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Posts Tagged ‘secondary mortgage market’

Doug Ryan: Expand the Lending Opportunities for MH Buyers

February 23rd, 2016 Comments off

manuf home royal homes of raleigh nc creditManufactured housing (MH) is an inexpensive path to the American Dream of homeownership, said Doug Ryan, Director of Affordable Homeownership at the Corporation for Enterprise Development (CFED).  But he claims there is a lack of competition among the few MH lenders that exist—a market dominated by Clayton Homes, which builds, markets – and through related firms – finances MH.  Thus it does not have to rely on a secondary market.  According to Ryan, that vertically integrated operation makes the path to more ownership of quality affordable manufactured homes more difficult.

In an op-ed in American Banker, Time to End the Monopoly over Manufactured Housing, Ryan says the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac should participate more in buying chattel loans. That might happen, due to a proposal from the Federal Housing Finance Agency (FHFA) that the GSEs would get credit for “duty to serve” underserved housing markets, like making loans to MH secured by real estate.

While not including chattel or “personal property” (home only) loans, the proposal advocated by CFED and others includes a move that encourages states to change their titling laws to recognize MH as real estate. If titling reform did go through, they claim, it would open the field up to more lenders, and present more competition for Clayton and their affiliated lenders.  

The move to magically dub “home only” loans as “real estate” is opposed by MH lenders and by third party MH financing experts, such as Marty Lavin, JD, because it is too costly and burdensome for lenders in practice.  Lavin and others assert that would drive out more manufactured home lending, rather than create more of it.

While Freddie Mac has recently made loans to acquire manufactured home communities (MHCs), as MHProNews  has previously reported, an additional part of the proposal would require the largest GSE mortgage companies to finance the purchase of MHs as chattel loans, which Ryan says would begin the development of a secondary mortgage market for MH.

Ryan said Clayton finances homes through lenders owned by parent company Berkshire Hathaway, and has no need for Fannie and Freddie. Ryan claims the industry’s largest national trade association, the Manufactured Housing Institute (MHI), and Clayton both oppose the inclusion of chattel loans in the rule.  This, asserts Ryan, prevents owners of manufactured homes on leased land from building equity.

What Ryan fails to mention is that MHI and the Manufactured Housing Association for Regulatory Reform (MHARR) are both working to get chattel lending included by FHFA’s Duty to Serve (DTS) instructions to the GSEs. CFED’s point man on manufactured housing also fails to mention that his organization has admitted to what is a conflict of interest on issues relating to the CFPB and MH lending.

Ryan also fails to mention that federal regulations have driven out personal property lending that previously existed for manufactured homes, so the very policies CFED advocates for would actually make MH lending even tougher.

Clayton Homes/Berkshire Hathaway have been hammered repeatedly by slanted and misleading by theSeattle Times/BuzzFeed  advocacy journalism “reports” charging discrimination, predatory lending, exploiting and even “threatening” borrowers.  Ryan and his allies – such as Ishbel Dicken’s led National Manufactured Home Owners of America (NMHOA) – have promoted such negative media, in an effort to undermine the progress made on passage of the Preserving Access to Manufactured Housing Act (HR 650/S 682).

MHLivingNews  has outlined many of the issues relating to mistaken points made by Doug Ryan and others in a video and related article, found here. The video quotes CFPB’s Richard Cordray, HUD’s Julian Castro and Senator Bob Corker speaking on MH as an affordable housing solution, highlighting facts on MH lending that Ryan glosses over or blatantly ignores.

MHProNews has two upcoming video reports that will shed additional light on financing and quality affordable living issues that Ryan, Seattle Times, PBS NewsHour and those in league with CFED ignore. Marty Lavin’s in depth discussion on this topic, is linked here.  

Ryan’s Op-Ed, says MHProNews publisher L. A. ‘Tony’ Kovach, “badly misses the mark on the reality of manufactured home lending; whatever his intentions or motivations, Doug Ryan has proven that he doesn’t know what he’s talking about, as he essentially admitted in an interview with Jan Hollingsworth, that MH finance expert Dick Ernst is better informed on these topics,” found in an in-depth report linked here.

2014gao-report-comparing-manufactured-housing-vs-apartments-posted-mhpronews-com-

The full GAO report on Manufactured Housing is linked from the image above or can be downloaded here.

Kovach reminds Daily Business News readers that Ryan has never denied any of the facts in reports MHLivingNews or MHProNews have published, and says if Ryan was correct and confident in his stance on these MH lending issues, he’d take up the offer to debate him and Ishbel Dickens.

Kovach commends Ryan to the extent that on paper, he and CFED are pro-MH as an affordable housing solution, while pointing out that sadly the policies Ryan and his associates advocate for via their media efforts are actually harming manufactured home owners, lenders and businesses. “The GAO’s report on manufactured housing has already documented, as have one of the GSEs’ own reports, that even with somewhat higher interest rates, MH is the lowest cost and the lowest monthly payment of any form of housing,” Kovach stated. “Modern manufactured homes are the solution to the affordable home crisis, and the path to more lending is found by allowing the free market to work and not be impeded by federal regulations and well meaning, but misguided policy advocates.” ##

(Image credit: Royal Homes of Raleigh)

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

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)

Housing Market Improves; Policy Challenges Await

August 13th, 2013 Comments off

Housing affordability slipped nationwide as home prices in recovering markets rose during the second quarter, according to the National Association of Home Builders (NAHB) Wells Fargo Housing Opportunity Index (HOI). Of all new and existing homes sold in the first quarter of 2013, 73.7 percent were affordable to families earning the U. S. median income of $64,400. In the second quarter that ended in June, 2013, that number had dropped to 69.3 percent, as MHPronews has learned. Says NAHB Chief Economist David Crowe, “Rising home prices signal the improving health in housing markets, and the median price of all new and existing U.S. homes sold in this year’s second quarter, at $202,000, was well ahead of the second quarter 2012 median price of $185,000. Together with rising mortgage rates, this contributed to affordability slipping to the lowest level in more than four years. Such movement would be less concerning were it not for ongoing discussions regarding potential changes to the mortgage interest deduction and federal support for the secondary mortgage market, both of which play enormous roles in keeping homeownership affordable.”

(Photo credit: Paul Sakuma/Associated Press)

Hearings Held on Housing Finance Reform

March 29th, 2013 Comments off

The Manufactured Housing Institute (MHI) informs MHProNews hearings were held March 19 by both the House and the Senate on housing finance reform. Texas Chairman of the House Financial Services Committee Jeb Hensarling stated he wants to abolish Freddie Mae and Freddie Mac and privatize the secondary mortgage market. Acting director of the Federal Housing Finance Agency (FHFA) Edward DeMarco testified at the House hearing the housing recovery is gaining strength, and noted the joint securitization platform that will be used by Fannie and Freddie. South Dakota Chairman of the Senate Banking Committee Tim Johnson expressed concern that privatizing the mortgage market will put homeownership out of the reach of many Americans. Two of the three witnesses at the Senate hearing say the federal government needs to provide a backstop for the GSE market in the future. MHI will continue to monitor Congressional activities to determine their impact on the manufactured and modular housing industry.

(Photo credit: Wikipedia–U. S. Capitol floor)

Credit Unions Testify at Senate Banking Hearing

March 6th, 2012 Comments off

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

(Photo credit: Wikipedia)

G-Fee Increase Dropped

February 21st, 2012 Comments off

Congress passed a $150 billion bill that extends the payroll tax reduction and unemployment benefits for ten months without increasing the guarantee fees (g-fees) on Fannie Mae and Freddie Mac. Consideration was at first given to raising the fees as a means to pay for the extension but then dropped. In December Congress passed a ten basis point hike in g-fees to cover the cost of a two-month extension of benefits, and this increase in bps is permanent. As a result, Fannie and Freddie will pass that expense on and it will increase what borrowers pay. NationalMortgageNews tells MHProNews.com mortgage trade groups have told Congress they would like to use the fees to increase the liquidity of the secondary mortgage market, but oppose using g-fees to fund other government programs.

(Photo credit: moneycontrol)