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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)