest in the disturbing trend that some in the conservative media are calling the “deep state” resistance to the Trump Administration’s legal authority.

An previous and related Daily Business News report on this issue is linked below. ## (News, analysis, and commentary.)

Obtained Email Details Richard Cordray Resigning Soon, Cong. Hensarling Reacts

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Will CFPB Director Cordray Oust Himself? CFPB Legal Battles Update

July 31st, 2017 Comments off

WillCFPBRichardCordrayOutHimselfRunGovOhioCNNMoneyDailyBusinessNewsManufacturedHomeIndustryResearchReportsMHProNewsIt’s no secret that manufactured housing, along with others involved in finance, have been struggling for years to adapt to the new world created by Dodd-Frank and the Consumer Financial Protection Bureau (CFPB).

Long awaited changes appear to be underway for the agency, including rumors spreading that Director Richard Cordray will be leaving his position at the CFPB to run for Governor of Ohio, per HousingWire, Cleveland and others.

Since earlier this year, the Trump Administration has hoped to dethrone Director Cordray, but have not done so at this point in time.

Now it appears that Cordray may be leaving his position voluntarily, as it would be required if he does decide to run for governor.

The person I was talking to last week was saying that [Cordray] is basically trying to get as many projects done in Washington as he can before he leaves,” Ohio Supreme Justice Bill O’Neill told Cleveland.com. “But they left me with the clear impression that he is leaving.”

OhioSupremeJusticeBillO'NeillCreditsCleveland.comDailyBusinessManufacturedHomeIndustryNewsResearchReportsMHProNews

Ohio Supreme Justice Bill O’Neill, credit, Cleveland.com.

As it stands now, Cordray has made no formal announcement of his potential political run.

But O’Neill is one of at least two individuals who have decided to hold off on the idea of running themselves, knowing that Cordray is likely to enter the race.

Candidates for Ohio’s Governor need to have their petitions filed before February 7, 2018.

But according to Bloomberg, in order for Cordray to have a solid chance at winning the election, he would need to file and start campaigning by the end of the summer.

CFPB Legal Battle Update

The CFPB has proposed and made several changes this year.  That includes suggested changes to the Home Mortgage Disclosure Act (HMDA), banning mandatory arbitration clauses, and finalized updates to the TILA-RESPA Integrated Disclosure rule, among others.

It appears to some that Cordray wants to get as much done before leaving the CFPB as possible – even though he will not be finishing out his five-year term, which would otherwise end in July 2018.

RichardCordrayDemocraticPartyWikipediaDailyBusinessNewsManufacturedHomeIndustryMHProNewsIf Director Cordray wishes to issue midnight rules, to hire or adjust the status of CFPB employees, to obligate CFPB funds, or to accelerate agency investigations, he should first commit to serving his full term. If he will not do so, the honorable course of action would be to resign and leave such decisions to his successor,” said Congressman Jeb Hensarling (R-TX-5), chairman of the House Financial Services Committee.

CongJebHensarlingRTx5ChairFinancialServicesDailyBusinessNewsManufacturedHomeIndustryResearchReportsMHProNews

For now the question on whether or not Cordray will leave the CFPB to run for governor will remain open-ended. In the meantime, there’s more than just Cordray’s potential resignation happening at the CFPB.

Borders & Borders Wins Court Case Against CFPB

As regular readers of the Daily Business News might remember, the CFPB has had its structure being constitutionally questioned, due – for example – to the sole director having too much power.

The final outcome of this case CFPB vs. PHH, is still undetermined, so the legal court battle wages on.

However, this latest ruling out of a federal district court in Kentucky in the case of CFPB vs. Borders & Borders has become another victory against the CFPB.

RentersNationCollageManufacturedHomeIndustryDailyBusinessNewsResearchReportsMHProNews

To see an in depth report with quotes and comments by those shown and many more, click the photo collage above.

According to the Consumer Finance Monitor by Richard J. Andreano, Jr., “In the case, CFPB v. Borders & Borders, the court granted the summary judgment motion of Borders, finding that joint ventures related to Borders satisfied the statutory conditions of the RESPA section 8(c)(4) affiliated business arrangement exemption.  The court referred to the exemption as a ‘safe harbor’.  The CFPB had alleged that the joint ventures did not qualify for the safe harbor because they were not bona fide providers of settlement services.”

The investigation into Borders goes back as far as 2011, when the Department of Housing and Urban Development (HUD) – which was previously in charge of RESPA – was looking into the company for Section 8 violations.

In 2012 the CFPB took over the investigation.  By 2013 they were in court, with the Bureau alleging that distributions from Borders, “are not subject to the “safe harbor” for affiliated business arrangements in [RESPA Section 8](c)(4) – which authorizes certain referrals to providers of settlement services – because the Title LLCs did not constitute bona fide “providers of settlement services” within the meaning of RESPA. The payments they made to the Individual Defendants and the Joint Venture Partners did not constitute bona fide returns on ownership interest . . .

RichardCordrayCFPB-ManufacturedHousingRegulationsCSPANstill-InsideMHvideoPostedMHProNews-com-

Richard Cordray quotes and those from the report and video on this page, linked here.

This ruling in favor of Borders & Borders could very much be related to a ruling in another similar case, Carter vs. Wells Bowen Realty Inc. In that 2011 case, the U.S. Court of Appeals for the Sixth Circuit ruled in favor of Carter.

In the Carter case, private plaintiffs asserted that certain joint ventures did not qualify for the affiliated business arrangement safe harbor based on the bona fide settlement service provider requirement that HUD set forth in the Statement of Policy.  The court determined that the defendants satisfied the three statutory conditions of the affiliated business arrangement safe harbor, and based on this determination the court ruled in favor of the defendants.”

There is also an on-going investigation into the real estate website Zillow for violating RESPA. The CFPB recently issued a warning to Zillow, but no further action has been taken yet.

Lenders should see this as clear warning that any arrangement with a real estate agent that is used to disguise payments for referrals will be critically reviewed by the CFPB for RESPA violations,” said Daniella Casseres, principal at Offit Kurman. ##

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JuliaGranowiczManufacturedHomeLivingNewsMHProNews-comSubmitted by Julia Granowicz to Daily Business News for MHProNews.

 

 

 

‘CFPB Rectal Exam,’ Congressman Stresses Need for Credit & Financial Reform, Manufactured Home Pros React

June 21st, 2017 Comments off

CongStevePearceNM2R-DailyBusinessNewsManufacturedHousingIndustryReportsResearchDataMHProNewsCredit is one of the most powerful devices of the financial system designed over time by modern societies. It gives people the freedom to spend money now – whether to cover a medical expense, an emergency repair, buy a home or send their child to school – and pay it off later,” wrote Rep. Steve Pearce, Congressman from New Mexico’s 2nd district.

Pearce stated in a column published in the Albuquerque Journal  that there are risks and rewards with credit, but underscores how important it is for businesses and consumers alike.

Pearce said, “Half of the homes in the 2nd Congressional District of New Mexico are manufactured housing. The [CFPB] bureau took several actions that resulted in all but one or two banks no longer lending for those.”

This bureau [CFPB] was tasked with protecting consumers – a laudable goal. Very quickly though, the bureau began to show it had no idea how or why many elements of the credit markets were established. As it began to regulate those elements out of existence, credit to the poor began to dry up. People in New Mexico soon began to see their opportunities disappear because their sources of credit were diminishing before their eyes,” wrote Pearce.

The congressman then walks, step-by-step through his case for making the Financial Choice Act the law that will reform the well intentioned – but in his view, fatally flawed – Dodd-Frank Act, and its offspring, the Consumer Financial Protection Bureau (CFPB).  The congressman’s full comments, are linked here.

Manufactured Home Industry Reactions

JDHarperExecutiveDirectorArkansasManufacturedHousingAssociation-credit-LinkedIn-posted-DailyBusinessNews-MHProNews-

JD Harper, Executive Director, AMHA, credit, LinkedIn.

I’m thankful that many of our elected officials in Washington D.C. – like Rep. Steve Pearce from New Mexico and Rep. French Hill from Arkansas – have heard and understood the concerns that their constituents – including community bankers and the manufactured home industry – have with the real-world negative impact that some of the provisions of Dodd-Frank have had on working families seeking to purchase an affordable home,” said JD Harper, of the Arkansas Manufactured Housing Association (AMHA).

Harper says, “I can only hope that the United States Senate will agree to act upon at least some of the less-controversial provisions contained in ‘The CHOICE Act’ – specifically those reforms aimed at helping manufactured home buyers access financing – instead of allowing a few Senators [to] derail this much-needed legislation with ‘scare tactics’ and ‘Doomsday Scenario’ rhetoric.”

A long-time “Lonnie dealer” type operation said they’d love to comment on this issue to MHProNews, but they didn’t want a “CFPB Rectal Exam. For decades, Lonnie Scruggs financed used pre-HUD Code mobile homes, and post-code manufactured homes as well on an ‘owner carry’ basis.  That created a path to ownership for thousands who could otherwise only rent.

Many of those Lonnie dealers often made a good return on their investment. Some would then reinvest in more inventory, which meant that more homes could be purchased, and more home ownership opportunities created.  It was a classic free enterprise solution for affordable housing at work.

How many of those who once bought from a Lonnie dealer are today left renting, or are pushed into subsidized housing?

CaliforniaDreaminAnotherManufacturedHomeCommunityUnderSiegecredtihomes-postedtothedailybusinessnewsmhpronewsmhlivingnews

An older manufactured home in a land lease community. Credit: Homes.

MH Community Sector Response

DTSManufacturedHomeLendingViewtoFHFANAFCUanInnovativeMHCommunityOperatorandMHARRcreditLinkedIn2-postedtothedailybusinessnewsmhpronewsmhlivingnews

Brian Gallagher. Credit: LinkedIn.

It is difficult, if not impossible, to properly discuss all of the issues raised in this column and their impact on the Manufactured Housing industry in general and on MH financing in particular in a brief response.  Our small firm is also significantly impacted by the new regulations,” said Brian Gallagher, Chief Operating and Financial Officer, Santefort Real Estate Group.

No one should be in favor of oppressive, ineffective regulation,” said Gallagher, who stressed that sound, effective regulation would be good for consumers and the industry alike.  But Gallagher points out that the Choice Act has its own exceptions to the rule.  For example, he points to carving out protections for payday lenders, not offered to others in finance.

Gallagher laid out the burdens, risks and costs the current regulatory structure created for his operation, and wonders what good if any it does for potential home buyers?

Former Association Chair, and Retailer’s View

KarleRaddeSouthernComfortHomesBryanTX-postedDailyBusinessNewsMHProNews-

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

Let’s forgo affordable housing for a bit and think of rent to own furniture places or pawn shops,” said Karl Radde of Southern Comfort Homes. He pointed to the example of rent-to-own stores, which he said he wouldn’t personally use, but others clearly find them beneficial.

Radde rhetorically asks, “If we try to ‘protect’ someone by over-regulating that industry, are we not in fact saying ‘You can’t have a TV?’”

Radde, the former Texas Manufactured Housing Association (TMHA) chairman, then raised a point that’s often missed. Namely, when owner financing is eliminated – something that Pearce noted in his editorial – then resale, values, and other economic consequences result.

At that point [in the absence of owner financing], the value of those homes dramatically decrease because they became worth only what someone could afford to pay for them in cash transaction,” said Radde.

That’s not only true of manufactured housing, but was equally true of conventional housing values.  When lending dried up in 2008/2009, existing conventional house values crashed.

Radde detailed more experiences, such as the need for being able to guide a home buyer into the better lending option, without being accused of ‘steering’ under the so-called MLO rule. He then applauded the financial reforms that Congressman Pearce, along with several manufactured home industry associations, are promoting.

TownAmendsManufacturedHomeOrdinancecreditRealtor-postedtothedailybusinessnewsmhpronewsmhlivingnews

When the resale values of older manufactured homes are diminished or cut off due to regulations imposed by the CFPB, then the sale of new homes also suffers. Profits, jobs and opportunities are lost. A  home in McCrory, Arkansas. Credit: Realtor. 

Off the Record…

“…I’m not interested in doing an on-the-record comment on this,” at this time, said a party informed and engaged on industry financing issues, but wishing to avoid the political limelight.  “A point that you might want to make, though, is that Dodd-Frank is not the only significant impediment to access to consumer credit for manufactured home purchases.  There is another major impediment that has helped to distort 80% of the mh consumer financing market and that is the GSEs failure to provide secondary market and securitization support for mh chattel loans.”

That statement on the need for not just Dodd-Frank reform or replacement, but the need to implement the now almost decade-old Duty to Serve (DTS) mandate created by the Housing and Economic Recovery Act (HERA 2008) is one that several industry professionals made in their own words.

manufactured-home-living-news-sunset-village-manufacturedhomecommunityglenview-il--660x330

Many public officials are regulating homes they have little or no true understanding about. Photo, Sunset Village, Glenview, IL – credit, MHLivingNews.com. Caption comments by the editor.

Congressman Pearce’s Purpose

New Mexico’s Rep. Pearce said that cutting off access to credit harmed a range of things important to those in his state.  Home ownership, property values, business and jobs were all being harmed.

This [CFPB regulations] resulted in fewer jobs for New Mexicans and less support for our local economies. Along the way, the bureau established guidelines that resulted in banks in Deming being regulated the same way as banks in New York City.”

Pearce noted that he tried the direct approach with the CFPB, to no avail.

IDontThinkThereWasEverMuchHighCostLendingInTheManufacturedHousingMarket-stillcreditCSPAN2--RichardCordrayCFPBdirector-Posted-MHLivingNews-com-

Richard Cordray himself said that there was never much high cost lending in the manufactured housing industry market, still from in an MHLivingNews video, linked here.

I have personally sat down multiple times over the last six years with the head of the CFPB and the chairman of the Federal Reserve to express the damage the bureau’s actions have caused to New Mexico. They just don’t seem to care about the effect on the poor, rural areas and the weight of their regulations. For these reasons, I’ve joined Chairman (Rep. Jeb) Hensarling, R-Texas, of the House Financial Services Committee to pass the CHOICE Act, repealing many of the ways that the bureau flagrantly ruins the hopes and dreams of those who financially struggle,” the New Mexico congressman said.

Pearce concludes, “It is my aim to see that even the most economically fragile in New Mexico have the opportunity and resources to earn their way to success.” ##

(The congressman’s full comments, as published, are linked here, as a download. Note, this column drew extensive comments from those quoted above, which MHProNews plans to publish in full in the days ahead.)

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

Company Moves in for the Kill on CFPB

March 15th, 2017 Comments off
CompanyMovesinfortheKillonCFPBcreditFlickrPHHCFPB-postedtothedailybusinessnewsphonewsmhlivingnews

Credits: Flickr, CFPB, PHH.

In a story that the Daily Business News has followed closely, mortgage company PHH is taking its battle with the Consumer Financial Protection Bureau (CFPB) to a new level.

According to HousingWire, the company is asking the Court of Appeals for the District of Columbia Circuit to not simply declare the leadership structure of the CFPB unconstitutional.

 

It wants the Court of Appeals to completely kill it.

In a new legal filing in advance of a full court hearing in May, PHH declares its opposition to the continued existence of the CFPB in a new filing, where it says, in part, that “in light of the many constitutional problems that plague the CFPB’s structure, the appropriate remedy is to strike down the CFPB in its entirety.

While the CFPB had the support of the Obama Administration, the Trump Administration has had the organization in its crosshairs since the election.

GOPSenatorstoPresidentelectTrumpFireCFPBHeadRichardCordraycreditCNNMoney-postedtothedailybusinessnewsmhpronewsmhlivingnews

CFPB Director Richard Cordray. Credit: CNN Money.

Digging into the filing by PHH, it’s clear that the company views the CFPB as dangerous.

 

 

 

 

In creating the Consumer Financial Protection Bureau, Congress placed massive, unchecked federal power in the hands of a single, unaccountable Director,” said PHH.

The CFPB is structured so that the Director alone rules over large swaths of the field of consumer finance, subject to virtually no restraints from the representative branches: For example, Congress both strictly limited the President’s ability to remove the Director and surrendered its own power of the purse, allowing the Director to set his own budget and demand funds as he sees fit.

Thus, the Director runs a parallel government unto himself. He need not answer to Congress or the President. That structure cannot be reconciled with the Constitution’s dual promises of democratic government and separated powers.

PHH makes the argument that the very structure of the CFPB “is unlike any that the Supreme Court has ever condoned, in that the CFPB director serves a five-year term and cannot be removed by the president unless it is for cause.

PHH also cites that the term of CFPB Director Richard Cordray cannot be cut short if the President wants a replacement and that the term can “be extended indefinitely if the Senate does not confirm a replacement. The result hamstrings, and potentially eliminates altogether, the President’s influence over this powerful agency.

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Credit: Wikipedia, CFPB, HubPages.

With this argument, PHH states that the case for shutting down the agency is clear.

Severance of the CFPB Director’s removal restrictions is not an adequate or appropriate remedy because it would solve only one of the CFPB’s multiple structural problems while creating a new agency structure that Congress likely did not intend,” said PHH.

Moreover, unless this Court vacates the CFPB’s Order on some other ground without any remand, the separation-of-powers question cannot be avoided: There can be no remand to an unconstitutional agency.”

The CFPB and PHH are due back in court on May 24, 2017 for a full hearing.

The Manufactured Housing Industry Speaks

IDontThinkThereWasEverMuchHighCostLendingInTheManufacturedHousingMarket-stillcreditCSPAN2--RichardCordrayCFPBdirector-Posted-MHLivingNews-com-

Still from an Inside MH video, reflecting how Richard Cordray himself said that there was never much high cost lending in the manufactured housing industry market.

Daily Business News readers are no strangers to the ongoing saga of the CFPB and the Dodd-Frank Act, with extensive coverage of the impact on the manufactured housing industry.

This information also has indirect ramifications for the Manufactured Housing Institute (MHI), and others in the industry, as the Preserving Access bill is being floated, which would modify portions of Dodd-Frank.

For more on what the Preserving Access bill means for the industry, check out the latest article on The Masthead.

The full filing from PHH is linked here. ##

 

(Image credits are as shown above.)

 

rcwilliams-writer75x75manufacturedhousingindustrymhpronews

RC Williams, for Daily Business News, MHProNews.

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

Decisions in CFPB Appeal

February 8th, 2017 Comments off
DecisionsinCFPBAppealcreditHousingwireCFPB-postedtothedailybusinessnewsmhpronewsmhlivingnews

Credits: Housingwire, CFPB.

A major blow was delivered to those who were working to defend the Consumer Financial Protection Bureau (CFPB) last week, when a federal appeals court denied their motions.

According to Pay Before, the same three-judge panel of the U.S. Court of Appeals for the D.C. Circuit that determined the CFPB structure was unconstitutional in October 2016, denied appeals in the PHH Corp. vs. Consumer Financial Protection Bureau case.

In the decision, which was covered by the Daily Business News here, the court determined the CFPB is controlled by a “single, unaccountable, unchecked director, Richard Cordray, who can only be removed for just-cause, which poses the risk of arbitrary decision-making and abuse of power compared to a multimember independent agency.

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Senator Sherrod Brown. Official photo.

The circuit court ultimately ruled that the CFPB could continue operating, but that the director can now be replaced at will.

Recent motions filed by U.S. Senator Sherrod Brown (D-Ohio) and U.S. Rep. Maxine Waters (D-Calif.), argued that Congress wanted a single director for the agency, because lawmakers who drafted the Dodd-Frank Act, which established the CFPB, “understood that the nation needed a regulator that could respond quickly and effectively to new threats to consumers … and it knew that the CFPB’s effectiveness could be hampered by the delay and gridlock to which commissions are susceptible.

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Representative Maxine Waters. Credit: Wikipedia

Sixteen state attorney generals and the District of Columbia also filed a motion, defending the CFPB in its current incarnation.

As the representatives of millions of citizens across the country, the state attorneys general have used their express statutory authority to bring civil actions to enforce consumer financial protection laws and to pursue regulatory actions in coordination with the CFPB to protect consumers against unfair, deceptive and abusive financial practices,” the motion said.

The current ruling, if permitted to stand, will undermine the power of the state attorneys general to effectively protect consumers against abuse in the consumer finance industry.

Public interest groups, including the Americans for Financial Reform, Center for Responsible Lending, Leadership Conference on Civil and Human Rights, and Maeve Brown, chairperson of the CFPB’s consumer advisory board also filed a joint motion in support of the CFPB, which they decided to do after President Trump put the organization, and Dodd-Frank, in the crosshairs for major changes.

President Trump has voiced strong opposition to the Dodd-Frank reforms that created the CFPB,” according to the group’s motion.

IDontThinkThereWasEverMuchHighCostLendingInTheManufacturedHousingMarket-stillcreditCSPAN2--RichardCordrayCFPBdirector-Posted-MHLivingNews-com-

Still from an Inside MH video, reflecting how Richard Cordray himself said that there was never much high cost lending in the manufactured housing industry market. Click here or on the picture above for the full story.

President Trump started the process of dismantling Dodd-Frank in an executive order signed on February 3rd.

Following the court’s October panel decision that the CFPB structure is unconstitutional, the bureau filed a petition in November for a rehearing before the entire appellate court.

Had the circuit court granted the motions last week to intervene, the groups would have been able to submit briefs supporting the CFPB’s structure in the event of a rehearing of the case.

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President Barack Obama announces the nomination of Richard Cordray as the first director of the CFPB on July 18, 2011. Credit: Wikipedia.

According to one attorney, that would have been unprecedented.

In my entire career, I have never heard of someone trying to intervene at the Court of Appeals level related to a petition for rehearing,” said Alan S. Kaplinsky, partner, Ballard Spahr LLP.

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.

The Daily Business News will continue to follow developments around the CFPB and update this story as information becomes available. ##

(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.

Trump’s Regulation Cuts Could Have Major Impact on MH

January 23rd, 2017 Comments off
TrumpsRegulationCutsCouldHaveMajorImpactonMHcreditAmericaEnterpriseInstitute-postedtothedailybusinessnewsmhpronewsmhlivingnews

Credit: American Enterprise Institute.

Throughout the 2016 presidential campaign, Donald Trump was very clear on one thing he wanted to change – regulations.

President Trump talked about the Obama-era financial regulations, including Dodd-Frank, as “bad for business” and responsible for the nation’s slow growing economy.

 

For many, the President’s anti-regulatory stance is a welcome breath of fresh air.

According to Business Insider, the financial services industry is particularly excited, seeing the Trump victory as an early Christmas present.

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Octavio Marenzi. Credit: Optimas.

This isn’t going to necessarily translate into a golden age for banks, but it will be a normalization of the business environment. They’ve been battered by regulations and now we are finally going to see a more healthy environment,” said Octavio Marenzi, CEO of Opimas, a management consultancy firm focused on capital markets.

Our analysis shows that efforts to deregulate could redirect more than $25 billion in capital in the financial services industry over the course of the next 18-24 months,” said Opimas co-founder Medy Agami.

Areas in the analysis by Opimas that are of particular interest to the manufacture housing industry:

  • The roll back of Dodd-Frank and the elimination of the Consumer Financial Protection Bureau (CFPB).
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Credit: Plus 1 Properties, MHProNews.

The elimination of or serious reduction in CFPB regulations will mean a potential savings of nearly $1.4 billion for banks,” said Marenzi.

Additionally, Treasury Secretary nominee Steven Mnuchin has said that the new administration plans to “strip back parts of Dodd-Frank that prevent banks from lending.

As Daily Business News readers are aware, Republican Senators Bob Sasse (NE) and Mike Lee (UT) have called for the removal of CFPB director Richard Cordray, and Democratic lawmakers have called on the Trump Administration to keep Cordray and the agency in tact as is.

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Credit: Wikipedia, CFPB, HubPages.

A D.C. circuit court ruled last year that the CFPB was unconstitutional.

  • Repeal of the “Volcker Rule”

Enacted in 2013, the rule was designed to prevent future financial crises. Agami and Marenzi believe that the rule is the easiest to roll back, because all the President would essentially need to do is tell regulators to stop enforcing it.

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Medy Agami. Credit: Optimas.

The implications will be significant for large investment banks since dropping the rule would generate additional revenue and profitability streams,” said Agami.

There is also significant evidence that repealing The Volcker Rule will increase liquidity in various asset classes—fixed income, equities, commodities, foreign government debt, etc.—by enabling dealers to hold inventory that has long-term demand from clients that would otherwise not be allowed,” said Marenzi.

  • Reductions in capital and liquidity requirements
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A Clayton home in Chino Valley. Credit: Clayton Homes.

Originally put in place to prevent risky lending by financial institutions, Marenzi and Agami see significant reductions in the requirements freeing up money hoarded by banks.

It will free up nearly $20 billion in unproductive capital over the next 18-24 months that banks are hoarding and could redirect to other areas,” they said.

These regulations will be the most difficult to scale back since they are globally implemented and compelled banks to build myriad models and retain armies of risk and compliance teams.

Movement in these areas, combined with incoming Secretary of Housing and Urban Development (HUD) Dr. Ben Carson, could bode very well for the manufactured housing industry as regulations decrease and capital flows improve.

For more on Dodd-Frank, the CFPB and their impact on the manufactured housing 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.

Dem Senators Scramble to Save CFPB’s Cordray

January 18th, 2017 Comments off
IDontThinkThereWasEverMuchHighCostLendingInTheManufacturedHousingMarket-stillcreditCSPAN2--RichardCordrayCFPBdirector-Posted-MHLivingNews-com-

Still from an Inside MH video, reflecting how Richard Cordray himself said that there was never much high cost lending in the manufactured housing industry market.

Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB) is getting some help from Senate Democrats to save his job.

As the Daily Business News reported recently, Republican Senators Mike Lee (UT) and Bob Sasse (NE) sent a letter to Vice President-elect Mike Pence and President-elect Donald Trump, urging them to remove Cordray.

It’s time to fire King Richard,” said Sasse, who also serves as a member of the Senate Banking Committee.

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A tweet from Senator Bob Sasse.

Underneath the CFPB’s Orwellian acronym is an attack on the American idea that the people who write our laws are accountable to the American people. President-elect Trump has the authority to remove Mr. Cordray and that’s exactly what the American people deserve.

According to The Hill, Senate Democrats are asking Trump to do the opposite.

Senate Minority Leader Charles Schumer (N.Y.) and Senators Sherrod Brown (OH) and Elizabeth Warren (Mass.) defended CFPB Director Richard Cordray’s record, saying he should be allowed to finish his term as the bureau’s chief through July 2018.

They say removing Cordray would be an “extreme and unprecedented step.

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Senators Chuck Schumner (right) and Harry Reid. Credit: Politico.

Do not tell Richard Cordray he’s fired,” said Schumer.

Firing Cordray might be part of the billionaire agenda, but removing him and gutting the consumer bureau would shatter Trump’s promise,” said Brown, who is the ranking Democrat on the Senate Banking Committee.

Schumer, Brown and Warren also said they would help lead a national campaign to defend Cordray should Trump decide to fire him.

The CFPB was established as part of the Dodd-Frank Act as an independent agency. This technically means that President-elect Trump could only fire Cordray “for cause,” a rare step meant for serious abuses of power.

A U.S. Court of Appeals recently ruled the CFPB’s structure is unconstitutional.

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Credit: Wikipedia, CFPB, HubPages.

 

Under Rich Cordray, the CFPB is doing its job on behalf of the American people,” said Warren.

President-elect Trump is considering former House Representative Randy Neugebauer (R-Texas) to lead the agency as its sole director.

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Randy Neugebauer. Credit: Wikipedia.

Per The Hill, Neugebauer was one of several House Financial Services Committee members who opposed the CFPB’s power and structure.

Schumer believes that Neugebauer is a less than ideal choice.

It’s like putting the biggest arsonist that we know of in the firehouse,” said Schumer.

Neugebauer is responsible for a 2015 bill that would install a bipartisan commission to lead the CFPB instead of a sole director.

Republicans believe a bipartisan commission would rein in the agency and prevent it from stifling the economy with overbearing enforcement actions, while Democrats say the push for a commission would make the agency effectively powerless.

We know if there’s a commission, it simply won’t work,” said Brown. “The whole idea of the commission is to emasculate this agency and take away its power.

Senator Lee disagrees.

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Senator Mike Lee. Credit: AP.

The Constitution was written to protect the American people from unelected and unaccountable bureaucrats, said Lee. “Considering the damage CFPB has done to credit unions and community banks, President Trump should act quickly to remove the director.“ ##

 

(Editor’s Note: MHLivingNews has closely followed Director Cordray’s testimony, see the video linked here – his interesting statements on manufactured home loans.)

 

(Image credits are as shown above.)

 

rcwilliams-writer75x75manufacturedhousingindustrymhpronews

RC Williams, for Daily Business News, MHProNews.

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