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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

Retailer plans meetings to effect positive Dodd-Frank change

September 4th, 2011 1 comment

Tony,

My meeting last week with Congressman John Sullivan (OK 1, R) was one of several where I am trying to help establish the support required to achieve the needed changes in the Dodd-Frank Bill that the industry needs. Congressman Sullivan’s Chief of Staff, Richard Hedgecock, suggested through their scheduler that we meet for lunch at a local icon Ike’s Chili. Ike’s Chili is about two miles west of Home-Mart on Admiral and is celebrating its 102 year. The congressman’s Communications Director, John Tidwell was with the congressman and Chief of Staff Hedgecock. One of the first question Congressman Sullivan asked was how my daughter’s family was and especially about our oldest grandchild Cougar. Congressman Sullivan, and the others, have known Cougar since he was a new born and the congressman never fails to inquire as to how he is doing. All three of them were stunned to realize that he was now nine years old with a little sister, little brother, and another little brother on the way.

After a “low calorie” lunch at Ike’s the congressman asked to ride with me down to Home-Mart. We discussed some recent positive press he had received over two jobs bills he had introduced. Unlike what we are used to seeing in “jobs bills”, his bills promoted less government red tape in the market place. I will send out a copy of the news article on the bills.

Doug Gorman and OK1 (r) Congressman John Sullivan Industry Voices MHMSM.com MHProNews.com

Doug Gorman left, Congressman John Sullivan right

Once we were at Home-Mart, I was able to take the three of them on a tour of three houses (all had been show houses in the past) that ranged in price from $65,000 to $105,000. They were united in their praise of what they saw and the congressman even started talking about how to get one installed on his lake property which he indicated is on the side of a hill.

We inserted the message “Welcome Congressman Sullivan” in our electronic message board to add a little spice to the occasion. I had packets prepared for all three of them which included the industry’s most recent white paper on the Dodd-Frank Bill. Congressman Sullivan, who voted against the bill in the House, committed to help our industry achieve the needed changes in order for us to survive.

Prior to meeting with Congressman Sullivan, I had met in early June with Bill Matchneer. I had worked with Bill for almost ten years through the Manufactured Housing Consensus Committee as he was the top person in HUD with direct responsibility for manufactured housing. Bill has been transferred over to the newly established Consumer Financial Protection Bureau (CFPB) which (as a result of the Dodd-Frank Bill) will regulate all financial services transactions (including manufactured housing loans) in the country. Bill has a highly placed position as a staff attorney at the CFPB and was appalled at the looming unintended consequences of the Dodd-Frank Bill. Although most of our problems are statutory, Bill will work with the industry as we attempt to mitigate the damage.

In the afternoon that Congressman Sullivan was there I also was able to visit with Dan Hourigan, from Senator Tom Coburn’s office. Dan is Senator Coburn’s Field Representative and was able spend about an hour with us. We discussed the negative ramifications of the Dodd-Frank Bill and other business issues before touring several homes. Senator Coburn also voted against the Dodd-Frank Bill and can be counted on to assist the industry with the needed revisions.

Additional meetings are planned with Senator Jim Inhofe or his staff and field staff members of Congressman Frank Lucas’ office.

Happy Labor Day to one and all.

Doug Gorman
Home Mart,
Tulsa, OK

(Editor’s note: this is the type of positive engagement that we would like to encourage among Industry members. Others who may have their own story of engaging state, local or federal political leaders, we encourage you to send us your story and photos for publication)

Can you handle a few tough questions?

August 28th, 2011 No comments

Can you handle a few tough questions?

I was doing a weekend hike. I asked myself, how can we get more manufactured housing professionals engaged in self-improvement? It hit me: Can you question (and answer!) your way to success?

Why not?

The idea is simple. Ask some challenging questions that get you and your associates thinking.

Ask the questions, get answers, but also encourage others to propose their own tough questions.

I’ll share a pair of examples to get the discussion juices in your office going.

A sales related question example:

  • Do you have an effective strategy for dealing with price resistance?

A management question:

  • Do you know how your organization’s communication patterns are affecting customer perceptions?

Hopefully these examples will help launch this.

Let the answers – and YOUR questions begin. # #

post submitted by
Tim Connor, CSP

Reading The National Association

August 12th, 2011 2 comments

The Journal

I get “The Journal” monthly, the Jim Visser published magazine that appears to be the sole remaining print manufactured housing periodical. Others, including the much beloved Manufactured Housing Merchandiser, dropped by the wayside in the recent past, as advertising support fell off. Take HUD Code home shipments from 372,800 in 1998, and let them free-fall to some 50,000 in 2010, and that 86% drop annihilated much of an entire industry. We see the results about as everywhere.

I read The Journal regularly, reading some articles carefully and skimming others of less interest to me, but I look at all of them. Note that all of the writers therein are either executives at MH trade associations, or consultants. The tradeoff for the publication is a plentiful supply of written material for free, which they sandwich around their advertising. The writers, mostly consultants, get no pay but are happy to write the pieces to highlight their acumen in their area of expertise, sometimes leading to paid consulting assignments.

We also get some “infomercials” from paid advertisers. They buy an ad and the periodical allows them to write a “puff piece,” often nothing more than a glorified press release. No worries mate, The Journal is not the Wall Street Journal and no one expects it to be.

All the materials therein provide information, which is what advertising is meant to do. The reason Jack uses Enzyte after playing golf is that it makes him a “bigger” man. Informative, right?

Read the articles written by a number of the regular contributors in The Journal or an online ezine like MSMSM.com, and you begin to have a feel for the person or organization producing these pieces.

Trade Associations

As an example, both the manufactured housing trade associations, Manufactured Housing Institute (MHI) and Manufactured Housing Association for Regulatory Reform (MHARR) use the pages of The Journal and MHMSM.com to report their goals and positions on industry matters they deem important. It is also very obviously a recruitment tool for them.

And what can we glean from the decade plus of pieces there by the two national associations in The Journal?

The first thing we deduce is that MHI, through its last three leaders, strikes a measured approach to Washington matters. Being a collection of both home production and the dreaded “post production” segments, they come across as informed, conciliatory, and doing what they can to further the industry’s goals, as envisioned by a few large and powerful members, especially those who are heavy dues payers.

The MHI employee count has plunged in the last 10 years almost as much as industry home shipments, yet I do not notice that much fall-off in their accomplishments. This either says a great deal about the efficiency of the present crew there or the common occurrence in organizations to grow employees more than accomplishments.

On the other hand, MHARR has been, with a brief hiatus in the last few years, almost exclusively the venue for the HUD Code home producers. At MHARR “post production” seems like two dirty words. The HUD Code, the feared federal regulatory scheme of the late 1970’s, brought cries of “it will destroy the industry” before it’s taking effect. Since then, like the “Stockholm Syndrome” it has taken full control of MHARR, and their strong expressions in the pages of The Journal and everywhere else they’ll be heard.

One can only view it as a hate-love relationship with the HUD Code as interpreted, declared and attacked by MHARR’s fearless battering ram, Danny Ghorbani. Say what you will about Danny, he is knowledgeable about the HUD Code as no one else, and relentless in his pursuit of seeing it applied as he sees its meaning.

Danny’s problem, of course, is that not everyone sees it his way. I haven’t noticed MHI being quite so animated in its pursuit of “the Code.” Oh, I’m still waiting for Danny to complete the Manufactured Housing Improvement Act of 2000 (MHIA 2000) Subpart I mandates, his 10-year quest I think as yet uncompleted.

Different Heads

Anyone who has read the pieces by the national association heads here at MHMSM.com and elsewhere will have the feeling that MHI and MHARR are very different organizations. If I’m asked which is more effective I can only comment that neither has been able to stop the regulatory onslaught nor marshaled a unified approach to correcting the deficiencies of the Manufactured Buggy Whip industry. Their efforts have all been in Washington, where they all live and work. Other than the “Duty to Serve” inserted into the GSE mandates, I’ve seen little or nothing which would sell one more home, which should be the aim of the national associations, not the ease of home production.

Blocked weather radios?

Well Hells Bells, Boy, that saved $40.00 per home! Look how that saved $40.00 spurred the sale of homes!

The industry has a whole news media constantly telling the public of the danger of turbulent weather towards manufactured housing. So the battle against weather radios comes off in the media as lack of care for consumer safety by the MH industry. Instead, the weather radio, perhaps not the best weather Paul Revere, could have been taken by the industry and used to show how much MH cares about consumer safety in a lemons to lemonade move. The industry might also have supported proper installation and anchoring of homes. Those moves were fought everywhere, including Florida, where anchors were slammed down our craw. Who was the first to take credit for the very fine job anchored MH demonstrated after the numerous hurricanes in Florida? You tell me!

Waiting to See

But here’s the article I’m awaiting to see in MHMSM.com and in The Journal, by both organizations: Here is a list of the items we have accomplished in Washington, and elsewhere WHICH HAVE LED TO THE SALE OF x MORE HOMES AND MADE THEM A BETTER VALUE FOR OUR CONSUMERS. Wanna see that one? I sure do.

Perhaps it’s unfair to pick on the two national associations. They are both staffed with good people doing what they think is right for the industry. Maybe our expectations for their results are too high.

Could it be these national associations exist only to create and support networking opportunities between industry players and to inform of matters deemed to be important or interesting as it affects the industry? Long ago I came to that conclusion.

The starkest example of the inability of the national associations to really matter beyond information and networking occurred during the period of 2001-2010, especially in 2004-2008, as frequent attempts were made to “restructure” the so-apparent industry defects which were destroying industry sales.

For a variety of reasons, none of the grandiose measures proposed, vetted and formulated in writing came to fruition, as we saw our associations have no ability to restructure an industry. Only the marketplace has that ability, and it proceeds to do so apace. Note that shipments through June of 2011 were down almost 12.3% from last year. Let’s face it, we blew what little wad we had in Elkhart in June of 2010 when FHFA, the GSE’s regulator, told the industry plainly: Our Duty to Serve (DTS) the MH industry doesn’t extend to chattel lending, as the GSE’s already have enough problems without getting into new and potentially troublesome areas, where they have very limited expertise. So much for Duty to Serve and all the homes it would sell through new chattel financing from the GSE’s.

Minor Success

The associations did help get FHA Title I (Chattel Loan) reformed last year, after the program was long time moribund. First year loan volume in 2010 was hardly encouraging, but OK, put that on the list as an accomplishment, limited as it is.

The horse has left the stable on SAFE, Dodd-Frank, other regulations and Super Consumer Agency. Both national associations are actively trying to reform major portions of the laws to exempt MH retailers and others from the force of the laws and their regulations. I suppose a strong selling point by the industry can be the straightforward reputation MH has for integrity in the sale and financing of homes. (Ah, they may have to back off from that one.) I think instead they are going to use affordability of our homes and limiting consumer choices as reasons to exempt manufactured housing from the new regulations. That event, should it transpire, should turbo-boost new home shipments! Right?

Wait a minute. Those laws, bureaus and regs haven’t been in effect all during the explosive industry dismantlement since 1999, so even if the above laws do not take effect against MH they will only reduce the slide, and do nothing to increase shipments. Whoops!

Communiqués Aplenty

Every month we read the numerous communiqués from both national associations. MHI seems the more measured with a range of information and an attempt to influence law makers and regulators with an effort to strike a balance between persuasion and facts. They do not seem to get much done, but then again, why should we expect the MH industry, a true 90 pound weakling, to get things done on SAFE, Dodd-Frank, and Super Consumer Agency when real powerhouses like the Mortgage Bankers and Realtors have had so little success. How, indeed?

Read one of the missives from MHARR and at first blush these beautifully structured sentences and paragraphs speak of power, passion, and a non-compromising attitude. I suppose the reality would be more palatable if not for the fact that this association is a loud-mouthed 90 pound weakling, but a weakling nonetheless. Their endless wrangling with HUD and others almost seems like that cartoon where Bugs and Elmer Fudd go to work every day, punch the time clock, spend 8 hours abusing each other, then punch out at day’s end and go home for a burger and a cold beer. It’s all a game.

And I don’t really blame the staff at MHARR, as they are employees who are guided by the officers and members of the association. It is they who foster this pugnacious attitude. If they have turned MHARR into a “wind them up and let ‘em pummel” HUD or whoever, it is because many in MH have this deviant thought that the “affordability” of the homes the industry produces allows them special prerogatives at the political table. What they do not apparently understand is that affordability of our homes is in the eye of the beholder, and in any event, loan defaults trump home affordability. The industry and their national associations make too much of “affordability” and the results show.

This would all be amusing, of course, if in the course of being a lobbyist, which MHARR is, it actually got things accomplished. Instead, we see a lobbying effort whose response from those they lobby is to roll their eyes about MHARR and call in sick when they are expected to visit.

MHI is conciliatory but gets little done and MHARR is pugnacious and gets little done. Maybe our expectations are too high for what each can and does accomplish. And certainly as shipments have plunged, so has the industry’s importance, PAC money and influence. Hang on to that affordability, it’s all we’ve got!

The Roles

Currently, as the MH industry press explores the roles of the two national associations and whether another is needed, or whether there is any hope the existing two could and should merge, I’m bemused by all the attention to this concern. (Merger you say? Sure! Fool me once, shame on you, etc.) The role of each seems clear to me. MHI is the broad purveyor of consensus and civility, calling on uncaring bureaucrats who do little for them, but meet with them. MHARR is the pit bull, knocking on D.C. doors wherein frightened bureaucrats lie prostrate, with the door well locked. Don’t come in! One tries persuasion, the other intimidation. Both can work in the right hands and proper hands, but the limitations of each, as it applies to the industry, is clearer than ever.

At the heart of the matter is that mortgage defaults and loan losses trump home affordability and consumer choice. No matter the strategy employed by the two national associations, talking home affordability has its limits. In fact I daresay it is not affordability which drove bloated 1990’s MH shipments and sales. No, it was transaction ease, that is, it was easy during the Greenseco era to buy and finance a manufactured home. Home affordability to a degree remains, but transaction ease left, with the results we now see. I’m not sure how the national associations can react to that, for in order to re-establish transaction ease, someone has to take on some massive chattel loan losses. Any volunteers? Danny? Thayer? Anyone? # #

Post by

MARTIN V. (MARTY) LAVIN
attorney, consultant, expert witness
practice only in factory built housing
350 Main Street Suite 100
Burlington, Vermont 05401-3413
802-660-8888
802-238-7777 cell
web site: www.martylavin.com

email mhlmvl@aol.com / marty@martylavin.com

 

 

 

 

Chattel Lender Lowers Rates to 4.5%: Best ever for home only Manufactured Housing Loans

August 12th, 2011 No comments

CU Factory Built Lending, has again rolled out a new loan product with eye-popping low rates for manufactured homes in leased land communities. This leading industry’s lender provided this out of their Seattle office.

Their new floor rate is 4.5%. This is a “step-up loan”, not an adjustable rate loan. The low starting rate is locked in for the first five years, then “steps up” to the higher rate for the remaining term at 7.25% fixed.. This lender’s loan products are always fully amortized. The terms are very flexible and not too difficult qualifying; for example, a guideline that there be no mortgage defaults.

For example, a used 1980 multi-sectional in-community home-only could qualify with 10% down. Assuming top tier credit, the applicant can get a 20-year loan at 4.75% for the first five years, and 7.5% for the remaining 15 years. With 20% down, the start rate would be 4.5%, stepping up to 7.25% after 5 years.

Better yet, for a 10-year loan, with 20% down, the first five years will be fixed at 4.5%, and the remaining years fixed at 6.25%. The borrower may pay the monthly payment based on the higher rate, resulting in an accelerated principal reduction, and saving thousands in interest.

We are told this new “One Step Program” loan product is available in all CUFBL states. Cash-outs and refinances are also eligible, case-by-case. In CA, the older “pre-HUDs” are eligible, but with a 1% rate adder.

This will make financing new and used MH chattels much easier. Our industry needs a good shot in the arm. # #

post submitted by:

Dave Shanklin
Mobile Brokers Acceptance
(916) 962-7128

 

Avoiding the Perception and Reality of Discrimination

August 3rd, 2011 1 comment

In a disappointing scenario being played out in disaster-stricken communities across the nation, Federal Emergency Management Agency (FEMA) policies are resulting in de facto discrimination against HUD Code manufactured housing as both temporary emergency and permanent replacement housing.  At the same time that these policies are unnecessarily complicating badly-needed relief for disaster victims, FEMA, on June 7, 2011, hosted a day-long meeting in Washington, D.C. to explore, discuss and otherwise consider the details of a possible “small footprint” temporary HUD Code emergency home design.  Given these two seemingly opposite directions, a good many HUD Code manufacturers, anxious to meet the current pressing need for post-disaster housing with the most affordable, transportable and rapidly deploy-able homes available, while facing historically low productions levels, are starting to wonder exactly what is going on.

What is “going on,” is that FEMA, facing an immediate need for both short-term emergency relief housing and permanent replacement housing in communities where the existing housing stock and infrastructure has largely been decimated, has, for now, seemingly retreated from the use of new federally-regulated HUD Code housing as a primary source of emergency housing.  Instead, displaced disaster victims have been put-up in rental housing as much as an hour away from their former homes, or in non-HUD Code modular units.  Media reports, for example, indicate that FEMA is currently constructing up to 324 three-bedroom modular homes in Kansas City, Missouri, that will be sited on city-owned land in the north part of town, for some 624 Joplin families and individuals in need of housing.

In part, this appears to be a reflection of specific policy choices by FEMA.  In a May 31, 2011 Associated Press article regarding Joplin, Missouri relief housing, a FEMA spokesperson stated, “despite the distance, putting people in permanent housing is preferable to trailers….”  Another FEMA spokesman commented  that “the agency will consider bringing trailers to Joplin if enough existing housing isn’t available.”  Consequently, FEMA policy seems to be that today’s HUD Code manufactured homes, despite serving as “permanent housing” for millions of Americans and being regulated under federal law as residential dwellings and not “trailers,” are somewhere down its list of options to house disaster victims.

In other places, like Cordova, Alabama, FEMA has failed to overrule — or even object to — local officials who have barred the placement and use of HUD Code manufactured homes as emergency relief housing based on local ordinances, even though such emergency housing is provided with federal tax dollars by a federal government that, under the Manufactured Housing Improvement Act of 2000, is supposed to “facilitate the availability of affordable manufactured homes.”  According to news reports, FEMA’s official comment on this HUD Code  housing ban affecting large numbers of displaced disaster victims, was that “it’s a local issue….”  Whether this is an outgrowth of a “second choice” policy for HUD Code housing or simply unwarranted deference to biased local officials, the result is the same — discrimination against HUD Code manufactured housing that hurts both disaster victims and the industry.

In the meantime, against this backdrop, FEMA, at its June 7, 2011 gathering, devoted an entire business day to a discussion — with industry members — of hypothetical “small footprint” one-bedroom HUD Code units that FEMA might be interested in purchasing under a “possible” future contract.  This, in turn, has led to the creation of  task forces, committees, discussion groups and the like, and meetings of those groups, to explore the particulars of such units, while, at the same time, it was apparent from the various FEMA presentations, that there is considerable confusion and disagreement, within FEMA, regarding the most basic aspects of such a unit, including: its size and configuration; its compliance with federal accessibility criteria; possible mandatory compliance with the International Residential Code; the installation and storage of such units; and the possible use of such “small footprint” homes as permanent housing.  And all this is if FEMA goes forward with such an initiative at all — with FEMA officials cautioning that nothing has yet been decided.

The bottom line for now, is that while there is the appearance of discrimination against new HUD Code manufactured housing in the field for both relief and permanent replacement housing, the industry has been left to chew over the details of a possible new opportunity that may be, could be, or might not ever be.  So, what to do?

Let there be no mistake, the industry can and should continue to work with FEMA.  The HUD Code industry has traditionally taken the lead in providing — on a quick, timely and flexible basis — safe, decent and readily deployable relief and replacement housing for disaster victims.  The industry should continue to pursue this role vigorously with FEMA at the policy level, which is why MHARR participated in the June 7, 2011 FEMA meeting and the Association has already started to follow-up on ways that the HUD Code industry can provide even more assistance to FEMA and other government agencies responsible for post-disaster relief.  The HUD Code industry already has the knowledge, know-how and experience to  provide whatever FEMA and disaster victims need.  But it must also address current FEMA policies.  Very simply, FEMA must be urged to change policies that have resulted, effectively, in discrimination against HUD Code manufactured housing and to re-commit to the use of HUD Code housing — of all types — as an equal participant in its federally-funded programs for both short-term emergency housing and permanent relief housing.

In MHARR’s view, the HUD Code industry has long been at the forefront of helping government provide both temporary relief and permanent replacement housing for victims of natural disasters, and with appropriate policies in dealing with FEMA, there is no reason why it should not continue in — and even expand — that role. # #

Danny D. Ghorbani is President of the Manufactured Housing Association for Regulatory Reform.  MHARR is a Washington, DC-based national trade association representing the views and interests of producers of federally regulated manufactured housing.  Danny can be reached at 202-783-4087.