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Posts Tagged ‘Indiana’

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. )

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
 

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

November 29th, 2011 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

Voices from Louisville, January 2011

January 24th, 2011 No comments

The refrain of an old American folk song ends with, “Eight more miles to Louisville, the hometown of my heart.” It may or may not have been the hometown of anyone at the 2011 Louisville Manufactured Housing Show, but by all accounts it seems to have warmed the hearts of many in the industry who attended. Following the lackluster show of 2009 when much of the space was filled with empty chairs in the middle of the cavernous Exposition Hall, and the total absence of a show last year, nearly one thousand people braved the unseasonably cold temperature and snow for this year’s 2½ day event, January 12-14. Twenty-seven homes graced the exhibition, including three FEMA homes, and over 80 exhibitors displayed their wares.

In an interview, Bob Thieman, Jr., Executive Director of the Illinois Manufactured Housing Association for ten years, said:  “We have to educate the end users, the consumers, on how well these homes are made. We also have to educate the value of affordable housing to legislators so they quit trying to legislate us out of existence. This ‘not in my back yard’ mentality that local officials have… that’s got to go, that’s garbage.” Thieman sees a major shift in the buying habits of the Baby Boomers:  “Out in rural areas you may continue to see a manufactured or modular home with another one or two; but in urban areas, you will start to see more upscale communities of retirees.” He also noted the upswing in the economy:  “This has been a successful show. Many of the vendors say they are having less down time recently, and all the manufacturers I spoke with see signs of a year better than two years ago. It will come in steps, not in leaps and bounds.” In emphasizing the importance of services in support of the industry, he added, “In Illinois, we offered a show on finance that was one of the most successful programs we have ever done, because people are hungry for information, good quality information.”

Craig Claxton of Fortune Homes wrote in an email: “…the last few shows were poorly attended and worse yet, the overall attitude from many attendees was of ‘gloom and doom’.  But a surge in business in 2010 helped open the door for show attendance.” He noted that many retailers came by, primarily to check out the new product. “As a manufacturer, it is obvious that you better offer 90% of the spectrum to retailers. You need an entry level HUD product, a mid-range HUD product, an entry level MOD product, and a mid-range MOD product. If you concentrate on those four areas, and offer product “flexibility,” you are ahead of the game… The 2011 Louisville Show was a good show, and we made a lot of new contacts in areas we do not currently have representation,” said Claxton.

Mike Fahlbeck, President of Mobile Tire & Axle, Inc. of Nappanee, IN, rated it a positive show. “Our business is geared to the production of manufactured houses, and what we have heard from manufacturers is they anticipate a year better than last,” said Fahlbeck. “That’s good news.”

by Matthew J. Silver

Ken Rishel report on the Manufactured Housing Roundtable

June 3rd, 2010 No comments

Precision Capital Funding logoMr. Rishel attended the June 2 Manufactured Housing Roundtable in Elkhart, Indiana regarding FHA Title I and Title II lending. It was a national
meeting hosted by Congressman Joe Donnelly from Indiana, MHI, and MHARR.
Every affected government agency was represented by their top people.
Attendees also included the top people from national industry lenders, the
owners of various manufacturers, industry consultants, and major community
owners Mr. Rishel will cover this meeting in his upcoming June newsletter.
Below, you will find the letter he wrote to Congressman Donnelly as a
result of this meeting.
submittd by Juline Anderson at CaptiveFinance.net


The Hon Joe Donnelly
207 West Colfax Avenue
South Bend, IN 46601

Dear Mr. Donnelly:

I first want to thank you for the time and attention you have given to the issues of the manufactured housing industry and for the time you put into the meeting at Elkhart, Indiana on Wednesday, June, 2nd. As I’m sure you gathered from the attendance, while this issue is important to your constituents and the area you represent, it is also of national importance. You are to be commended for your leadership role in addressing both the issues of government assisted financing of manufactured homes and the unintended consequences coming from the mandates of the SAFE Act.

As a longtime member of the manufactured housing industry who will not directly benefit from any positive efforts coming out of FHA financing, I still feel the importance of industry access to this type of financing, As a result. I am writing to share my view on what came out of the meeting in Elkhart, and how your role will be critical in achieving results favorable to your district and the entire nation.

I came away from that meeting with the feeling that the critical agencies represented were there because they had little choice and they were hostile to engaging their agencies in chattel (personal property) finance. I believe their reasons are as follows:

  • The histories of chattel finance of manufactured homes are replete with failures and losses.
  • While they are loath to admit it, they lack the experience and knowledge to correct the problem.
  • Like any government agency at the state or federal level change is difficult, especially if it requires taking direction or assistance from the private sector.

I surmise it is easier for them to resist their duty to serve by subversion partly because they have convinced themselves that it isn’t possible to successfully make chattel loans on manufactured homes and not lose money. If this assessment is correct, their attitudes will condemn Title I to failure before it has an opportunity to succeed.

It was mentioned numerous times that the specialty lenders have attempted to share their data on loan portfolio performances with these agencies without much success. If they actually analyzed the data, the truth would soon become apparent to them and I believe they have minimized this data as a way of continuing in their beliefs rather than face the truth of their inadequacies.

Here are some truths about manufactured housing chattel finance:

  • At least three times in the history of the industry, greed coupled with incompetence has led to spectacular meltdowns and failures of manufactured home chattel loan portfolios.
  • Banks and Credit Unions are very wary of chattel loans for manufactured homes partly because they lack experience and expertise and partly because their regulators discourage such lending because so many institutions have lost money making these loans.

Yet,

  • I, and the companies I own or represent, have never lost money making chattel loans on manufactured homes. None of our investors have ever lost a penny either. We have helped banks, credit unions, and insurance companies build some of their most profitable portfolios, as well as pension funds and thousands of private investors.
  • Triad Financial Services, represented by Don Glisson Jr. at the meeting in Elkhart is a 50-year-old company that until about 12 years ago made only chattel loans on manufactured homes has had a stellar history of loan portfolio performance. (They now also do mortgage loans for manufactured homes and own a subsidiary company approved to do Title I and II.)
  • Warren Buffet bought Clayton Homes in order to acquire their finance arms that were engaged in manufactured home finance.
  • Jim Clayton utilized a considerable part of the funds he received from Warren Buffet to start a bank that is very active in manufactured home finance on a national basis.
  • There is over five billion dollars in chattel loans currently that are being made through captive finance organizations funded by the owners of manufactured housing communities and retailers. The people that sell these homes are, in effect, putting their money where their mouth is. Two organizations, Precision Capital Funding and Origen/ManageAmerica are helping them do it (our method is very hands on while theirs is through purveying documents and software) and while I cannot speak for the second organization, I believe they, like Precision have extensive records on performance that would put the older federal histories to shame.

What is the cause of this disparate performance history? To understand means one has to accept the premise that loaning money for chattel loans on manufactured homes is a very specialized area of lending that requires special knowledge and expertise to do it successfully. This knowledge starts with setting up a system that has sufficient safeguards to eliminate dishonesty that is more than just a paper solution.

An industry specific credit matrix is also critical. There are reasons beyond just the four Cs of credit that affect loan performance that are unique to chattel lending on manufactured homes that must be taken into account when considering a loan, and I believe these are totally unknown or undervalued by most organizations when they begin to make these loans.

Because of the nature of the typical borrower, servicing properly must be different than servicing for a typical site built home. Proper servicing can lower nonperformance rates dramatically.

The replevins process also needs to be industry specific because the approach to the process can critically affect both the costs of replevins and the performance of the collateral. The current process in FHA rule is typical but is myopic and costly.

Collateral performance is critical to the whole of the transaction. The lower the cost of cleaning and refurbishing the better for the portfolio. The higher the dollars recovered the better the portfolio performs. It is a given there will be repossessions, but it is not a given that repossessions mean overall losses.

There was some offering of industry financial participation in loss prevention from several of the attendees that basically went unheeded by the government agencies. I would consider this a critical component to the success of any loan program for several reasons.

I believe these agencies will need legislative pressure or mandates in order to take this issue seriously. If they started thinking how they could make chattel finance for manufactured homes work instead of thinking, “it can’t work”, that would be a start, and this is something you can accomplish if you feel it is appropriate.

I would further suggest they recognize the people and organizations within our industry that could provide them with invaluable expertise and information in all of the key areas discussed in this letter. My suggestion would be to work through MHIwith the goal of getting Don Glisson Jr. of Triad Financial Services to head whatever effort should be made.

Through my work as the former Chairman of the Illinois Manufactured Home Quality Assurance Board and other governmental associations, I recognize the difficulty of any government agency implementing rules, policies, and procedures that originate from outside the agency itself. Perhaps an advisory board could be created consisting of industry lenders and consultants that were properly vetted and authorized to recommend policy and procedures that would assure the success of a chattel lending program, as well as supply historical performance data that could and should be utilized in formulating appropriate loan policies and mathematically modeled credit matrixes that actually work. In addition, that data would allow a proper reserve fund to be created to absorb any shortfalls as a result of non-performing loans to help assure no loss of taxpayer monies.

Should you want or need further information from me, I stand ready to assist you in any reasonable way I can. Again, I want to thank you for your attention to the manufactured housing industry and the people affected by your assistance. Please be assured that I will in the June issue of The Chattel Finance Newsletter, inform my 9,000 plus readers of your positive assistance to our industry both on the finance issue and in regard to the SAFE Act, giving you the credit you deserve for your efforts.

Respectfully submitted,
Kenneth Rishel

Kenneth Rishel
Precision Capital Funding
Publisher of The Chattel Finance Newsletter
(217) 971-3968
kennethrishel@captivefinance.net


For more information on this important issue:

FHFA Proposes Rule on Fannie Mae and Freddie Mac Requirements for Underserved Markets

Summit Meeting Addresses Industry Finance Issues

Stage Set for Action on Title I Moratorium

Long-Awaited “Duty to Serve” Proposal Unveiled

Ken Rishel report on the Manufactured Housing Roundtable