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CFED’s Doug Ryan Sounds off on Consumer Financial Protection Bureau (CFPB) Report on Manufactured Housing and MH Financing

October 4th, 2014 No comments

cfed-logo-posted-industry-voices-guest-blog-mhpronews-com-.gifThe CFPB report supports what CFED and other nonprofit organizations have said in recent years:  Manufactured Home loan borrowers are vulnerable to expensive products and are often not well-served by the current financing market due to the lack of competition, lack of liquidity and the costs of the loans.

I have no doubt, as the Bureau reported, that many borrowers of chattel products could have qualified for traditional, less expensive mortgages but did not get the chance simply because they were not offered or made aware of the options. Indeed, one clear way to address this issue would be for industry to support titling reform that would give families the option to title their homes as real estate and the opportunity to access real estate loans.

The report supports, quite explicitly, the need for the Bureau’s current rules to remain in place and enforced. As the Bureau wrote, “the manufactured housing borrowers being charged interest rates or upfront fees above the HOEPA thresholds are the very populations that HOEPA is designed to protect."

I also believe that this report, and related efforts by industry and CFED and its nonprofit partners, offers an opportunity to develop new loan products, expand the pool of lenders and, ultimately, lower the costs of borrowing.

CFED absolutely believes manufactured housing must be part of the affordable housing solution in communities across the US. Far too many advocates and policy makers are unaware of the quality and aesthetic appeal of manufactured homes. There is no doubt industry has made great strides to modernize the energy efficiency, the design and the value of the homes. Quite simply, the CFPB’s report underscores the need for the financing to be modernized, as well. ##

doug-ryan-cfed-posted-manufactured-home-living-news-industry-voices-guest-blog-mhpronews-

Doug Ryan
CFED
dryan@cfed.org

 

 

Related Links:

1) – MHI's Response to CFPB's Report (Note, the MHI link includes the full CFPB report as a free download)

2) – MHARR's Response to RV legislation and CFPB's Report on Manufactured Housing

3) – CFPB Report on Manufactured Housing Signals Areas of Future Concern

4) – Manufactured Housing Institute Responds to Doug Ryan-CFED commentary on CFPB report on Manufactured Housing Finance

(Image credit: Corporation for Enterprise Development (CFED logo.)

(Editor's Note: As with any opinion column, the views expressed by Mr. Ryan are his own and/or those of the organization he works for, and should not be construed to be the views of MHProNews or our sponsors. Other viewpoints on this or other industry topics are encouraged.

MHProNews plans an Industry in Focus Report using extensive comments from a range of industry professionals on this topic. Watch for it mid-week at the news/reports module link above!)

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. )

The IBISWorld Controversy and the Manufactured Housing Industry

April 13th, 2011 3 comments

Exclusive MHMSM.com Industry In Focus Report

The March 2011 IBISWorld report that cited manufactured home dealers as a ‘dying industry’ has made news inside and outside of the manufactured housing industry. MHMSM.com has contacted a variety of Industry leaders and personalities from coast to coast to get their comments. On-the-record comments have included national association leaders, as well as professionals in factory-built housing from the manufacturing, retail, communities and lending sectors.

Messages, comments and calls to MHMSM.com from manufactured home industry professionals dribbled in at first, and then gained in volume as publications such as The Atlantic and Business Insider covered the IBISWorld report. As an example of mainstream media coverage, a TV station in Houston reportedly called a regional firm to interview them about the developing IBISWorld story.

Derek Thompson, associate editor at The Atlantic, penned a commentary that included these words:

“At the center of a perfect storm of boomer burnout, a brutal recession,
and a rapidly changing industry, the mobile home retail market
could be the worst industry in America. Here’s why.”

Photo from The Atlantic
Photo from The Atlantic

“If I asked you to name America’s least fortunate industry, your mind might go to record stores, obliterated by on-demand apps; or photofinishers, left in the cold as digital cameras turn Americans into our own photo editors; or fabric makers, where business is booming … in Shenzhen, China.

“But when it comes to unlucky industries, it’s manufactured home (aka mobile home) retailers who really hit the trifecta. First they missed out on the housing boom. Then they felt the gut-punch of the recession. Now they might yet miss out on the recovery. That makes them America’s fastest dying industry, according to a new report from IBISWorld.”

Paul Bradley with Resident Owned Communities USA (ROC USA) was one of the first in the manufactured housing world’s leadership to publicly respond to this IBISWorld report. Bradley wrote a feature article for MHMSM.com that analyzed the IBISWorld report. Quoting from Bradley’s analysis:

“The (IBISWorld) report states ‘demand is dwindling’ and ‘sales are stagnant because the industry is not innovating, and that sales are likely to continue falling in the coming years.’ They go on to say, ‘Manufacturers have made cosmetics changes to manufactured homes, but they have not been significant enough to alter their life cycle stage.’ The report puts MH retailers in the ‘Industry stagnation’ category of declining industries.

“Are you kidding me? These are ‘deeply researched answers’?

“First, the headline clearly comes from their marketing division as a means of grabbing headlines. The research is not about a dying industry but a declining industry segment – one of two long-standing distribution channels in the business.

“With MH shipments in 2010 at 50,000 or 20 percent of 2000 levels, it’s not news that retailer revenues over that period declined. On that data, I’m surprised establishments are not down more than 56 percent. It suggests that the segment has excess capacity and additional closings are likely.

“Most surprising to me is laying the blame at the feet of manufacturers on the issue of design! From a ground-level market vantage point, that’s misplaced.

“The industry’s great declines came about as a result of, first, an industry-created chattel collapse where the seeds were sown in run-up to the 373,000 shipments in 1998. The collapse, and the repossession overhang which followed, began the decline like a skilled boxer’s well-placed left jab.

“The right overhand came next in the form of aggressive sub-prime and predatory lenders in the site-built market. In that run-up, traditional MH buyers – who were harder to finance for MH as a result of the chattel collapse – were lost to site-built housing in an eerily familiar boom market.

“Dazed by the right hand blow to our collective heads, the left to the body that has people reeling now is the regulatory reaction – the SAFE act, etc. – to the clearly consumer-eating lending practices of the last decade.

“The results of this three punch combination are declines of the magnitude widely reported and felt, and like a good whack, the pain lasts a while.

“Innovation in housing design, however, is not the industry’s chief failing.

“For those of us in the community market segment, in fact, innovation in new homes is a small issue – not a non-issue but a mere shadow of the aforementioned home financing issue. In fact, we are seeing demand for replacement and in-fill homes but only where we are able to arrange decent home financing. People want more efficient homes and the cost savings with new EnergyStar homes can be dramatic based on buyers with whom I’ve spoken.”

(Editor’s Note: The complete analysis by Paul Bradley can be found at this link.)

Other commentary in the form of articles proposed for publication, private and public comments followed. Thayer Long at the Manufactured Housing Institute issued this email as part of his response:

“State Execs & MHI Board:

“A very well articulated response to the IBIS report from last week by Paul Bradley which was just posted on www.MHMSM.com.

“I’d also just add that the sentiment at the Tunica Show, the Louisville Show, and the expected strong turnout at the Congress & Expo and the Tulsa Show and York Show later this month certainly don’t indicate this industry is going anywhere.

“Tony/Paul – I hope you don’t mind me sharing. We’ll see you in Las Vegas. Thanks for your support.

“Thanks-

“Thayer”

MHMSM.com spoke with Danny Ghorbani at the Manufactured Housing Association for Regulatory Reform (MHARR) and to Thayer Long at the Manufactured Housing Institute.

Danny Ghorbani stated in a telephone interview that his comments were not the official position of MHARR, but represented his own views on the IBISWorld report and related.

Ghorbani stressed that the IBISWorld report represented the “failure” of “the post-production sector of the Industry” [meaning, MHI] in “serving that segment of its membership.”

The MHARR official then referenced two previously published documents that do represent MHARR’s official position, which were previously published on MHMSM.com in August and October 2010. These MHARR Viewpoint articles called for ‘the post-production segments’ of the manufactured housing industry to form their own national association; a thinly veiled vote of no-confidence from MHARR towards MHI.

MHMSM.com spoke extensively with Thayer Long at the Manufactured Housing Institute (MHI). The typically soft-spoken Long was quick to respond.

Long was at times tongue-in-cheek, at other points direct in his comments about the IBISWorld report and Ghorbani’s often pointed comments on the matter. It should be stressed that Long’s comments, which follow, should be viewed as his own, and not necessarily reflective of the official view of MHI.

In an exclusive interview with MHMSM.com, Long shared the following thoughts:

Thayer Long:
“If it is a dying industry, then ok, then I guess I quit! And if Danny wants to blame it on us [MHI], okay, what else is new? … I am still struggling to figure out what he (Danny Ghorbani) is doing right now. Name one thing that he has accomplished … in the past three years? What has he accomplished…? I would love for you to think about that and get back to me. What has he accomplished? We [MHI] win and lose some battles. But at least we try. We have accomplished some things. Except, except, except… [MHARR]…nothing….

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