MHI 2013 Annual Meeting Recap

October 10th, 2013 No comments

IMHA Executive Director Mark Bowersox attended the Manufactured Housing Institute’s (MHI) annual meeting held September 28 – October 1 in Carlsbad, CA. As with most recent industry meetings, speakers and conversations at the event were focused on the impact of the Dodd-Frank consumer protection legislation and reforming the CFPB’s upcoming regulations. MHI and other industry representatives continue to work with the CFBP on three key areas:

Exemption for manufactured housing appraisal requirements

Based on the most recent rules issued by the CFPB loans on all new manufactured homes, regardless of whether or not they included land, are exempt from the appraisal requirement. Loans on existing manufactured homes, not including land, are also exempt from the appraisal requirements. Additionally, all mobile homes (pre-HUD code) home loans are exempt. The CFPB’s rule solidifying these exemptions is still pending. When finalized the rule will go into effect in January.

Key rule clarifications and exclusions

Loan originator compensation guidelines issued by the CFPB this summer provide the industry with key exclusions from the points and fees calculation that lenders must perform and clarifies certain activities that retail sales staff can engage in without being defined as loan originators.

Manufactured home sales price is excluded from the points and fees definition and does not have to be included in calculations performed by lenders unless a creditor has knowledge that the sales price includes compensation for loan origination activities.

 

Retail sales commissions paid to employees is excluded from points and fees calculation requirements unless the salesperson is receiving compensation from a lender for loan origination activities.

According to MHI, activities that do not classify a retailer or its sales personnel as loan originators include:

  • Providing or making available general information about creditors and loan originators that may offer financing for manufactured housing
  • Gathering or collecting supporting information or documentation on behalf of a consumer for inclusion in a credit application
  • Providing general credit application instructions so that a consumer can complete it themselves
  • Financing the sale of no more than three homes in a year.

Activities that will make a retail employee be considered a loan originator include:

  • Filling out a credit application for a customer
  • Discussing particular credit terms with a customer
  • Directing or influencing a customer to select a particular lender or creditor

MHI continues to seek from the CFPB to provide further clarification on what activities retailers can engage in without being defined as loan originators.

MHI is still working with the CFPB and various consumer interest groups on the need to revise the upcoming High Cost Mortgage Loan triggers for manufactured home loans. IMHA will continue to be engaged on this issue, along with MHI and other interested parties. ##

mark-bowersox-imha-posted-industry-voices-guest-blog-mhpronews.com-75x75pxl-.pngMark Bowersox
Executive Director
Indiana Manufactured Housing Association
Recreation Vehicle Indiana Council
3210 Rand Road
Indianapolis, IN  46241

(Editor's Note: You can find more info on the LO Comp Rule and HOEPA from DJ Pendelton's article published in the Industry In Focus Reports module, linked here.

 

You can also find Mark Bowersox's “It's Now or Never” featured article, linked here. )

Most Manufactured Home Lenders Facing Major Changes Revenue Cliff for Some; Business As Usual for Others

October 10th, 2013 No comments

Wall Street calls this a “revenue cliff.” A sudden drop in cash flow. Dodd-Frank regulations that are set to take effect in mid-January 2014 will result in major changes in guidelines for most of our industry’s major Manufactured Home (MH) personal property lenders.

Among the non-captive lenders, the hardest hit will likely be 21st Mortgage Corp. This lender is expecting a decline of up to 47% in loan volume.

MH Retailers who rely on 21st Mortgage should brace for a sudden revenue loss of 50% – 75% including overall loan volume and an adjustment in origination fees.

This will be devastating for many.

An informal survey of our four credit facilities who primarily bankroll the MH chattel financing aide of the MH industry has revealed major changes expected by most, and business as usual for one lender.

Our lender headquartered in San Antonio, CU Factory Built, is at present reviewing their loan products and origination fee policies. Committees have been assembled, reviewing the new regulations and their guidelines.

Informed industry sources tell MHProNews, who advised us, that CU’s very popular “Step Rate” loan product will likely remain intact, surviving the new regulations.

However, this lender’s origination fee schedule could be cut by up to 50%, more closely resembling the origination fee guidelines of their competitor, Triad Financial Services. The final outcome is yet to be determined.

Thus MH reatailers and loan officers who rely upon CU as their primary lender need to brace for a “revenue cliff.”

Our office has learned that Triad, based in Jacksonville, FL, is expecting “business as usual.” Apparently their loan products and origination fee guidelines have been in compliance with the expected changes in regulations.

Our industry’s other major lender, US Bank, with their regional office based in San Diego, is being very tight-lipped about any changes. Their spokesperson recently declined to comment to us.

The anticipated changes in loan products and origination fees will impact everyone in the MH industry. As loan brokers, quite a few of our employees will be devastated.

Analyzing the changes at this juncture is like shooting a bullet at a speeding train. The best advice we can give you is to dig in and redouble your efforts in support of HR 1779 and related.

If each of us contacts our Congressional Representative and two U.S. Senators in favor of HR 1779 and its planned companion bill, there is still time to avoid this fiscal/financial cliff our retailers and communities who sell are heading towards. ##

dave-shanklin-mhmsm-com.jpegDave Shanklin
Loan Consultant
Empire Homes, Inc.
Santa Rosa, CA
800 – 401 – 3372
NMLS ID # 314463

(Editor's Note: All views expressed on MHProNews are those of the author, and may or may not represent those of publisher or our sponsors. We recommend that you contact the representatives of the lenders you work with and see for yourself what they expect. Take Action! You may also find this related article of interest.)

Congratulations to All Who Made it Happen

September 28th, 2013 No comments

Tony,

Congratulations on the celebration of MHMSM’s 4th year anniversary! What a tremendous contribution you have all made in such a sort amount of time to the image and promotion of manufacturing housing. 

My involvement with the Louisville Show has allowed me to appreciate the invaluable promotional and marketing assistance MHMSM/MHProNews.com has provided in the successful resurgence of the Show.

Now as the premiere media outlet for our industry, I greatly anticipate promotional and marketing efforts in the next 4 years for you and your team beyond any of our expectations.

And, on a personal note, it is a pleasure to work and talk with one of the finest and most personable leaders in our industry.

tim-williams-ohio-manufactured-home-associatio-mhpronewsTim Williams
Executive Director
Ohio Manufactured Homes Association (OMHA)
5640 Frantz RoadDublin, Ohio 43017

Manufactured Housing Institute and Consumer Groups Urge CFPB to Change Loan Originator Guidelines; Support Builds for H.R. 1779

September 15th, 2013 No comments

In a communiqué to MHProNews, MHI's Vice President of Regulatory Affairs, Jason Boehlert shared the following report to Industry members.

MHI and Consumer Groups Partner to Revise CFPB Rules

On September 5th, MHI joined with a coalition of consumer advocacy organizations, including the Center for Responsible Lending (CRL), Corporation for Enterprise Development (CFED) and National Consumer Law Center (NCLC), to jointly urge the Consumer Financial Protection Bureau (CFPB) to amend key mortgage finance rules and preserve access to credit in the manufactured housing market.

Since May, key MHI members and staff have been working with representatives of these three consumer groups to develop a compromise on rules related to loan originator compensation and classification, and HOEPA High-Cost Mortgage triggers – issues that are addressed in the Preserving Access to Manufactured Housing Act (H.R. 1779).

manufactured-housing-institute-logo-posted-mhpronews-industry-voices=guest=blog

Negotiations have been taking place through the assistance and participation of majority and minority staff of the House Financial Services Committee and Senator Sherrod Brown, who serves as Chairman of the Senate Banking Subcommittee on Financial Institutions and Consumer Credit.

As a result of the negotiations, MHI and the three consumer organizations have agreed to jointly ask the CFPB to clarify and amend its rules in two key areas:

Loan Originator Compensation — for purposes of classifying a manufactured home retail salesperson as a Loan Originator, urge the CFPB to better clarify that as long as no incentive is provided or offered by the retailer or the lender to the individual salesperson to steer the consumer to a certain lender or loan product, then the salesperson should not be considered a Loan Originator.

While the CFPB has issued recent rules removing the manufactured home sales price and any sales commission paid to a sales person from points and fees calculations, an individual salesperson can still be classified as a Loan Originator by performing certain activities (i.e., taking an application, and referring a consumer to a lender). This activity would then classify the retailer as a mortgage broker. Both designations carry significant requirements and liabilities, most notably supervision by the CFPB.

HOEPA High-Cost Mortgage Triggers — consumer organizations have agreed to join with MHI in urging the CFPB to reopen its previous final rule on HOEPA. As a result of the significant dialogue that has taken place between the two sides, the consumer organizations have agreed that a significant reduction in access to credit would result in January 2014 (when the rule goes into effect) for the manufactured housing market unless the CFPB modifies the High-Cost Mortgage triggers. While the two sides have not agreed to a specific number, the willingness of the groups to push for the CFPB to reconsider their prior rulemaking is significant.

MHI and the consumer organizations will continue to meet with the CFPB on a joint basis in September on HOEPA issues. Pursuing a strategy of engagement with consumer groups provides the industry the opportunity to underscore the broad impact of CFPB rulemaking on consumers and the industry. In addition, it will provide a more rapid resolution of the industry’s concern when compared to a potentially protracted legislative battle over reopening the Dodd-Frank Act.

However, it is important to note that as the industry gains ground with the CFPB and the consumer groups, Congressional support for the H.R. 1779 continues to build.

Co-Sponsors to H.R. 1779 Grow

During the month-long Congressional recess, more than 20 U.S. Representatives added their names as co-sponsors to H.R. 1779. Currently, nearly 70 Representatives have co-sponsored the measure and support continues to grow. MHI thanks its members and the national network of state associations for their hard work in urging Representatives to co-sponsor this important legislation (to view a current list of co-sponsors, click here).

As has been previously mentioned, provisions of H.R. 1779 were included in GSE reform legislation (PATH Act; H.R. 2767) that was approved by the House Financial Services Committee and MHI staff continues to work with committee staff to seek an opportunity to move the legislation separately.

While the CFPB has provided some key relief in recent rulemakings to the manufactured housing industry – with respect to appraisals and the calculations of points and fees – work still remains to be done to amend HOEPA triggers and the Loan Originator definition to better represent the needs of the manufactured housing market. Absent regulatory relief, statutory change is necessary.

The industry is asked to continue its outreach efforts to U.S. Representatives. Urge them to co-sponsor H.R. 1779. For more information, click here to access MHI’s action alert. ##

jason-boehlert-mhi-manufactuired-housing-pro=news-.pngJason Boehlert
Manufactured Housing Institute (MHI)
Vice President of Government Affairs
1655 North Fort Meyer Drive
Suite 104
Arlington, VA 22209

MHI members can contact Jason Boehlert at jboehlert@mfghome.org or (703) 558-0660.

(Logo image credits to their respective organizations. Photo credit of Jason Boehlert, MHProNews.com)

(Editor's Note:  Consumer groups did NOT in fact get on board for HR 1779, as we editorially observed in this blog post here.) 

Investing in the Future of Manufactured Housing

September 8th, 2013 No comments

Tony, 

That was sort of a long read but was worth the time. I agree for the most part.

We are an industry that for years has desired the best for our industry representatives, our customers and our distribution system but for all these years have been hesitant to:

  • invest financially in training our people,

  • marketing our product's image,

  • updating our technology,

  • improving our delivery system, etc..

     

Manufacturers and Retailers have made some bold attempts at the previously listed task but always fail to follow through because they don’t see immediate profits from marketing or training programs. 

We are an industry that has the need for all of our profits to be immediate. Future growth and maturation always loses out to the need for immediate results and immediate profits. 

Until we are willing to train our people well, invest in technology, invest in customer service, invest $ in creating a brand image with the understanding that is will cost a percentage of our industry profits and will not necessarily produce immediate results we are doomed to keep repeating our same mistakes over and over.

Thank You,

 

jay-hamiltong-executive-director-georgia-manufactured-housing-association-gmha-posted-mhpronews-comC. Jay Hamilton

Executive Director

Georgia Manufactured Housing Association

(Editor's Note1: The article Jay refers to is linked here, but his remarks clearly have a broader viewpoint as well.

Editor Note2: To fully appreciate what Jay is saying, for those who don't know him well, let's share the following from his Linkedin Profile:

Employed: 18 years as a District Sales Manager, Product Specialist, Account Manager and Regional Sales Manager for Fleetwood Homes, one of America's Largest Home Builders and makers of Class (A) Recreational Vehicle Products…

Specialties: My specialties include growing and maintaining sales territories, developing professional business relationships for the Manufactured Housing Industry with Banks, Vendors, Developers, Government Agencies and Professional Associations. Building the Manufactured Housing Industry Brand Image in Georgia.”) 

(Editor's Note3: The Industry Voices guest blog is for all industry members and investors, from any size company or organization.  You are routinely invited to sound off on topics related to issues that impact factory built housing.  A variety of viewpoints are welcome.  You can email your letter to the editor or OpEd column to this email link, with the words Industry Voices in the subject line. There are no word limits.  Editorial Guidelines are found here).

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Rent Control in MHCs

September 4th, 2013 1 comment

Tony,

The phone rang one morning and a young man returned my call to him, we'd been playing phone tag. I had left a message with his wife in Oregon earlier, and he was calling about two Vermont MH communities I have listed for sale. From the voice of each, I guessed they were both far younger than I.

Speaking with him, as I answered his questions, it was obvious this was not his first call on LLCs for sale. In a knowledgeable way he wound thru the obvious questions, finally asking whether Vermont LLCs are rent controlled. Yes, I explained, they are. I went on to explain Vermont allows CPI, about 3% annually presently, without concern, and a big one, allows provable capital improvements in addition, annually. I told him that as a former VT LLC owner I had found the scheme fully workable, as do many of my contemporaries.

The next day I got an email message saying he and his partner/wife had decided not to invest in any locale where rent control is in force. OK, I get it, but that removes quite a swath of locales, many which are hot purchase markets. This philosophy allows investment in say Mississippi or Alabama, but negates purchases in Florida or much of California. Oh…

After that, my mind wondered over my experiences of the dangers of rent control and lack of it. Yes, I said the danger of the lack of it. I actually was pretty young once, had hundreds of apartments and almost 2000 MH/RV sites. With the exception of a Florida LLC, I was in no jurisdiction where rent control was in effect. And when rent control was threatened in a jurisdiction, I was the first to the battlements opposing its imposition. I was and am a capitalist, and rent control seemed an anathema to my beliefs. I'm not alone, right?

But time went by, slowly the days passed, and some of my beliefs at 40 years of age made transition to a more measured understanding as I aged and acquired experience I previously lacked. Let me be frank, I was an accomplished and notorious rent increaser, which in my twilight years brings me no acclaim by others, and more importantly, myself.

What I found was that in apartments, and we're not speaking of New York City here, the market rents in an area kinda act as rent control. You find yourself as the top dog in rent rate for your 1000 sq. ft three bedroom apartment in your area. What you are very likely to find, as I did, your apartment rents last and less, staying empty longer than it should. Recovering the lost time and money brings you back to Earth and unless your calqy is busted, your late debt payments slap Hai Karate hard. I found apartments very self correcting as to rents.

Now, on to LLCs. We all know the reasons we invest in communities; they own the dwelling unit, they can't move the house, etc. All good stuff, of course. So as I bought LLCs from original owner/developers, I found that as longtime owners they had allowed their rents to slip behind the market, keeping their management easy, with many long term residents.

Of course, the purchase price always reflected the oft unspoken premium of raising rents to market. "Hell, they can pay a lot more than that!" So I paid more than cash flow to get the community, not real unusual, right? Then the rent increases started. Often stiff and early increases happened shortly after closing.

The first few increases were swallowed, albeit with plenty of bitching by residents. We raised rents as much in two-three years as the former owner did in 10 years. Note that in some instances the increased rent still didn't pay for the capitalized investment costs. I knew that, they only knew and cared their rent had doubled in short order. No esoteric explanations of cap rates and other MH investor jargon seemed particularly persuasive to the LLC residents.

Who was it, Newton, who theorized every action has an equal and opposite reaction? I raised rents, they moved out. And I acquired a reputation in that community as a rapacious rent increaser. And these reputations are hard to escape. I wouldn't really care that much except the reputation had a very bad impact on homesite rentals. That, I did care about.

At first I did the calculation I see many others doing. Yah, I had 100 homes at $100 per month, and even though I'm quickly down to 90 homes at $111 per month, hey, I'm getting the same money with less work and expenses. And it keeps going this way as rents increase, residents fleeing like a torrent, out the MH Paradise Estates gates, which has turned into Hell Bent Acres.  And as vacancies mount, you lose control of the community, no longer able to count on the desire to live in your LLC to keep people in line. And that desire includes pricing.

Were I the only one to have followed the raise-rents protocols, then only I would have suffered the residue, but of course, such was not the case. The MH industry's then flawed model, subsidized for years by flawed lenders, finally collapsed, dropping from 373,000 shipments in 1998, then tantalizing us into believing the hurricane-inspired 135,000 shipments of the mid 2000s was the stopping point, to the grim reality of 50,000 homes in the 2010s. Yah, I hear 60,000 homes could happen any day now.

I sat in on some very contentious MHI committees in the late 2000s era trying to formulate a chattel long term lease the GSEs could swallow. In concert with this I reviewed many LLC profiles showing monthly rent and occupancy. It probably won't surprise you that the vacancy was truly scary, yet rents occurred steeply and frequently.  I had already tried that, and even with the generous retail financing by GreenTree, CIT, The Associates, Security Pacific, Chase and their ilk, it didn't work. Now we were dealing with the GSEs, who I did not find stupid, and we were trying to equate rents in LLCs to the capitalized valuation of single family conventional real estate lots. Any thought of sharply limiting rent increases to gain long term and low rate financing being the trade-off, got serious push back. Such was not to be and by then as the effort lost all bouyancy, the GSEs woke up to far bigger challenges.

As a post script I am the very first to admit that some major figures in that committee have since come far closer to the rent restraints advocated in the long term lease effort as their stated belief for industry resuscitation.  Will that be enough? I greatly doubt it, but I sure think it is an indisputable industry wide measure in the road back to something other than Warren Buffett's table scraps.

So to my young friend in Oregon, rent control, other then confiscatory NYC apartments or some California cities in MH, can be a useful LLC owner restraint, quieting some of the early animal spirits we can all exhibit before experience shackles us. Did I like going to the rent hearings in my community in Florida and taking phallus down the throat to the gag control center? Oh, I loved it.

Still, Florida LLCs are and have long been highly prized acquisitions, not greatly injured by the relatively manageable process for raising rents.  With the relatively benign rent control such as in Florida and Vermont, you and the industry are actually protected from many of the practices employed in the industry, leading to so much push back against us.

Before you believe I'm asking you to petition your jurisdiction for rent control, let me disabuse of that notion. Nothing could be further from the truth. I rail against governmental intrusion in to my affairs daily. Everyday the beast grows larger, only a financial collapse likely to abort its growth. The only point I am making is that one must practice rental increase restraint on your own. Sometimes laws can help a process.

The flip side is that lack of restraint causes lack of residents at a time LLC vacancy nationwide forebodes another step down in industry size. In places like Vermont and Florida and others, rent control, which one should practice on their own, is instilled by statute. Perhaps not the best solution, but the record says the world did not end there.

Yes, we tell a great story which seemingly has legs of truth about our affordable housing heritage. But for whatever reason, even though its great dog food, the dogs won't eat it. Perhaps a legacy of rapacious rent increases, closing parks, high default rates and high home value depreciation could be a good place to start the industry resurgence. We build great homes, but my friends, that, by itself is not enough. ##

marty-lavin-posted-on-mhpronews(MARTIN V. LAVIN
attorney, consultant & expert witness
350 Main Street Suite 100
BURLINGTON, VERMONT 05401-3413

802-660-8888 off / 802-238-7777 cell
marty@martylavin.com

(Editor's note: The hot link was added by us, not Marty, nor was the link requested in any way by Marty. We think it is good for others to realize that while Marty is 'retired,' he is still involved in this industry and clearly cares about manufactured housing deeply. That is why he sounds off on issues, because he cares enough to raise them for discussion, thought and action.

As always, letters and articles by you or your colleagues that may agree or take other perspectives are encouraged. Send them to latonyk@gmail.com with Industry Voices Guest Column in the subject line. )

Act Today to Preserve Manufactured Housing Lending!

September 4th, 2013 No comments

Our congressional delegation will be heading back to Washington DC soon after being in their districts for most of August. If you haven’t already done so, please contact your elected Representative today about the harmful impact new financial regulations will have when they go into effect.

The primary focus of our industry nationwide is to remove harmful provisions in federal financing and consumer protection law that are set to begin in mid-January.

One of the primary issues is the fact that industry lenders could be held responsible for the discussions and actions of salespeople on retail lots and in communities.

The other issue is government restrictions on how high interest rates can be for home loans. Manufactured housing loans are usually lower balances and shorter terms than site-built housing which causes the rate caps to be restrictive.

Some manufactured housing lenders are considering exiting the business if these provisions are allowed to take effect and this clearly is something the industry cannot afford.

The industry is attempting to amend these harmful regulations out of federal law before they go into effect in January. HR 1779, the “Preserving Access to Manufactured Housing Act” was introduced in the United States House of Representatives and currently has more than 60 co-sponsors. The Manufactured Housing Institute estimates we need about 120 co-sponsors nationally in order to move this legislation.

We need your help!

So far, two of Indiana’s nine Representatives have signed on as co-sponsors of this legislation – Congressman Marlin Stutzman and Congresswoman Jackie Walorski – and we need more support.

The current House recess is a good opportunity to contact your elected Representative to discuss the legislation is critical to Indiana jobs, our industry and your business. Get with your state association and/or MHI to see what are the best wasy that you can team up with others to move this into a win column for our industry. ##

mark-bowersox-indiana-manufactured-housing-association-rvic-posted-mhpronews-com75x75-Mark Bowersox
Executive Director
Indiana Manufactured Housing Association – Recreation Vehicle Indiana Council
 

Captive Finance Redux: Are you dealing with the Gestapo/NSA or Colonel Klink?

August 21st, 2013 No comments

Tony,
I've been delighted with the self-financing articles and feedback you have gotten on the subject. I've never doubted self-finance can be done properly, but that said, I don't think most can or will do it properly. Instead I believed the industry would often take the course many are revealing in your discussions; non-compliance, "I'll take my chances."

Interesting, but hardly surprising.

As I've written in the past, the various recent lending laws, federal and state, will and are having a demonstrable effect on the industry, likely to put the finishing touches on what little remains of the industry, reducing it even further.

Does this mean total death? Oh, I doubt that. Remember companies still sell buggy whips, not many, but they are still sold. As long as the industry continues to put people in homes who are not good at putting themselves in homes, a segment will remain. As will homes going on to owned land by those who trotted down to their friendly Hometown Bank, sat with their hard working banker and earned a loan for a HUD going onto their land.

Not many homes you say? Well, yes I agree with that. But some will still sell. Captive Finance will do some, but risky, unprotected self-financing will sell most homes. Is it illegal to speed? Yes, if you get caught. Obviously the same holds true for non-compliant lending.

There are few if any reports of originators of non-compliant loans being called to the gallows, or of loans declared invalid, (big deal in an industry with innumerable invalid loans), but, and this is the big one, still few if any reports of fines and crowbar motel residency. I suspect until the crowbar alternative becomes far more common, as with your various admitters, non-compliance will grow and perhaps even prosper. This leaves open whether in 1935 Berlin, oops, 2013 America, the Gestapo/NSA is checking the papers, or like Sgt Schultz, will see nothing. So far, they see nothing.

I have no doubt many of these offensive laws were carefully crafted to include MH, which leaves the futility of trying to change these laws to not include us as somewhat pathetic, but as an industry we still seek the get-out-of-jail card, which is in the deck right beside Marvin Place. These are both hard to get, kiddes.

So's, we's takes our chances, the "buyer" gets his desired home, the retailer/park owner gets a down-payment, resident, a stream of income and everyone lives happily after, until "innocent buyer" defaults and Illegal Aid gets involved, and reports the non-compliance to the massive Inadequate Buyer Protective Society. Then, the soggy brown stuff could hit the fan with the strong arm of The Man going full force against TrailerBoy. Ouch!

Can or will that happen? Well, yes it can, but will it? My 40 year experience with destructive retailer fraud on buyers was that it was little noticed by the authorities, it had to be BIG.

It remains to be seen whether we now will be dealing with Col. Klink or Buford T. Justice on non-compliance with this panoply of laws. For the sake of the MH self-admitted "misdirected," lets hope Klinky is still doing reruns and too busy to notice the industry's escape attempts.

But if it turns out these Alphabet Laws are actually enforced by Henrich Himmler's heirs, I'm not sure it is wise to be "non-compliant." Sometimes you have to admit the cards dealt are a very bad hand. It seems that way for MH and the spate of new lending laws.

I know one park owner who simply rents the home to the buyer for three years or until early default, which ever comes first. Once the buyer demonstrates a pattern of payments, he conveys the home, takes a promissory note not secured by the home, and hasn't found a big difference over his past experience with home sale with mortgage, etc. But he sleeps well knowing he might get his azz rumpled by the  borrower in this process, (so what is new?) but says at least at night he can sleep without the overhang of Att'y Gen Eric Holder visiting him for non-compliance.

Holder can bring those Philly Bad Guys from the voting place with their iron pipes to assure compliance. There is a true, Ouch! ##

marty-lavin-posted-on-mhpronews(2).jpgMARTIN V. (Marty) LAVIN
attorney, consultant & expert witness
Practice only in factory built housing
350 Main Street  Suite 100
BURLINGTON, VT 05401-3413
802-238-7777 cell  802-660-8888 office
Forget what people are saying, especially politicians. Instead, watch what is happening.” – Marty Lavin

 

Editor's Note: Marty's column is in response to these keenly read, linked articles:

Publisher Tony Kovach will plan a comment on this topic on the Masthead blog, to be published later on 8.21.2013

The Lack of Sales Training in the Manufactured Housing Industry

August 20th, 2013 No comments

Tony, in your LinkedIn Discussion, you asked the question, “Are manufactured housing pros today truly 'trained' to sell new MHs?

Unfortunately, the answer is (for the most part), “No.”

When the tidal wave of a slowing economy, a major downturn in housing starts, an skyrocketing number of foreclosures and lower site-built mortgage interest rates hit, we saw the biggest sales collapse that I can remember in over 20 years in and around the industry.

It's sad, but when most companies experience lower sales, the FIRST thing that goes are the things they list as "nice to have" items, like training.

Great companies invest in MORE training during economic downturns, to ensure that they have the best chance of selling to every Client that walks through the door. IBM is a great example of this.

The training that DOES occur is typically in-house training, where companies are most likely to become myopic in their view of the industry. And, when this happens they revert to teaching the things that worked in the past, which they find aren't effective in TODAY's market; which also reinforces the idea that “training doesn’t help.”

This is a HUGE problem, because today’s market is dramatically different than the industry of yesteryear.

Today:

OVER 90% OF ALL HOME-BUYERS (Including Manufactured Housing Clients) DO THE MAJORITY OF THEIR SHOPPING ON THE WEB! 

And virtually 100% of the BEST BUYERS shop via the Web.

Most dealers don't seem to be aware of this – or if they ARE – they don’t know how to use the Internet to attract the attention of the best buyers.

If they don't have a compelling marketing message – if their website and associated social media sites aren't professional and appealing – then potential Clients see that dealership as amateurish, and never "convert" (that is, click through and ask to be contacted by a salesperson), much less visit that sales center.

When a good buyer DOES contact a dealership, the sales professionals have to know how to use multiple modes of communication to engage that Client.

They have to be professional, credible, and competent on the phone; with email; and with social media to create a "three-dimensional" relationship with the customer.

When the Client believes they've found a credible company, sales professional, and the right home, THEN they will come to the sales center to COMPLETE the purchase process. This means that sales and marketing are now a combined effort and that…

THE SALES PROCESS HAS CHANGED IN A MAJOR WAY!

Whether the industry wants to believe it or not, this has become a Web-Driven market, and sales professionals have to be good at using the tools and techniques that work in this new environment.

Training that addresses these and many other changes in our marketplace is virtually non-existent; and most of the training that IS available is dated and out of step with today's market.

In addition, most manufacturers and/or dealers are exceedingly reluctant to invest in training.

The manufacturers that have big backlogs believe that if they build a better, cheaper product, that they will ALWAYS have a big backlog.

Those that DON'T have big backlogs think that PRODUCT is the answer – not training.

They believe the problem is that they haven't found the winning combination of features, benefits, and price point. Therefore their efforts and money are invested in product development, not sales force development.

They don't understand how important it is to invest in Web-based marketing and associated training.

The net result of this is that many existing retailers will suffer and die on the vine, and new ones will come and go. And, when the next big downturn hits the industry, manufacturers and retailers alike will be poorly-prepared to deal with it, because they will not have invested in the single most powerful marketing and sales tools in existence:

  • A strong digital media marketing presence
  • And great sales training to build the skills needed to bring great prospects in off the Web; and then to convert the sale, once they have the Client on-site.

I love this industry! It provides housing for a socio-economic group that will always need affordable, good quality, energy-efficient, attractive housing.

But the industry continues doing the same things it's always done – even though the market has changed in a dramatic way.

There was a good book written by Spencer Johnson in 1998, "Who moved my cheese…" The theme of the book (a shifting marketplace) strikes at the heart of the manufactured housing industry today.

My greatest hope is that a few manufacturers & dealerships will recognize the need for major change, and will invest in both Web-based marketing AND in modern, market-relevant sales training; both of which would help the industry increase its share of the housing market. ##

jim-carpenter-posted-manufactured-home-professional-news-mhpronews-com-75x75-.jpgJim Carpenter,
The Carpenter Consulting Group,
previously with Oakcreek Homes

Location, Location, Location . . . version 2013

August 9th, 2013 No comments

During my years with Mr. (Dick) Moore, we have had numerous discussions concerning the ‘ingredients’ for a successful sales center. Throughout those many talks, a factor repeatedly mentioned is, as they say in the retail game, “Location, Location, Location.” The value of an attractive sales center with good-looking homes to tour cannot be understated. It is as important today as 25+ years ago, possibly even more so.

“Location” in the world of 2013 can have an entirely different meaning than in the 80’s and 90’s.

Our two sales centers in the Memphis/Mid-South region feature road frontage on major thoroughfares, with high traffic counts every day. But our most important ‘road frontage’ in this day’s operations has to be our display/sales center on the Information Superhighway!

We have all heard about the increasing importance of the Internet in selling our homes. Just how important that digital presence might be can be under-estimated by someone not familiar with today’s online shoppers.

Please allow me to share a tale of two houses “A Tale of Two Houses” with you. As you may know, Tunica MS is very near Memphis. At this year’s show, we bought one of the display houses (with all the Tunica Show décor) from one of our manufacturers. The house is beautiful! We brought it to our Millington sales center and set it up, dressed to the nines with the show décor.

The company that handles our web-site activity for us came and took pictures and video of the home. On April 29, while we were in Davenport, IA attending a meeting, we posted the house “live” with full streaming video to our website.

We have implemented a policy of full pricing on the site for our homes. There are a lot of opinions about that concept, and I’m not going to get into that discussion here. BUT, if I may continue with my Tale….

At approximately 10.30 am on Monday, April 29, the Tunica Show house went live on our site. Wednesday morning, May 1, as we were driving back toward Memphis, I got a call from my sales center manager Michelle Chessor, who began the call with “Bob, remember how you say it’s easier to ask forgiveness than get permission?” With bated breath, I said, “Yes, Why?”

Michelle proceeded to tell me about the previous 24 hours of texts and emails concerning the Tunica Show house! Seems that a couple were looking at that posting on our site on Monday, the 29th, and the wife called Michelle on Tuesday to say “I’ll take it at the price you have shown.” Wow!

Tuesday, April 30, was full of texts and emails between our prospect and Michelle, until around 8.30 pm that evening. Michelle left the e-conversation with the prospect confirming that she would send her daughter over to our center (about 45 miles away) on Wednesday morning with a check to take the house off the market. At that point, Michelle told me she still thought that it was a ‘maybe.’

So why was the forgiveness needed? Wednesday morning, May 1, the daughter didn’t show up – the entire family came in to look at the home! During the in-person tour, the husband decided that the living room in the Tunica Show house wasn’t as big as he wanted.

But what’s the forgiveness for? Michelle switched the prospect from the new house to another (older) lot model that the husband really liked, and also spec’d out a RSO unit to the same people! One house advertised on the web, two houses sold off it within 48 hours!

We are pleased to see that the results of the web-site advertising seem to be sustaining. Since May 1, 10 of the 13 new-house deals closed have originated from the web! And here’s the kicker: The invoice of every one of these houses has been more than the average sales price of the previous 12 months!

We have experienced 10-minute cash sales from the web, customers coming in with their first question “Where is the house that I saw on your website?” and even a contact from Virginia Beach inquiring about a buy-for house for the parents, who live in north Mississippi. That one hasn’t gelled yet, but we do have an email reply stating intent for the daughter and her brother to fly down in the near future to meet with our sales center manager.

BTW, all of our web-site efforts are an out-growth of the seminar that Tony Kovach and his associate Bob put on in Louisville in 2011.  Our web advertising firm was just getting up and running on our gig about then, and I invited them to come to Louisville to hear that presentation.

Does this mean that we will continue like this? Who knows? But we’re going to do every thing we can to keep our ‘road frontage’ as pretty and shiny as possible! I would recommend that all retailers seriously consider doing the same. ##

Submitted by:
R.E. Crawford, President
Dick Moore, Inc.,
Millington TN