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Posts Tagged ‘lenders’

A Texan’s MH Industry Call to Action

April 8th, 2015 No comments

As they say on television, “we now interrupt your regularly scheduled program to bring you late breaking news.” In this case we shift from our primary focus on the Texas Legislative Session to news coming out of our nation’s Capital.

The government affairs team and leadership of MHI has informed TMHA that H.R. 650 is expected to come to the House floor next Tuesday, April 14, for a vote. Following my comments is the call to action from MHI’s chairman on this critical piece of legislation.

Let me quickly update everyone on what has recently occurred in D.C. On March 25 H.R. 650 was voted out of the House Financial Services Committee by a vote of 43-15. Notably of the 43 votes in favor of the bill, 10 were from Democrats further demonstrating this bill’s bi-partisan support.

We were thrilled to see Texas Congressman Williams, Marchant and Hinojosa all add their names as co-sponsors to the bill. Additionally, subcommittee chairman Rep. Naugerbuer and chairman Hensarling, both also from Texas, spoke during the committee hearing voicing strong support for H.R. 650.

So far so good, but then late last week an article was published that was clearly intended to cast harmful aspersions on specific companies in our industry. This effort was a joint project of The Seattle Times and the Center for Public Integrity. One could conclude by the timing of this article following the successful passage of H.R. 650 from committee, but before it is brought to the full House floor for a vote is, shall we say, less than coincidental.

Welcome to the NFL.

Like hand-to-hand combat…no one ever said passing federal legislation is easy, nor is it for the faint of heart.

This is why we are passing on Nathan Smith’s/MHI’s call to action between now and next Tuesday. We need to make sure we contact as many of our congressional leaders in the House to voice our support for H.R. 650.

For this legislation to become law it has to pass the House and Senate, and then not be vetoed by the President. Passing the House is a critical leg of this three legged stool we must construct.

What’s at stake in this legislation?

Would you like to once again be able to assist your customers through the buying process?

Do you think it will benefit MH home owners – and thus referrals from those home owners – for them to be able to get access more financing on homes under 20K or 25K?  Then ask for support for this bill.

Would you like to actually tell customers which lenders will even consider their credit application rather than pointing them to a lender list and when they ask for help have to shrug your shoulders and leave your customer adrift to figure it all out on their own?

Would you like to see lenders re-enter the lending space for homes under $25,000?

Would you like to be able to assist customers to navigate the lending application process, especially those customers who may need assistance from a bi-lingual salesperson or retailer?

Would you like to conduct your retail selling operations focused on best serving your customers and not be in constant worry that you or your salesperson might have slipped up ever so slightly and crossed over some unclear line during the course of a conversation that can leave you exposed to liability for years?

I’d ask you to think about these questions when you are deciding if you want to spend your valuable time contacting your congressman and encouraging others you know in the industry to contact theirs.

The clock is ticking.

We need to all come together as a unified and strong industry to voice our support for H.R. 650. Our opposition is fiercely attacking this bill and our industry by working against us in D.C., leveraging media plays, and we anticipate attempting to file damaging amendments on the floor intended to splinter support and neuter the needed changes in the bill.

This is a critical time. Thank you. ##

dj-pendleton-mhpronews-com-executive-director-texas-manufactured-housing-association-DJ Pendleton
Executive Director, TMHA

 

Published with Permission. The message referenced from Nathan Smith is linked here.

 

 

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!)

Moblehome, not Mobile Home

July 9th, 2014 5 comments

Does it not roll off your lips? Moblehome. It has a certain rhythm and melody to it. You can say it as one syllable, and not sound like an idiot.

Moblehome, as in a noble home, not a mobile home.

At one time HUD code homes were the only manufactured homes. Not any more.

Man-u-fac-tured-hous-ing, does not roll of your lips. In fact, it is quite laborious to say, with six syllables and no rhythm nor melody. It’s antiseptic. Moblehome is poetic.

Mobile Home is 100% all-American.

I know it’s crazy and against the grain, but I was in it long enough to spout off about it.

Mobile Home should not be a four letter word anymore.

I started in the mobile home finance business working for GECC in Dallas, in 1971, directly for Harry Gilmore, who worked for Fred Wiesenberger, who worked for Scott Conroy, my maternal uncle. Sometime prior to that, Uncle Scott had convinced General Electric to create a “Special Products” division of General Electric Credit Corporation, now GE Capital Corporation, for the sole purpose of offering wholesale and retail financing for mobile home retailers on a national basis.

At the time there were few national lenders, all full recourse, and limited to 84 month retail installment contracts.

I was a mobile home account manager handling about 1500 owners. I managed anything and everything to do with the financed home (primarily collections) from point of sale to completion of contract or repossession, by phone or in person at the residence.

Anyone who was in the business in 1971 knows exactly what kinds of mobile homes were offered to the public. It was not pretty, and in some cases, downright scary.

We all see, on a regular basis, unless you live completely in an urban environment, the vestiges and remnants of the sales heydays of the early 70’s.

There are hundreds of thousands of trailer houses and mobile homes across this country, from coast-to-coast and border-to-border, still in use, well after their intended life span, all pre-HUD, half of them currently uninhabitable by today’s standards, a fourth of them uninhabitable upon leaving the factory, and a fourth of them, like Rollohome, built exceeding the HUD code before there was a HUD code.

The HUD code created a new nomenclature, which has been described by Allen Wallis of

the Natural History Magazine as having four phases;

  • from 1928 – 1940 the travel trailer period;
  • from 1941 – 1954, the house trailer period;
  • from 1955 – June 14, 1976, the mobile home period; and
  • from June 15, 1976 to now, manufactured housing.

Since 1976, we, as an industry, without exception, no matter what sector of the industry one is involved with, as a group, were on a single mission; trying to eradicate all previous terms when describing manufactured housing built to HUD code specifications. It is a valiant and endless chore, perpetually trying to reach the general population, and primarily, our regulators and legislators.

Yet here we are, in 2014, and I still hear on local broadcasting; “trailer,” “trailer house” or “house trailer” and “mobile home,” rarely “manufactured home.”

On national broadcasting, one hears mobile home, an occasional trailer house or trailer park, and rarely, manufactured home.

I see National, State, and County elected officials being interviewed, saying trailer house and mobile home, never manufactured home. Sometimes they will call a HUD home a modular.

I cannot count the times an RV has been referred to as a mobile home, whether it’s a trailer or a motorhome. Motorhome, mobilehome, what’s the difference? Ignoramuses! Are the FEMA trailers ever called anything but the FEMA trailers, even though half of them are HUD code homes and not travel trailers. I doubt you will ever hear, “FEMA manufactured homes.”

I am not saying we have failed, but we sure seem to have a long way to go, after already working on it for 40 years. I have called and emailed I don’t know how many TV stations and networks complaining about their cavalier use of “trailer house” for the last 30 years, although I haven’t called lately. I don’t work in the business any longer, but I do follow it and I do try to educate morons from time to time.

The fact is, the general public has not embraced the term manufactured housing and probably never will. HUD Code manufactured homes are called about everything but manufactured homes by the general public and public officials.

Not mobile home, moblehome, or if you’re nutty about spelling, mobilehome, but one word and when we say it, we are not talking about your grand dad’s mobile home, we are talking about a state of the art, preferred single family residence, blah, blah, blah. I’m not saying give totally up on trying to get the general population to say

manufactured housing, but it’s a slow boat to China. I personally like to say moblehome and I make it perfectly clear I am not talking about a trailer, although the steel is always there, so technically, it’s a trailer with a house on it that trails behind a tow vehicle at some point in its life.

At least we are not called come alongs. ##

ken-haynes-jr-new-mexico-manufactured-housing-association-past-president-manufactured-housing-living-news-com75x75-Ken Haynes, Jr. Please see his commentary on the literally historic and very relevant today document attached to Drawn Quarters – Then and Now.

 

 

(Editor's Note: MHProNews strongly believes that accurate terminology matters, so the thoughts and statements made above are solely those of the writer.

Further, there are points in this commentary that are broad statements that could be construed as technically inaccurate, and should not be taken literally, eg; “half of them currently uninhabitable by today’s standards,” should be read as hyperbole to make the author's point, rather than taken as fact.

As on an issue of industry relevance, MHProNews accepts submissions of articles that may represent other viewpoints. Subject line, “Letter to the Editor” or “OpEd for Industry Voices blog” can be sent to latonyk@gmail.com.) 

Financing in the CFPB Era and the Path to Full Manufactured Home Communities

June 24th, 2014 No comments

Tony,

Great articles and comments made by others. 

I agree with 99% of what is said. The issues I see our industry has are: 

  1. People are so scared of the Dodd-Frank and Safe Act. Our industry needs to deal with this as the new reality and figuring out how to do business with these new regulations. 
  2. Lenders and community owners getting together on a win-win community home financing program that requires community owners to repurchase the homes that default and requires the lenders to originate loans at lower rates. 
  3. Community owners making their communities more appealing to today’s buyer:
    1. Updating their community amenities (Signage, clubhouse paint and carpet, pool furniture, road repairs, etc.)
    2. Enforcing communities rules to ensure that all homes are maintained and clean and neat
    3. Finding ways to improve the community lifestyle by organizing community events that enrich the residents lives.
    4. Moving in new homes and having 2 or more fully decorated models that will help prospects visualize how nice a manufactured home can be.
  4. Community owners should NOT jump into the rental home model so fast. Many markets can support true home sales business model by offering financing options that make sense to their customers. This does take more work but the full community with home OWNERS rather then renters is worth the extra work. 
  5. Community owners offering outside retailers attractive move in programs. 

We have implemented this in all our communities and are selling anywhere from 30-100 homes per community per year. 

Thanks for sharing this article. ##

scott-roberts-roberts-resorts-posted-industry-voices-guest-blog-mhpronews-com-Scott Roberts
Chief Executive Officer
Roberts Resorts
8350 E. Raintree DR. Ste 220
Scottsdale, AZ 85260
480.425.8696

scott-roberts-roberts-resorts-posted-industry-voices-guest-blog-mhpronews-com-(Editor's Note: The articles Scott's letter to the editor refers to are ones by Ross Kinzler and Jay Hamilton.

For those who may not have met Scott or know the progressive work being done in his communities, Scott was the recipient of the Manufactured Housing Institute's “Community of the Year” at the 2014 Congress and Expo.

The head shot above is actually part of a larger photo, that shows him holding his Community of the Year award.)

The RV Industry is Attempting to Amend the HUD Manufactured Housing Code

May 28th, 2014 No comments

The Recreational Vehicle Industry Association (RVIA) is pushing a proposal through the U.S. Congress to change the definition of manufactured home in the National Manufactured Home Construction and Safety Standards Act.  The proposed change would specifically exclude certain “RV trailers,” including Park Model RVs, from the definition of a manufactured home in the federal HUD Code.

The stated purpose of the proposed change is to provide regulatory certainty to lenders, state or local taxation and land use officials that a Park Model RV is a recreational vehicle, not a manufactured home.

Their urgency for this change is that some lenders are apprehensive about making Park Model RV loans in light of the new Dodd-Frank Act requirements.

A concern with the language, as proposed, is that it may allow ANSI Park Model RVs to expand beyond the current 400 square foot size limitation. 

This would be harmful to the HUD-Code RV Park Model industry in states like Florida by encouraging the sale of ANSI Park Models that exceed 400 square feet.

The proposed amendment states, “a park model RV that has a gross area not greater than 400 square feet based on the exterior dimensions of the unit measured at the largest horizontal projections in the set-up mode, including all floor space that has a ceiling height of more than 5 feet” (emphasis added). 

The ceiling height language was inserted to codify a 1997 HUD interpretation that loft areas which are less than 5’0” in height are not considered in determining the size of the structure. The proposed language does not limit the ceiling height exclusion to loft areas, thus allowing for the possibility of “slide-out rooms” or “build-outs” less than 5 feet high.

RVIA is emphatic that the intent is not to increase the size of ANSI Park Model RVs.

According to RVIA, concerns about enlarging the size of Park Model RVs are unfounded because specific rules are in place to measure the size and calculate the square footage of Park Model RVs. Additionally, Park Model RVs are built to standards administered by the American National Standards Institute (ANSI), a national voluntary consensus body. The ANSI A119.5 standards would have to be amended to allow for larger structures.

While these safeguards are in place today, the statute will drive future requirements. If the federal law is ambiguous enough to assert that larger ANSI RV Park Models are allowed, then the rules will change to accommodate this view. 

The RVIA is working hard to get this amendment accomplished during the 2015 HUD appropriations process. RVIA is not looking for industry support, but rather seeks to quell any opposition.

MHI has taken a neutral position on the proposal, while MHARR is adamantly opposed to it.

This proposed change to the National Manufactured Home Construction and Safety Standards Act will have a negative impact on the HUD-Code Park Model industry in Florida. Most Park Models are permanently sited and larger ANSI Park Model RVs will encourage permanent, year round living. ANSI Park Model RVs are designed and intended for recreational use and seasonal living only and are not built to the more stringent HUD building code.

The Florida Manufactured Housing Association (FMHA) has asked RVIA to consider amending its proposal to specify that the 5 foot ceiling height exemption applies to loft areas only. This will ensure that ANSI Park Model RVs are not built in excess of 400 square feet.

Reasserting the current size restriction in the proposed amendment will satisfy the RV industry’s objective of clarifying the differences between ANSI Park Model RVs and HUD manufactured homes for financing and land use purposes, while promoting ANSI Park Model RVs as a desirable option for recreational and seasonal accommodations. ##

james-ayotte-Florida-Manufactured-Housing-Association-posted-on-mhpronewsJames R. Ayotte, CAE
Executive Director
Florida Manufactured Housing Association
3606 Maclay Blvd. South – Suite 200
Tallahassee, FL 32312
Ph:(850) 907-9111
F:850) 907-9119
jayotte@fmha.org
www.fmha.org

Why Retailers and Community Operators should go to Tunica!

March 19th, 2014 No comments

As I read the digital 2014 Tunica Show brochure and business building and profit protecting seminar line up, it became crystal clear why Retailers and Community Owner/Operators ought to be in Tunica next Wednesday morning through Friday at noon (March 26-28)!

Retailers and Communities can get free:

  • Networking with your peers,
  • Compare Manufacturers side by side, over 80 homes will be on display!
  • Compare products and services needed by your business side by side,
  • Get the latest on Manufactured Home Lending available TODAY, from all the major lenders all under one roof.
  • Get expert guidance on Commercial Lending on MH Communities,
  • Get marketing and sales tips in the Dominate Your Local Market 2.0 Seminar, featuring manufactured housing marketing and sales veteran, L. A. “Tony” Kovach.
  • Compare CRM products in a free panel discussion with Scott Stroud and myself, and learn why they are a key to growing your sales in 2014 and beyond.
  • Get success tips on MH Communities (MHCs) from pros with successful firms who know!

Let me give you a quick snapshot of the last bullet point above, which will provide the reasons you need to grab your business cards, and have your photo ID so you can enter the Tunica Show, free!

In the last decade, as the numbers of retailers and shipments declined, manufactured home communities (MHC) have of necessity become on-site-home leasing and selling operations.

Communities have always had to do the types of services and duties that developers and multi-family operations have provided in the conventional housing world.

Tunica has become a magnet in recent years, attracting more communities as well as more retailers than in prior years.

Here is the line up of on the panel for MHC Lessons Learned, to be held Thursday, 10:00 AM – 10:55 AM on March 27th.

Success Tips from Manufactured Home Community Owners & Executives!

For anyone in or thinking about getting into the land-lease community business, this panel discussion is for you! Hear practical tips from community operators that can help you operate your community more professionally and profitably.

jenny-hodge-national-coummunities-council-ncc-industry-voices-manufactured-housing-pro-news

Jenny Hodge, Vice President of the National Communities Council (NCC), will be your panel moderator.

You can learn more about Jenny in this month's MHProNews exclusive interview A Cup of Coffee with…Jenny Hodge.

tammy-fonk-8-2013-cbre-posted-mhpronews-industryvoices

Among those on the three person MHC panel is Tammy Fonk, an Associate with the CBRE MH/RV National Group. Tammy was born and raised in the MH industry with two family owned communities. She operated the family owned company's sales and marketing business as well as having an active role in day to day community operations and resident relations. As a member of the MHRV Team, Tammy now works closely with public and private investors on building business relations and opportunities to enhance the Manufactured Housing Industry as well as the RV Resort and Marina properties in North America. Tammy works with owners and buyers of small, medium and larger communities in addition to representing large portfolio owners.

maria-horton-newport-pacific-capital-posted-industry-voices-manufactured-housing-pro-news-com

Maria Horton is a regional manager with West Coast powerhouse, Newport Pacific. Maria's bio is linked here, but having met her, let me tell you what her resume doesn't say. This is a warm, delightful engaging professional! You will love to hear here insights and experiences on this panel discussion.

rick-rand-great-value-homes-l-sam-zell-equity-lifestyle-properties-els-chair ... layton-clayton-bank-chairman-industry-voices-manufactured-home-pro-news

Rick Rand (l), Sam Zell (c), Jim Clayton (r)

Last and not least, is Rick Rand, who made quite a stir recently with this guest column. Rick was the subject of another MHProNews.com interview, A Cup of Coffee with…Rick Rand.

If online registration for the Tunica Show is closed by the time you read this, don't worry! You can bring your business card and a photo ID, retailers, communities, builder-developers, realtors and installers will be able to sign up at the door, free with those credentials!

Let me close with a tip of the hat to L. A. Tony Kovach. Dennis Hill recently gave Tony quite the well deserved public shout-out, for his key role in the come back of the Louisville Manufactured Housing Show.

Community Operations executive Ted Gross, with Continental Communities praised his session as being the best marketing presentation he had seen since coming into the MHC business.

We've worked with Tony about 90 days now, and let me tell you from first hand experience his deep passion for the MH Industry.

Tony cares about the success of people, operations and loves to see happy consumers enjoying our product.

I don't personally know of anyone who gives more time away for the benefit of the industry.

Tony's consulting and banner ads have helped our company's growth and presence in MH significantly! On MHProNews, he brings out the articles, experts and tackles the topics others shy away from, and is a friendly, peace loving professional and family man.

When you think about it, Tony's efforts to inspire our industry to do more and grow at shows like Louisville and Tunica are part of the rising tide of sales in our industry. You may or may not know it yet, but he makes you money just by being here and spreading the good word about our industry on sites like ManufacturedHomeLivingNews.com and here on MHProNews.com.

These are among the reasons why I'll be voting for him as MHI Supplier of the Year, and I hope others that read this will consider doing the same.

We will be at booth 13H in Harrah's Convention Hall. Change your plans! Make your travel arrangements! Fly, drive or hitch a ride, but we hope to see you in Tunica for the 2014 Tunica Manufactured Housing Show! ##

brad-nelms-coo-manufactured-homes-com-posted-mhpronews-comBrad Nelms
COO
ManufacturedHomes.com

ObamaCare: A Different Perspective

December 5th, 2013 No comments

As a retailer for over 30 years and having operated 15 or so locations, I have lost a few sales per year per dealership due to potential buyers having filed personal bankruptcies in the prior 7-14 years.  Most were due to un-insured medical expenses.

A 2007 Harvard study bears me out.  "Half of U.S. bankruptcies, affecting 2 million people annually, were attributable to illness or medical bills." An article by CNN in '09 raises that percentage to 60%.  Medically related bankruptcies have been rising steadily, up from 8% in 1981 (Businessweek).

ObamaCare – with all it's flaws – is designed to eliminate medical bankruptcy by insuring all without exemptions or caps for catastrophic illness.  What is so bad about that concept?

Just think what 3 -5 more sales per year per retailer would add up to, nationally! 

On top of that, all the site builders would also sell more homes.  Every non-commercial real estate agent would sell more existing homes and their sellers could buy a new home!

Multiply all this out, and you have thousands upon thousands of homes built and sold plus the jobs they create, and the trickle down effect on suppliers, lenders, etc.

It is just a fact that ObamaCare – if tweaked and successful – will be good for housing. I don't care about Olive Garden, I care about the Manufactured Housing Industry! 

Dodd/Frank is the looming disaster for housing, not ObamaCare.

frank-woody-republic-manufactured-homes-texas-credit-azlenews-posted-mhpronews-industry-voices-guest-blog-.pngFrank Woody, Owner
Republic Homes
Texas

(Editor's Note1: Frank Woody (r). Photo Credit azlenews. Frank is too modest to do this himself, so we are posting this for him! Weatherford Police Chief Manning presents an award to Frank Woody for going above and beyond to help law enforcement by providing them a place to conduct training.)

(Editor's Note2: this commentary by Frank Woody came as his 'reply' to the article linked below. His comments above are published at his request.)

http://www.MHProNews.com/home/industry-news/industry-in-focus/6659-dodd-frank-fix-hr-1779-preserving-access-to-manufactured-housing-act-of-2013-achieves-growing-bi-partisan-support- )

Whew! What a Whirlwind 44 Hours

October 20th, 2013 No comments

That is the NCC Fall Leadership Forum: “Building a Vision For The Future” held this past week in Chicago. First and foremost, kudos to my very good friend Jenny Hodge. Jenny is Vice President of MHI’s National Communities Council (NCC) and responsible for organizing and bringing forth this exceptional event. David Lentz is to be commended for his leadership and vision for the NCC.

While on the train from Milwaukee to Chicago I reviewed the agenda just to be certain I was up for the show which began in earnest Thursday morning. There was no doubt in mind that we were in for a very intense Thursday and Friday morning!

Wednesday evening’s reception was a very nicely arranged meet and greet with appetizers and an open bar. It has certainly been some time since we've seen MHI in a position to host such an event.

The real work began Thursday morning. The fact is that there was something to learn for everyone involved in the Manufactured Housing Community industry (MHC) whether you attended one session or attended all of the sessions.

The attendees were made up of a mix from the community business. When there was a show of hands early Thursday morning it appeared that there was a fairly even split of community owners present. One third were smaller owner with less than five communities, one third with less than 10 communities and one third owners or more than 15 communities.

rick-rand-great-value-homes-l-sam-zell-equity-lifestyle-properties-els-chairman-jim-clayton-clayton-bank-chairman-industry-voices-manufactured-home-pro-news-.jpg

Rick Rand, Great Value Homes (l) Sam Zell, Equity Lifestyle Properties (ELS) Chairman (c),
Jim Clayton, founder Clayton Homes and Chairman of Clayton Bank (r)

In addition, in attendance were lenders specializing in community financing, manufactures who are interested in serving the community owners needs to provide homes for vacant sites, Real Estate Brokers who market and sell communities along home lenders and other firms providing resources to community owners.

As is not uncommon at events like this, networking opportunities were abundant. I am more than certain that new relationships were forged, deals discussed and ideas exchanged. That is part of what makes these interactive events such great opportunities for all segments of the industry.

For those who focused on the Build A Vision For the Future agenda, they were rewarded with session after session of individuals both from within the industry and from other industries sharing their knowledge and experience. Topics relating to marketing, selling, community relations and all the important component of customer service which forward thinkers in the MH Industry are working to accomplish. Not only did the presenters share their knowledge and experience, they also made time for provocative interaction and dialog amongst all of us in attendance. ##

(Editor's Note: Read more of Rick's commentary – plus photos – on the NCC Fall Leadership forum at this link here.

You can see NCC dinner cruise and event photos at this link here.)

 

rick-rand-great-value-homes-manufactured-home-pro-news-industry-voices-guest-blog-.pngRichard J. Rand
President
Great Value Homes, Inc.
9458 N. Fairway Drive
Milwaukee, WI 53217-1321
414-352-3855
414-870-9000 (cell)
RickRand@gvhinc.net

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