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What is the latest on SAFE ACT, DODD-FRANK, CFPB (Consumer Finance Protection Bureau) and as an MHC owner, should I care?

February 8th, 2012 joe No comments
It has been over three years now since the passage of the SAFE Act federally which mandated that states pass similar legislation meeting the minimum standards outlined by the federal legislation. States were given one year to draft and pass their legislation. All states did pass legislation but several were notified by HUD (Housing and Urban Development) that their legislation did not meet the minimum standards or provided more latitude or exemptions than were provided in the federal law and as a result the states had to amend or change their laws accordingly. It is extremely important to note that the federal law established the minimum standards and a few states incorporated more stringent standards such as requiring lenders to have a physical presence in their states. Lenders and state regulators are still sorting out these issues.
 
To further complicate the matter, HUD’s rule was a proposed rule….meaning that upon further review and comment it could change or provide states with an interpretation different than the proposed rule. This created a great deal of confusion at the state enforcement level and many states took the position that there would be no enforcement of the SAFE Act until the final rule was issued.
 
On June 20, 2011 approximately 30 days before all enforcement of SAFE was to be turned over to the Consumer Finance Protection Bureau, HUD issued the final rule!
 
The final rule did provide additional clarity on issues on what can and what cannot be done without triggering actions requiring licensing under the SAFE Act. Let’s look at what we found out.
 
It appears that retailers and community owners have a little bit more flexibility in their “interaction” with the borrower so long as:
 
  • They do not hold themselves out as a loan originator.
  • Limit their actions regarding the loan transaction itself and
  • do not receive any compensation or gain as a result of the credit transaction.
  • They can transmit a completed credit application (completed by the borrower) to prospective lenders.
  • They can provide payment examples for prospective borrowers.
  • They can share or show the borrower rate sheets from multiple lenders.
  • They can assist the lender in closing the loan transaction by showing the borrowers where to sign and then sending loan documents back to lender.
  • They cannot negotiate rates and terms of the loan.
  • They cannot receive compensation related to the loan transaction.
  • They cannot complete the loan application for the customer.
  • They cannot hold themselves out as a loan originator unless they have the requisite MLO license.
 
The final rule made clear that the federal law does not provide for any kind of de minimus exemption but strangely left it open for states to determine what was habitual or repetitive. This seems contradictory at best but Industry Associations such as the WMA and CMHA are working diligently to get a favorable interpretation with state regulators.
 
So let’s bring this forward to where we are today. We have the final rule; states regulators are meeting by conference call regularly so there is consistent and uniform interpretation and enforcement; and the CFPB is now technically operational since Richard Cordray has been appointed via a controversial 'recess appointment' by President Obama to be the Directory of CFPB. What this all means is that states will begin enforcing if they have not started already; the CFPB is the ultimate regulator at the national level and will also begin audit and enforcement of non-depository finance related entities such as mortgage servicers, payday lenders, and manufactured housing lenders!
 
What does this mean for community owners who have been providing the capital to make loans for prospective residents to live in their communities? It means you have to be licensed as a lender and your sales people have to stay within the “lines” outlined above to avoid having to be licensed as a Mortgage Loan Originator.
 
Or…you should investigate and consider using a TPSP (Third Party Service Provider) who can do all of the lending functions (receive the application from the customer; underwrite the loan in accordance with federal requirements, document the loan file; prepare loan documents; fund the loan and provide loan servicing on a direct basis with the borrower).
 
San Antonio Credit Union (SACU) has such a program in place. There are certainly other firms you may wish to contact to see if they offer anything comparable and under what conditions. SACU has a compliance department that daily reviews regulations coming from Washington and determines the impact of those regulations on their lending business.
 
So we have SAFE Act in place, now being enforced…don’t ignore it and think you can “fly under the radar”…it is not worth the risk. Fines can be $25,000 per incident, which means for those doing a volume of business, x number of 'incidents' from the federal regulators perspective may put a company in a world of hurt or out of business.
 
Dodd-Frank, the massive financial reform legislation for the most part has not kicked in yet but now that the CFPB is up and running you can expect a flurry of activity and new regulations that will have a profound effect on the way we do business. We already know the crucial areas to be concerned with. It can make sense to partner with some firm who knows and can provide the assistance and programs needed to continue doing what you do best…developing and managing great communities and affordable housing and attractive lifestyles for your residents. # #
 
 
By Dick Ernst,
President of Financial Marketing Associates, Inc.
rdehome@aol.com, 972-503-3201, or cell 214-335-2708.
 

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Hall of Fame Announces 2012 Inductees

January 31st, 2012 joe No comments
The RV/MH Heritage Foundation recently announced the election of the 2012, 40th anniversary class into the RV/MH Hall of Fame. Inductees will be honored at an upcoming ceremony scheduled for August 6 in Elkhart.
 
Those to be honored include:
 
Michael R. Evans of Aberdeen, South Dakota, founder and developer of Centennial Homes, a housing retailer with locations in 3 states serving customers in 10 states providing affordable housing to over 12,000 families. He has served 20 years on the board of the South Dakota Housing Association.
 
Doug Gorman of Tulsa, Oklahoma. Founder and owner of Home-Mart. He was a charter member of the US Department of Housing and Urban Development Consensus Committee as the only housing retailer on the committee. He is Past-Chairman of the MHI Federated States Division representing retailers and community operators and has been recognized 9 times as MHI Retail Center of the Year.
 
Gerald “Jiggs” Meuret of Wausau, Wisconsin. While growing his company, Housing Mart of Wausau, he served 32 years on the board of directors of the Wisconsin Housing Alliance including terms as chairman in 81, 83-84, and in 1990. as the only 3 term chairman of his association, he developed such credibility that 100% of the producers in his state became members. He has been a firm advocate of customer service while providing thousands of families with homes.
 
Bob Olson of Forest City, Iowa, Chairman and CEO of Winnebago Industries, and veteran member of the RVIA Executive Committee and Co-Chairman of the highly successful Go RVing Coalition. He built his company’s reputation for commitment to service of both his dealers and his customers.
Stanley Sunshine of Atlanta, Georgia. As Chairman of Stag Parkway, he served on the board of the RV Aftermarket Association from 1991 to 1999 including as chairman in 98 and 99. He served on the RVIA board from 2003 to 2010. He is a long time champion of the RV Learning Center and promoting efficiency in the industry.
 
Mary Irene Younkin of Columbus, Ohio. A 60+ year veteran of the housing industry, she chaired the Ohio MHA convention for 12 years and has served the OHIO mha for over 30 years.. She founded Dycom Industries to develop housing communities and promote the use of fiber optics in Florida. Mrs Younkin joins her late husband and her son in the RV/MH Hall of Fame.
 
Mr. and Mrs. Nelson (deceased) Jackson of Myrtle Beach, South Carolina. Beginning in the early 1970s, the built Ocean Lakes Family RV Park into a community which now provides sites for 3449 RVs. They were recognized as national RV Park of the Year in 1997, 98, 99, 02, 03, 08 and 09. In 2005 they were honored by the South Carolina Governor for their efforts in promoting tourism in the state.
 
Edith Lane (deceased) of Deming, New Mexico. Founder, in 1969, and leader of the national Loaners on Wheels club for single RV travelers now having chapters throughout the US and in Canada. Developer of 3 RV Parks targeting single RVers and a longtime columnist on the RV lifestyle in national consumer magazines.
 
Ellwood A. Titcomb (deceased) of Lake Helen, Florida. As the President of Americorp he has, since the 1940s, pioneered the development of housing communities throughout the country. He pioneered “no steps” ground level home placement in communities in New England, California, and Florida.
 
Perry Yoder (deceased) of Middlebury, Indiana, He served the RV industry with 4 manufacturers and with L&W Engineering a component supplier. In 1975 he patented a slide-out mechanism for RVs. A long tome member of the IMHA-RVIC board he served as chairman of the Midwest RV Show committee.
 
Since its beginning in 1972, the hall of fame has honored more than 350 leaders of the recreational vehicle and manufactured housing with induction into the RV/MH Hall of Fame in recognition to their significant and lasting contributions to the greater good of their segment of the industries. The RV/MH Hall of Fame and its related archival library of literature and photographs and its museum of historic vehicles is housed in a 85,000 square foot facility along side Interstate 80/90 in Elkhart, Indiana. # #
 
Tom McNulty, RV/MH Hall of Fame. 574-293-2344 e-mail rvmhall@aol.com

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Electrifying Event!

January 20th, 2012 joe No comments

Wow! What a fantastic Louisville Manufactured Home Show! Since I had not been to the Louisville show in over a decade, I did not know what to expect in terms of attitude and atmosphere. If you were unable to attend, let me tell you that you missed a fantastic opportunity to network with some amazing and knowledgeable industry professionals. The excitement and optimism set the stage for an electrifying atmosphere. Whether your company is in retail, communities, manufacturing, finance, insurance, service or supply there were people, tools and resources available to help you succeed and grow. Various workshops, forums and seminars were conducted by some of the industry’s best and brightest.

 
Hopefully, a similar line up and opportunities will be available at the Tulsa and Tunica Shows in March.
 
My role as an industry observer that sought information for a doctoral dissertation enabled me to interact with professionals from different segments. As always, it was nice to see old friends from my own days in manufactured home retailing that have weathered the storm of the housing downturn. It was also an honor to meet and network with industry professionals that shared their knowledge and experience. Their presence is proof that companies have recognized the need for change and are proactively adapting to the market.
 
One of the common themes among show participants was the need to attract better quality buyers and develop strategies to compete with traditional site built homes.
 
The mindset seems to be shifting from targeting customers with marginal credit and limited choices to ones that can afford a traditional house, but who can be introduced to appreciate the value of a manufactured home. Of course, that is not suggesting that used homes or the 'traditional' manufactured home buyers have no place in the market because they certainly do! However, a long term plan must include a strategy for targeting prime customers as well as marginal customers.
 
The manufactured housing industry is consumer driven, meaning that consumer wants, needs, and ability to purchase are determining factors in strategic development. All of the segments of our industry exist to fulfill the housing needs of a customer.
 
One of the main disconnects in our outreach seems to be in the sales, marketing, delivery, and after sale communication strategies. According to Margarethe  Kusenbach's Salvaging Decency: Mobile Home Residents Strategies of Managing the Stigma of 'Trailer' Living published in Qualitative Sociology (2009), the negative stigmatization of living in a manufactured home influences a consumer’s buying decision. In order for the manufactured housing industry to flourish, the consumer perception of the product must change.
 
How is that accomplished? In part, by researching other industries to determine strategies that have been effective and implementing them to improve weaknesses. Although this requires changes at all levels, it can be done. Look no further than the motorcycle and RV industries for inspiration about how change in customer approach can change the perception. One approach I recommend exploring is the MH Alliance/Phoenix Project plan, that I reviewed last year.
 
A strategy that will not likely be effective is waiting for the government to step in and “save” the industry. Without going into a political tirade, the bottom line is that the manufactured housing industry does not have the resources to heavily influence legislation. This certainly effects financing options, especially with the lack of the secondary market. While the secondary market may be marginal to non-existent, the manufactured housing industry has something much more powerful – the PRODUCT! Industry professionals have shown their dedication and passion. Now is the time to get creative about competing with traditional housing.
 
As noted above and in my previous articles for MHProNews.com, I am currently working on my doctoral dissertation as a requirement for the PhD designation. A doctoral dissertation is a long, tedious journey that involves identifying a business problem and researching the background and possible solutions. With over a decade of experience in the manufactured housing industry, my biggest obstacle at this point is narrowing down the problems and focusing on a specific issue.
 
Among possible dissertation topics, obviously, consumer perception can be considered one of the most important issues to resolve. Another potential focus is customer relationship management. Are retail dealerships and manufacturers using effective strategies to overcome and change consumer perceptions? Are some traditional marketing and sales approaches outdated? Would after sale communication help resolve the stigmatization and improve referral rates? Does the HUD code enable financial institutions to discriminate against manufactured housing? Any feedback and suggestions for a doctoral dissertation would be most appreciated. Please email me at lisa.tyler@waldenu.edu with any comments.
 
The 2012 Louisville MH Show was a positive – even electrifying – experience. Many I spoke with are already planning to attend next year's event. Will you be there? # #
 
Lisa Tyler
Walden University
 
 

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This makes my blood boil…

January 14th, 2012 joe 1 comment

… about the USFA's (United States Fire Administration) "fact sheet" about "manufactured housing."

Stuff like this makes my blood boil and I had to respond thusly, please see below.

I will let you know if they respond to me.

Ken Haynes, Jr.

(Editor's note: Ken was very kind to share this with our readers. This is a copy of the information he sent to the USFA. Frankly, we need more actions like this by industry pros from coast to coast. If every time a government agency, private firm or media misstated facts about manufactured or modular homes, an Industry pro would speak out, we would over time have fewer such errors and over time we would sell more homes too. Let us hereby thank Ken and encourage you and others to do the same.)

Thank you for submitting the following to USFA.

Comment for:

Dear USFA,

I just read your flyer titled, "Live Safely in Your Manufactured Home, A Fact sheet on Manufactured Home Safety."

You should be ashamed of yourselves publishing such drivel without explaining the differences between "mobile homes" constructed prior to the implementation of the Federal Manufactured Housing Construction and Safety Standards Act (HUD Code) developed and enforced by the Department of Housing and Urban Development (HUD), and "manufactured homes" constructed to the specifications of the HUD Code.

The information you have provided in the publication is inaccurate, misleading and slanderous. You have lumped together two completely different types of affordable housing. To make an analogy that you might understand, comparing it to the automotive industry, you are saying that the safety of a Ford Model A is in the same category as a 2011 Ford Fusion because they are both motor vehicles with four tires and a steering wheel.

The truth is that fire frequency and death rates of manufactured homes built to the HUD Code is comparable and even less than site built homes, yet your publication makes absolutely no reference to this fact.

You obviously have no idea of what you are talking about, grouping all factory built housing in the same category.

Are you purposely trying to kill the manufactured housing business with false claims put forth in publications such as this? It seems to me that you are.

In my opinion, this is just another effort to foster the notion that manufactured homes should be forced to have fire sprinklers, but that site built homes should not be forced to have fire sprinklers, thus promoting an unfair and costly expense to manufactured housing, diminishing their popularity and giving an unfair advantage to site-built home builders.

This form should be withdrawn and corrected immediately, a retraction issued, and an apology issued to the manufactured housing industry.

Sincerely,

Ken Haynes Jr

401 Shatto Dr

Carlisle, PA 17013

717-258-3799

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MHI and it’s varied divisions as compared to MHARR

December 14th, 2011 Soheyla Kovach No comments

Over the last several years trial balloons have been released suggesting that the industry’s best interests would be served by a merger of its two major trade organizations the Manufactured Housing Institute (MHI) and the Manufactured Housing Association for Regulatory Reform (MHARR). MHI serves as a trade organization for all of the major segments of the industry. Those segments (manufacturers, suppliers, communities, retailers and lenders) are represented within MHI by their own specialized division. In contrast, MHARR makes their position absolutely clear that their mission is to protect specifically manufacturers from an over reaching federal bureaucracy in the area of regulatory issues.

My position has been consistent over that same time frame that a merger of MHI and MHARR would not be a good idea for the industry. On a couple of occasions that position was incorrectly interpreted as criticism of MHI. My point instead has been that because of MHI’s role of being an overall industry trade (manufacturers, suppliers, communities, retailers and lenders) organization, taking a very aggressive role in the area of regulatory reform can be a difficult role to fill. On the other hand, MHARR makes no apologies for its repeated efforts to rein in a federal agency that is continuing to take positions and implement new regulations that will have significant cost impacts on our product with unsubstantiated benefits. As the chief executive of MHARR, Danny Ghorbani has been relentless in pursuing that mission. While he would like to be able to operate in concert with HUD, the federal agency that oversees our industry, he is not concerned about remaining pals with HUD if HUD is not functioning within the bounds of current statues.

Recently a proposal has been floated for communities to form their own organization to the point of eliminating MHI. A review of MHI’s current action list should provide a reasonably quick conclusion that one would have little confidence in the ability of a newly formed communities trade organization to accomplish even a fraction of the items on the list absent MHI. Communities (and retailers) should feel free to establish a separate trade organization if they desire to see more focus on the needs of their segment of the industry. That representation can be organized and still lend a voice to the overall trade organization as needed. As a retailer I certainly feel at times that MHI’s role is dominated by the interests of manufacturers. My solution, if so motivated, would be to establish a retail equivalent of MHARR. A retail trade organization that would then be focused on issues facing retailers. I believe that could be possible without establishing a goal of destroying MHI.

While I am not in favor of dismantling MHI, I will concede that I disagree strongly with MHI’s recent capitulation in regard to the preemption of fire sprinklers as they relate to the HUD Code and the activities and positions of the Manufactured Housing Consensus Committee. MHARR’s position was statutorily correct and should have been backed by MHI rather than be undermined. Over a period of twenty years or so of my relationship with MHI, this issue does not mark my first disagreement with them and I have certainly never called for their dissolution due to any of those disagreements. MHI has the capacity and the history to be a very effective voice for the industry. We should work within the organization to address those areas where we disagree.

Douglas Gorman

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Congressman Joe Donnelly Statement for the Record Field Hearing: “The State of Manufactured Housing”

November 29th, 2011 Soheyla Kovach 2 comments

 

Congressman Joe Donnelly credit wikimedia commons posted on MHProNews.com Industry Voices Guest Blog I am pleased that the Insurance, Housing and Community Opportunity Subcommittee is having this field hearing today.  Manufactured housing plays a vital role in meeting the housing needs of the nation by providing quality, affordable homes to over 18 million people.  This $8 billion a year industry has long been a major economic driver in places like Elkhart County, Indiana by directly employing thousands in manufactured housing plants and thousands more in suppliers’ factories, not to mention contributing to the local municipal tax base. 

 

 

I appreciate the hard work the industry has done for communities across our country and particularly in areas like Northern Indiana, which I am proud to represent.  This industry knows all too well the pain felt by this economic crisis.  The last couple of years have not been easy, and the suppliers, manufacturers and dealers have been patient and worked hard to continue to make quality homes and keep hardworking Americans employed so they can provide for their families. 

 

As we work to emerge from this housing crisis, we realize that now, more than ever, it is important that people have access to quality homes that they can afford.  As millions of Americans are facing or on the brink of foreclosure, we must recognize the value and cost-effectiveness that these homes provide.  Manufactured housing should be considered a critical solution to helping us emerge from this housing crisis. 

 

 

Creating affordable homeownership is one of the fundamental building blocks of our society and plays a fundamental role in achieving the American Dream.  It helps to provide families with economic security and build strong communities.  I hope today is an opportunity to highlight this industry’s important contributions and identify how Congress can ensure it remains a thriving and successful job-creator in America and a source to meet our current and future housing needs. # #

 

 

Congressman Joe Donnelly

 

Media contact: 

Elizabeth Shappell

Communications Director

Congressman Joe Donnelly (IN-02)

1530 Longworth House Office Building

T: (202) 225-3915

F: (202) 225-6798

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Response On a Bold Proposal for Moving MHI, MHARR and Manufactured Housing Ahead

November 21st, 2011 Soheyla Kovach No comments

 

One of the proposals being run up the flag pole is to merge MHI and MHARR with Danny Ghorbani to run the areas that are related to manufacturing and with George Allen running the areas related to communities. One obvious omission here is retail – not to mention lending, suppliers and other Industry elements at the Manufactured Housing Institute (MHI) – but the proposal has other issues that would suggest against implementation of such a concept.
 
 
Danny Ghorbani is imminently qualified to serve in a role overseeing the manufacturing issues within MHI. From Danny's point of view though, how long would he function before a clash in organizational culture styles might force him out the door?
 
 
Danny is fiercely defensive of issues that negatively affect his organization's members. Many of those members are small or even single plant operations that rightly or wrongly feel they do not have a sufficient voice in MHI. That perception is the reason MHARR was formed. Without some strong reassurances that small manufacturers will gain confidence regarding their voice and that Danny could not summarily be dismissed after the dismantling of the Manufactured Housing Association for Regulatory Reform (MHARR), I do not see a merger having success.
 
 
The merger idea has been floated before and gained little traction. I have spent approximately ten years working with both MHI and MHARR through my role on the Manufactured Housing Consensus Committee (MHCC). The two organizations functioned very well together in that regulatory environment, but Danny has been free to take up potentially controversial issues that MHI has been able to avoid.
 
 
I have pointed out previously that MHI, by its nature is a trade association that represents the entire industry. By that very nature, it serves in an umbrella or big tent role and all participants may not support an aggressive stance against actions taken by the Federal Government that impact our industry.
 
 
From the perspective of a medium or small manufacturer a significant concern would be to make sure Danny was mentoring a replacement as he gets closer to a time he may choose to retire.
 
 
Recent defensive stances taken by Danny include opposition to unwarranted increased regulatory monitoring activities (implemented by HUD) by the PIAs, exposure of inaccurate fire safety reports by NFPA, and presenting strong arguments for repositioning 3285 installation regulations into 3280 standards to allow for pre-emption of installation guidelines. Would Danny have been free to raise and argue these issues (just to name a few) as an employee of MHI?
 
 
The two individuals suggested certainly have the qualifications to share running a newly configured MHI. But:
 
  • Could MHARR member manufacturers have confidence in such a proposed restructure?
  • Could retailers and others have confidence in a proposed restructure where they are not even mentioned?
 
 
As a manufacturer, I would want to have a membership in both MHI and MHARR. I would look to MHI to continue to serve in the broad role as the industry's trade organization. I would look to MHARR to continue to monitor government actions that are an overreach with negative impacts on affordability for our customer base. # #
 
 
by Doug Gorman,
MH Retailer
HomeMart

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An MH Industry Turn Around Plan, Part II

November 16th, 2011 joe No comments

An MH Industry Turn Around Plan, Part II

 
In my previous article, I explored the potential benefits of an alliance that included not only industry players, but the involvement of the end user – the homeowner. Regardless of the geographical location and cultural differences in this country, affordable housing is a necessity. Whether a consumer is interested in purchasing a manufactured home on land or renting a site (and/or home) in a manufactured home land-lease community, the end result is the same; occupancy of a manufactured home.
 
Like an uncoordinated kid who accepts being chosen last for a sports team, the manufactured housing industry has all too often settled for being considered the less than optimal choice for consumers. At some point, that uncoordinated kid is going to learn the rules, receive instruction from coaches, gain support from teammates, and develops the skills and passion for success at the game. This hypothetical player is going to seek any available resources – from physical fitness and honing skills to setting personal goals and overcoming obstacles – in order to improve positioning. Obviously, the kid is not on this journey alone – coaches, teammates, parents, and fans play an integral role in turning the “last choice” into the first round pick.
 
In a similar manner, the MH Alliance is taking a holistic approach to providing solutions to the manufactured housing industry. One of the biggest hurdles is gaining support from all industry players. The MH Industry is highly segmented – manufacturing, retail, communities, suppliers, finance and insurance, government entities, etc – all hold separate paradigms. More time may be spent by some blaming the other segments for the industry downturn than is spent pulling together and taking action to reverse the trend. The concept of working together to identify and implement sustainable solutions may thus be overshadowed by the reluctance to change and move beyond one's comfort zone.
 
Sports teams recognize that the weakest link can be transformed into the strongest point through the right drills and effort. Therefore, the team takes a holistic approach by identifying specific problem areas and identifying solutions to increase the level of strength by improving the weakest link. The team members recognize each individual’s contribution and the value that it adds to the team’s performance. The MH Alliance is a collective venue that gives balanced value to every player on the team. The strategy is based on breaking down the walls of segmentation to form a team with a unified approach to problem solving. The only “favored children” ought to be the consumers – the manufactured home owners! – of the Industry's products and services.
 
Using a systematic approach, problems are identified and a collaborative effort is used to develop strategies and solutions. The MH Alliance can benefit manufacturers by distinguishing them as a valid and credible source of a much needed product. Quality control issues have been hammered in the media and public opinion. Industry professionals are well aware that manufacturers are held accountable for quality standards. However, the general public – POTENTIAL CUSTOMERS – are not privy to the same information. Consumer awareness and education is a necessary component for image change, yet the current individualized strategies are all too often ineffective. A more unified effort therefor is a must.
 
Information about manufactured homes are usually gleaned from internet searches or a visit to a retail sales center. Manufacturer participation would be linked to current homeowners through the MH Alliance. Not only would the linkage provide access to potential consumers, it would also improve accountability and provide transparency.
 
Manufactured home land-lease communities, MH Retailers and others would also benefit from the Alliance. Let's look at a quick example.
 
Unemployment, foreclosure, and divorce rates are at all time highs in this country. The commonality between the three is that the actions produce a greater need for affordable homes and rental units. Part of the consumer’s resistance to MH Communities (MHC) is the negative stigmatization that is derived from a lack of consistency among owners or managers. One MHC may require yard maintenance requirements and a neat home site with enforced rules while the other allows a goat to eat the grass or you can see barking dog chained to the steps or a tree. The carrot of access to marketing dollars can be a tool for the MH Alliance to involve community owners and encouraging a set of standards will move the choice far beyond the “trailer park” and “mobile home” mentality. Furthermore, by targeting and driving 1-2 star customers to 1-2 star locations, and driving 4-5 star prospects to 4-5 star locations, consumers will find the 'right lifestyle choice' for their needs, wants and budgets.
 
The same can be done with “street retailers” sales centers. We have all seen the state of the art sales centers with HUD Code and modular homes that look like or are ground set, with great landscaping, furnishings, etc. Such 4-5 star retailers should be the ones to see the 4-5 star customers. Those retailers who have 1-2 star locations will have the 1-2 star clientele driven to their sales centers.
In marketing, one goal is always to match the right product and service with the right buyer. One of the good points that the MH Alliance plan offers is that it will avoid marketing disconnects. This will result in more closed business.
 
A key point to remember is the MH Alliance is more than just marketing or image building. So while this article has focused on that aspect, it is important to remember that issues such as better exit strategies for lenders and home owners, improved financing and much more are a part of the mix. Perhaps we can look at those aspects in a future column. # #
 
Links to comments from Industry Professionals who have participated in an MH Alliance/Phoenix Project GoToMeeting small group webinar.
 
 
(Editor’s Note: All links in this article and some edits were provided by MHProNews.com for context to Ms. Tyler’s article. It is good to recall that Ms. Tyler's perspective includes years of MH Retailing and MH home ownership.)
Lisa Tyler, MBA
Marketing Instructor
Walden University
Planning a doctoral dissertation on manufactured home marketing and image.

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Dick Moore’s Industry and Finance Perspective

November 16th, 2011 joe 2 comments

 

Dick Moore's Industry and Finance Perspective
 
Well, it seems that I struck a nerve with our friend up East. He mostly disappeared for a couple of years, quit writing his newsletter, and went dormant. I figured maybe his conscience was bothering him, after the spin he put on our industry.
 
Now I see a new post from our buddy in “Industry Voices,” the guest platform on Tony Kovach’s e-zine MHMSM NewsLine (MHMSM.com = MHProNews.com), wherein he goes on and on about me in a general mis-representation of my writings. I certainly never opinioned that he had powers akin to Superman. He did, however, invent some mystical losses derived by using losses from Brigadier, Conseco, and other lenders who did not know or understand how to buy MH paper. He then reported those loss figures to Fannie Mae & Freddie Mac, keeping them out of the (Manufactured Housing) markets.
 
This lack of competition had a negative impact on the other lenders that were still major players in our industry.
 
He admitted to me in Louisville one year that he was an “attorney” and was being “paid” by Fannie to advise them. He later denied all that, but everyone knows the credibility of lawyers and politicians. After all, who else gets “paid to have an opinion”?
 
My ex-neighbor was a college professor who taught business
administration at Memphis State University. After listening to his
many goofy ideas and theories, I realized the source of the old adage “If you can’t do it, teach it.” If you were a failure in the finance business, then go out and advise others how to do it!
 
The Mortgage Industry produced paper much worse than the MH
industry ever dreamed of, and that was the paper that our friend
advised Fannie to buy (instead of MH paper). Fannie’s losses are the worst losses the United States has ever endured, and it continues still. (How good was that advice?)
 
It is easy to measure or analyze a situation the way you
want it to look – just choose the measuring criteria needed
to give you the end result you want and ignore any thing
that doesn’t.
 
The MH Industry (its survivors) remains the only low-cost housing that is un-subsidized. Just because less qualified people enter the business and lose money from their poor business decisions does not equate to a ‘subsidy.’ Maybe our friend does not know or understand what a subsidy is. He sounds like Obama explaining the debt ceiling and how someone else created it.
 
I’m sure there will be another argumentative letter, but I have work to do and do not have the time to continue with fruitless exercises in writing.
 
********
 
This industry and its recourse lenders fared well and made good money from the 50’s to the 90’s, with no taxpayer subsidies.
 
This industry faces a number of problems, with the main one being lack of financing. The lenders and the learned professors of the industry like to blame the dealer for all the woes. True, we have had some bad apples in our business, just like every other industry. But the level of damage from that kind of dealer falls way short of the debacle we as an industry are paying for now.
 
One major issue our industry faces concerns resale values of our houses, which directly affects the lender’s recovery on defaulted loans. We as dealers have very little influence in that arena.
 
Many MH Communities will not accept houses over 10 years old; lenders will not finance homes over 10 years old. Somehow, when the house hits its 10th birthday, it suddenly is worth ZERO!?!?! And this is the dealer’s fault?!?!
 
When free enterprise existed in this country and banks lent money to their dealers with recourse, our industry performed well! Lenders were selective about who they would take on (based on the dealer’s financial condition and track record in the community), the dealers would take care of their funding pipeline by not sending them dead-beats (since the
dealer would have to repurchase if the loan fell out), and the dealers were paid endorsement fees for this guaranty. The dealers worked to re-sell the bank’s repos with good unpaid balances, and the paper overall performed quite well. It was that performance that led to the influx of the non-recourse lenders that we saw in the 90’s.
 
Long-gone lenders such as Bombardier, Conseco, Greenpoint Credit, BAHS, et al, saw the performance of recourse lenders’ portfolios, due to good resale values on houses sold under recourse agreements, and made the mental jump to they can do that too! Soon tactics such as withholding of proceeds and diverting rate spread and the odd-days’ interest into non-interest bearing reserve accounts became the norm from the lenders, at the expense of their MH dealer network.
 
In their headlong rush for gold, they also opened the funding gates to credit buyers who (like in today’s meltdown) had NO reason in their track records to get approved for loans at low rates and low down payments.
 
So, they kept the endorsement fees, put that rate spread into a reserve account for repossessions, and bought non-recourse.
 
Their inability to manage the repos, refurb and re-sell them (as the recourse lender/dealer relationships had done) created massive losses for them. Again, I fail to understand how this is the dealer’s fault.
 
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President Obama is railing against corporate jets, while flying around on the most expensive jet in the world. The tax deductions on all the corporate jets in the US would not pay for Air Force One. Is this leading by example or “Do as I say, not as I do?”
 
Good leaders lead by example. They don’t accept favors from lobbyists and major contributors to their re-election campaigns, and they don’t spend the taxpayers’ money recklessly.
 
The crash of the housing/mortgage industry was caused by Fannie Mae and Freddie Mac, which is govt. money invested into private enterprise, wherein all the profits go to the cronies of powerful govt. people, but the risks and losses go to the taxpayers. # #
 
post submitted by
R. C. “Dick” Moore

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Open letter to Association Executives on: State Association Dialogue Regarding “STEPS”

November 2nd, 2011 Soheyla Kovach No comments

Dear State Association Executives:

We’ve been closely following your email discussion regarding the regulation of outside steps, including, particularly, the issue of federal versus state/local authority, questions concerning federal preemption and the possibility of approaching the MHCC with a proposal.

Unfortunately, this problem goes back to an issue raised by MHARR, some 8 years ago, when the federal installation standards (24 C.F.R. 3285) were first proposed by HUD and debated by the MHCC.  HUD has taken the position, based on an indefensible “interpretation” of the 2000 law, that installation is not part of “construction” and that only the Part 3280 construction and safety standards are preemptive – meaning that the Part 3285 installation standards are not preemptive.  MHARR (without help from others in the industry), vigorously opposed – and continues to oppose — this “re-codification” of installation, as is more fully explained in Fact Sheet No. 8 of the MHARR Fact Sheets regarding HUD’s failure to implement key 2000 law reforms that we sent to you on September 14, 2011.

The bottom line, for now, is that the Part 3285 installation standards, as construed by HUD, remain non-preemptive.  So, even if steps were part of the 3285 installation standards, or were made part of the installation standards, the federal step standard would still not be preemptive of state and/or local requirements.  Worse yet, because the MHCC only has statutory authority over “construction and safety” standards, HUD’s codification of the installation standards outside of the Part 3280 construction and safety standards, at a minimum, makes it doubtful whether the MHCC could even consider a proposal to amend the Part 3285 installation standards to include steps (and would create an endlessly muddled legal no-man’s land, if it did).

MHARR has been warning, ever since the installation standards were re-codified outside of Part 3280, that HUD’s baseless distinction between installation and construction would come back to haunt the industry and consumers in the form of inconsistent and needlessly costly state and local requirements.  And what you’re seeing here is likely just the tip of the iceberg, as we also noted that the full impact of all this would not begin to be felt until the federal installation program was fully implemented. Unfortunately, this is just one simple illustration from among the ten key reforms of the 2000 law (see your MHARR Fact Sheet packet), designed to complete the transformation of manufactured homes from the trailers of yesteryear to the modern legitimate housing of today, that HUD has refused to fully and properly implement – reforms that were designed to help the industry and its consumers that have been languishing at HUD for over ten years because of a lack of pressure from the entire industry.

Thanks,

Mark Weiss
Senior Vice President
Manufactured Housing Association for Regulatory Reform (MHARR)

cc: HUD Code Retailers and Communities

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