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Posts Tagged ‘Manufactured Housing Institute’

State Association Quits Membership in Manufactured Housing Institute (MHI), Explains in Writing, Why?

February 9th, 2018 No comments

The manufactured housing industry has long been a mainstay of affordable housing in the United States.  For decades the industry has provided an unmatched quality of life with an affordability not seen in any other sector of the housing market.  The homes and the land lease communities in which they are situated have become fixtures across the country providing an affordable, quality lifestyle to all segments of our population.  Over the years it has seen its ups and downs, but has been able to survive and even thrive through the difficult times.  The greatest hindrance and the greatest threat to the industry is not the economy, the homes or the communities, it is governmental interference and over regulation. 

The Manufactured Housing Communities of Arizona (MHCA) is a statewide association representing community owners in Arizona.  As state associations do, the MHCA has been very active and productive at the state level in combatting governmental interference with its burdensome regulations and obstacles.  At the state level most community owner associations have been able to not only monitor proposed local and statewide legislation, but interact with legislators to prevent onerous regulations that are detrimental to our industry.

The MHCA had joined a national association in hopes that we would get the same representation and effectiveness at a national level.  The national legislation and rule making over the last ten years has proven that we do not have that representation.  One only has to look at the passage of the Safe Act and the Dodd-Frank Act to see how devastating and onerous national legislation can be.  Other similar chattel groups (the RV industry) saw the proposals and their representation managed to have them exempted.  The national organization to which we belonged was apparently unaware of the legislation and its ramifications until after passage and it was already being implemented.  The rule making in the aftermath has been horrendous and little if anything has been done to stop the bleeding.  Recently, HUD has issued rules concerning the screening of prospective tenants for our communities.  Again, we find no one aware of what is happening, much less advocating on our behalf.  Installation requirements are being implemented that have no basis in common sense and the result will be additional burdens on community owners and added costs for homeowners.

Due to the lack of effective representation at a national level, the MHCA withdrew its membership from the national association to pursue other avenues of representation. We are not the only state association to do so.  The MHCA has been exploring other options; including hiring a lobbying firm that is prominent in Washington, D.C. 

MHCommunitiesOfAZNealTHaneyPresidentWhyTheyQuitManufacturedHousingInstituteMHIDailyBusinessNewsMHProNews737x214

In some cases, the state associations represent community owners only and in others there is a single association representing all aspects of the industry.  We need a national association to advocate on behalf of community owners.  It does not need to be an association with conferences to attend or one that requires numerous meetings and publications.  Such an association needs to be very narrowly focused on monitoring proposed legislation and rule making.  We need someone to advocate on behalf of the community owners.  This singular task needs to be done at the congressional level and in the departments that make policy affecting our industry.  Every community owner, and every association that is accepting membership dues from community owners, should be concerned with the lack of representation at the national level and should be involved in finding adequate representation.  If you are willing to be a part of the solution, please contact our association office.

Manufactured Housing Communities of Arizona
2158 N Gilbert Road, Ste. 116
Mesa AZ 85203
Phone: 480.345.4202, Toll free 800.351.3350

You may also email our Executive Director Susan Brenton at: sbrenton@azmhca.com.

Thank you for your consideration on how you can help shape the future of our industry.

Sincerely, 

Neal T Haney,
President


##

ManufacturedHousingCommunitiesofAZLogoIndustryVoicesDailyBusinessNewsMHProNews

Manufactured Home Communities – aka “Mobile Home Park” – Closures – Viewpoint by Marty Lavin

April 23rd, 2017 No comments

As with many things in life, the matter of park closings is highly complicated with few easy answers.

Probably the best answer is to allow the park residents the option to purchase the property. Not fool proof, but meets the burden of the failure of the park owner to allow residents to maintain the perpetual rental of space for their home, which is implicit in buying a home in the property.

When most (manufactured home community residents) buy a home in the property, rarely if ever is he handed a notice that the community could be closed on short notice, their only relief being whatever measure their state or city has for park closings. Most residents rarely consider park closings as a threat till the specter arrives.

On the other hand, in a capitalist nation we still behave in some areas as though the park owners have no legal responsibility to allow the residents to stay, and can sell the property to others at will, and empty the community with little hindrance or concern, again, subject to whatever relevant laws control the closing.

I have been surprised in areas where park closings are common that authorities do not compel a statement be given in writing as part of the move-in process alerting the new resident of the right of the park owner to sell or close the community and what compensation, if any, is available to the resident on closing.

MartyLavinJDMobileHomeParkManufacturedHomeCommunityClosuresMHProNews

Headlines and these graphic are provided by MHProNews, as is customary with many in media.

I’m also wondering, but not enough to research the subject, whether upon notice of closing, residents should get an attorney to plead their case that the park owner allowed them to have a home in the park, often encouraging their entry, knew or had reason to know most people would get a long term mortgage to purchase their home. Often at closure, many years mortgage term remain unpaid. It is here the lender gets the downside loss, and is not particularly beneficial for the home owner.

Remember, it is not unusual that when the home must be moved or resold because of a closing, the stars do not line up well for the home owner. First, the home must be moved, there as a cost of moving and the difficulty of finding a lot to accommodate the home. Quite a hand full, usually not ending well, unless the state laws give some protection to the resident. The process is pretty destructive of our financially fragile customer base.

Frankly, this mercenary park closing without adequate compensation for the resident is morally wrong if not legally. It does no credit to the industry that so much of this happens.

Meanwhile, I was amused that people are forming groups to try to save endangered parks to keep them open.

I wondered where these folks were in the 1970s when I was doing park development zoning in the north east.

At virtually every meeting, the facility used had to be upgraded to the school gym to handle all the attendees. All seem to me to be carrying tar and feathers and had mean looks in their eyes. How many parks could have been built to accommodate the demand had there been far less resistance? Who knows, but far more. And it continues even today.

I guess that train has passed, but the California boys being pretty bright, I’m sure they are still trying to build parks in less expensive land areas. How is that going? ##

(Editor’s Note: The commentary above is in response to the mainstream media article, linked here. Lavin is the winner of MHI’s Totaro Award for his lifetime contributions in financing, was a mobile and manufactured home retailer, as well as  an owner/operator of manufactured home communities.  Some of Lavin’s other insightful, popular commenataries are linked below.)

MartyLavinTotaroAwardFinanceAwardManufacturedHousingIndustryVoicesMHProNews

Photo from Mary Lavin, Esq.

MARTIN (Marty) LAVIN
Att’y, Consultant, Expert Witness
in Manufactured Housing.
350 Main Street
Burlington, VT 05401
802.238.7777

 

Recent, also by Marty Lavin:

http://www.MHProNews.com/blogs/industryvoices/not-enough-hunger/

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http://www.MHProNews.com/blogs/industryvoices/deja-vu-again-a-new-manufactured-housing-institute-mhi-initiative/

Award-Winning MHI Retailer Regarding HUD Objectives, Pam Danner, Needed Changes

March 8th, 2017 No comments

I can’t improve on what Mark Weiss [MHARR President and CEO] has indicated below:

DougGormanICantImproveOnWhatMarkWeissMHARRPresidentCEOHasSaidBelowManufacturedHousingIndustryVoices-MHProNews

Graphic above and the headline were provided by MHProNews, as is customary in publishing. The words in [brackets] were added for clarity, and the text submitted for publication is by the author, Doug Gorman. 

“While MHARR does not claim to speak for the entire industry, we have made it clear that after years of abuse by federal regulators acting contrary to the law and empowering entrenched revenue-driven contractors to target the industry, the new era of regulatory deconstruction being ushered-in by the Trump Administration offers a profound opportunity that must not be missed or squandered.  And while other segments of the industry – following their recent meeting – have not given any public indication of a change in course, direction or approach based on this new reality, MHARR has been on top of this critical matter since the November election, and has already put in place fundamental priorities and policies that I am happy to share with you and the rest of the industry as shown below:

  1. Elevate and include manufactured housing in all HUD (and other federal) housing and housing finance programs on the same terms as other types of housing;
  1. Immediately re-assign the current career HUD manufactured housing program administrator and appoint an appropriately-qualified non-career administrator in accordance with the 2000 reform law who would fully and properly implement that law and any and all regulatory policies and orders put in place by President Trump;
  1. Immediately prepare and issue a new Request for Proposals (RFP) for the HUD program monitoring contract which would provide for, encourage, and ensure full and fair competition for that position, eliminate all “make-work” programs and functions contained in the current contract consistent with Trump Administration regulatory policies and orders, and terminate the existing monitoring contract upon the identification and selection of a new contractor;
  1. Seek the immediate withdrawal of the U.S. Department of Energy (DOE) proposed manufactured housing energy rule pursuant to executive action by either the incoming DOE Secretary, the President, or other appropriate authority and, if necessary, seek a congressional resolution pursuant to the Congressional Review Act to reject any such rule if or when finalized; and
  1. Demand and ensure securitization and secondary market support for manufactured home chattel loans in a significant and timely manner by Fannie Mae and Freddie Mac, so that consumers are not needlessly either excluded from the housing market or unnecessarily forced into higher-cost loans within a less-than-fully-competitive consumer financing market.” ##

Addendum on 1:40 PM 3.10.2017, by Doug Gorman:

I would clarify that Mark Weiss’s language re Pam Danner was that she be reassigned. The original structure of the 21 member Manufactured Housing Consensus Committee  (MHCC) was to have a nonvoting 22nd member. That position was to be a non-career political appointee who would change most likely with each administration. That was the position that Bill Matchneer filled originally as a political appointee reporting to Gary Cunningham at one point. When Gary Cunningham left HUD Bill was promoted to Gary’s career position and the non-career position has never been filled since. Mark’s point was that HUD should structure the manufactured housing program as intended by the 2000 statute. ###

DougGormanHomeMartTulsaOKCreditManufacturedHousingIndustryVoicesCommentaryMHProNews125x125Industry Voices post submitted by Doug Gorman, Home-Mart, Tulsa, OK.  Other guest comments on this or other topics of general industry interest are encouraged and welcome.

 

 

 

(Editor’s Note 1:  Doug Gorman has won several MHI awards as a retailer, and was volunteered hundreds of hours on national issues, served on the Manufactured Housing Consensus Committee (MHCC), etc. Gorman is one of a few individuals who was asked by MHProNews for his thoughts on the needs to replace Pam Danner at HUD, and what MHI’s position on this issue ought to be.  The above was sent by Gorman in response to that inquiry, and was sent for publication.

Editor’s Note 2: There are several Industry Voices posts pending publication, we hope to get caught up in the next week or so.  Please continue to send your thoughts and comments – on or off the record – and be clear what is and is not for attributed publication.  Thank you for your patience.)

 

 

 

 

 

 

Problems with Quote from Richard Jennison, MHI’s CEO in StatePoint Advertorials

September 16th, 2016 No comments

As usual, I have been perusing the media sites, informational resources and doing online searches on news regarding Manufactured and Modular Housing.

In doing, so I have come across articles supported by the Manufactured Housing Institute (MHI) that have taken me aback.  These articles include quotes from MHI CEO Richard Jennison.  I couldn’t help but to reread these articles several times, as I couldn’t believe what I was reading would get published by a national association like MHI.

One would think the legal eyes would be on these advertorials published via StatePoint.  They need eyes like hawks on a field mouse to verify and validate appropriate and accurate content regarding quotes and implications.  When promotional articles are wordsmithed correctly, they protect the association and its membership from potential individual or class action suits.

As a specific example, MHI CEO Richard Jennison declared boldly that HUD Code manufactured homes placed in land lease communities appreciate just like site built homes.

Quoting from one of those MHI-Jennison (StatePoint) article, Furthermore, they (referring to HUD Code manufactured homes in a land lease community) appreciate in value, just like site built homes.”

Umm, are you kidding me?

I was blown back by this comment from countless perspectives.  The first of which is NEVER violate the second GOLDEN RULE of real estate.

Real Estate Brokers and Agents are taught the second GOLDEN RULE of real estate in Real Estate 101, that after Location, Location, Location, you never, NEVER, EVER discuss or guarantee future value of a property.  Having taught real estate 101 and 301 at the community college level – often instructing those holding a real estate license – I assure you my information is accurate.

Guaranteeing appreciation is a quick, sure way of opening yourself up to a gigantic law suit that can bury you and your firm; or in this case, an association making such a problematic assertion.

For the CEO of a national association to put that in writing is appalling. Especially so, after they spent time convincing the GSEs to use Blue Book valuation in early 2016 when assessing or appraising MH in an MHC!

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Quote from Titus Dare – graphic credit, by MHProNews.

Now the article with Jennison’s comment was presumably released from the highest level of MHI.

Where’s the disconnect?  Who approved this?  Were any of the legal eagles reading this carefully to see the potential for future legal issues for both the association and just about everyone associated with making a sale to a consumer placing their new home in an MHC?

If just one person relies on that Richard Jennison statement and buys a manufactured home, sites it in an MHC, and loses money or doesn’t feel their appreciation rate matches that of their brick and mortar friend who owns a home in the same zip code, what do you think that consumer is going to do?

They are going to hit the internet after work and research their subject material, to determine why they were told their appreciation would be the same – and then they may well run across resources that tell them why there home is not gaining value as they were led to believe.  They are going to put the pieces together. That can lead to major problems for many in the MH industry.

They may even call MHI, their state association or…their attorney.

That consumer is going to learn that MH home prices are determined by Blue Book values, as MHI pushed to have that implemented in discussions with the GSEs. Anybody, even the least sophisticated consumer, knows from their car buying and selling experience that Blue Book values are based on depreciation.

There are so many factors that go into appreciation and depreciation, as real estate and many MH industry professionals know. There is the local and national economy. Location, including the impact of factors like the school district.

How about the quality level of the subject manufactured home, and how it is being care for – or not – by its owner? How about the foundation and installation system under the home? How is the community managed and maintained?

But all those facts and qualifiers about manufactured – or other homes – is missing in this highly irregular line, again, quoting Jennison – “Furthermore, they appreciate in value, just like site built homes.”

Where are Jennison’s and MHI’s qualifiers for all of these issues in that StatePoint advertorial, and so many more that are needed?

Before writing this column, I sent the link to that MHI/StatePoint article to some legal minds, and asked them for their input on manufactured home appreciation being automatic in a land lease community.

The return calls included a voice laughing on the other end, asking me to please distribute their business cards to those consumers who had bought homes under the pretense of the comment made by the CEO of the national association.

This advertorial approach was a mix of good, bad, inaccurate and deceptive marketing on behalf of a national manufactured housing association. I’ve focused on the bad, because that is where the problems will come from.

You would never see the NAHB or another national trade associations blurt out such problematic nonsense. ##

(Editor’s Note: headline was provided by MHProNews. This column nor the cover message directly referenced the Masthead column linked here, but it is on the same topic.)

titusdareeagleonefinancialposteddailybusinessnews-mhpronewsTitus T. Dare
SVP – Real Estate Development & Construction
Eagle One Financial

 

A Deeper Look at why the GSEs say no to Securitizing Chattel Loans

May 24th, 2016 1 comment

TOPIC

The Duty to Serve (DTS) question for the Government Sponsored Enterprises (GSEs) of Fannie Mae and Freddie Mac regarding originating Chattel (home only, personal property) loans on HUD Code Manufactured Housing has been a topic of discussion for years.

FreddieMacFannieMae-logos-creditBeforeItsNews-PostedMHProNews-

Logos are for editorial illustration purposes only, and are the properties of their respective organizations. Composite image credit, BeforeItsNews.

BACKGROUND

To understand why I say what I do about DTS, the GSEs, MHI and manufactured housing (MH) below, some history will be useful. My experience with MH Affordable Housing and Duty-to-Serve spans nearly 35 years.

Upon entering the mortgage banking business, I worked in the mortgage division for Fleet Bank in St. Louis, Missouri. I made my first HUD Code MH land/home loan back in 1982.

At that time, HUD Regional Offices had to approve each subdivision and the homes that were being constructed within that community. HUD reviewed, approved and retained documentation and complete control of the Architectural & Engineering process.

The Regional HUD Office was located in St. Louis and Chaired by Joy Miller. Fleet was chosen by HUD because of its strong government lending (FHA & VA) platform, national presence with the ability to replicate the program. Fleet provided financing for the consumer’s purchasing HUD Code, single-sectional and multi-sectional, Redman Homes on short wall foundations in a subdivision in House Springs, Missouri. This was a new MH “beta test” community development project. It was one of the first HUD Code MH subdivisions outside of California. It was cutting edge and an exciting step for me right out of college.

At the time, I had no idea that my future in banking would be focused around Affordable Housing. From that point forward, I continued down the path of Affordable Housing which is truly a key for the to Duty-to-Serve.

In my follow-up assignment, I worked extensively at Ft. Leonard Wood, Missouri making over 600 VA loans in two years to accommodate relocating veterans and civil service personnel in the initial phases of the US Military Base Realignment and Closure (BRAC) program. Specifically, on the Ft. Belvoir, Virginia relocation of 2400 families to Ft. Leonard Wood over six years. Brick & mortar site built homes were selling for $35,000-$65,000.

Next stop was in 1995 when I was invited to join an exclusive group of high profile mortgage bankers who focused on Affordable Housing nationally. I had no idea when I was chosen that I was chosen for my HUD Code MH housing experience. The group of 30 members from around the country formed the Underwriting Barriers Outreach Group (UnBOG), lead by Rick Coffman and Matt Miller of Freddie Mac in Washington, DC.

The task force was formed to bring mortgage bankers together to discuss how to create loan programs to provide financing for the underserved, economically or geographically challenged consumers. These borrowers were credit worthy, but did not have down payment of 10% or 20% plus closing costs. Or they could not meet the debt-to-income ratios of 28/36. They needed expanded guideline programs. As a member of that task force, I helped craft the 97% LTV Alt-A, Section 8 Voucher-to-Own, Lease-Purchase and the 105% LTV loan programs.

During that time period, our government leaders on Capitol Hill put mandates on the GSE’s to produce and deliver Affordable Housing programs to the marketplace. The new mandates were tremendously difficult to meet. They were tied to creating and driving home ownership in the United States. The new mandates required that 1 out of every 2 mortgages purchased by Fannie Mae or Freddie Mac had to meet strict affordable underwriting criteria to be considered affordable.

The reason for the formation of the UnBOG group and the push to new loan programs as outlined above to expand homeownership, thus simultaneously answering the DTS mandate at the same time. It was from the UnBOG platform I learned how to write loan programs and how they were developed to serve a diverse and unique new classification of purchasers referred to in those days as “low-mod” borrowers.

In essence, our leaders on Capitol Hill were enforcing the Duty-to-Serve component which had been the focus of the creation of Fannie Mae and Freddie Mac from their inception. Nothing new, just a way to measure and enforce the GSE’s mission of Duty-to-Serve and expand homeownership.

FAST FORWARD

My invitation to UnBOG was to provide insight into the Manufactured Housing space. Specifically, how to create and deliver the MH product from construction loan through permanent end out loan on a product built in an off-site factory versus the traditional on-site method.

By this time, I had already successfully been making construction-to-perm loans on MH for 13 years. The GSE’s felt that a look into the MH industry, what I was doing and how I was doing it, could help them achieve these lofty Duty-to-Serve Affordable Housing goals now being enforced from Capitol Hill.

This point is that Duty-to-Serve is nothing new. It truly is the reason Fannie and Freddie were created.

For the first couple of years, we focused on Fee Simple loans known in the industry as Land/Home loans. Many of the programs coming through the development pipeline at the GSE’s were inclusive of MH Land/Home financing. Land/Home was sort of a no brainer, but subject to several gaps that needed to be closed with regard to title insurance, retiring titles, mortgage insurance, production and travel insurance, method of attachment and the creation of a true real property package upon completion and conversation to the permanent-end-out mortgage. Those topics we can save for another article.

In 1998, while working for First Tennessee Banks mortgage banking division, which would later become First Horizon Mortgage, I received a call from Freddie Mac asking me if I was interested in working on a new loan program crafted by a captain of the MH land lease community at MHI, a gentleman named Rick Rand. Rick had worked with program development guru Ginger Walters and Freddie Mac attorney Judith Agard to craft a program to serve as the Chattel Loan look-a-like.

The program was designed around a 35-year land lease, which created the real property entity necessary and required by the GSE’s to make a 30 year fixed rate loans on MH HUD Coded homes sited in MHC’s.

It was a brilliant piece of work by all parties, but there wasn’t anyone in the mortgage or banking space interested in the $300MM beta test “pilot program” that 99.99% of bankers had no clue about. It just so happened that I had extensive leasehold estate background from years gone by.

So when I received the call from Rick Coffman from Freddie Mac, my UnBOG colleague, I understood the program immediately.

Needless to saym it was exactly what the GSE’s needed to kill two birds with one stone. First and foremost, it met the Affordable Housing criteria right out of the box for Community Reinvestment Act (CRA) credit. Which meant it could be counted towards the GSE’s requirement to expand homeownership. Second, it answered the DTS question that had been long on the lips of all MHI leaders, pushing for rates and terms more readily associated with brick & mortar housing.

For me, it was just another niche market program that I was going to have to run up the flagpole with my boss, his boss, his boss and so on until I got to the banks president who just happened to understand the program.

Why, you ask did the president of a large bank like First Tennessee get it?

Well, because it just so happened our largest client on the books at the bank was this fellow name Jim Clayton, and his company was called Clayton Homes. You know  – the gent who sold his manufacturing, retailing and MHC communities to the “Oracle of Omaha”, aka Warren Buffet.

There was a program which we launch at First Horizon where we worked out the kinks in origination, processing, underwriting, closing, funding and servicing and – oh, yes – securitization too. Because Fannie and Freddie had their securitization platforms built out years before this “real property” leasehold estate program arrived on the scene.

By the way…pricing was about a ½% above the then 30 year fixed rate pricing.

The program was strong and grew legs. We even added a One-Time-Close (OTC) Construction Loan to the menu as First Horizon was developing Construction-To-Permanent (CTP) and OTC loans at that time.

We then moved it to First Bank where it died on the vine, as it became tainted by those who thought we could utilize this program the same way the other Chattel programs were being used in the marketplace in that GreenSeco era of “No Income, No Asset, No Job, No Money,” no problem loans. The GSEs wanted none of the headaches that came from the mindset that spawned GreenTree, Conseco and the other related chattel lending meltdowns of the late 1990s, and the early 2000s.

MHImanufacturedHousingInstituteLogo-postedIndustryVoicesMHProNews-

The MHI logo is used here for illustrative purposes only, and is the property of that trade association.

WHAT’S THE POINT?

For years MHI has been attacking the DTS issue in hopes of pushing through some sort of chattel lending conduit for as long as I can remember. The Duty to Serve has been on the books since the inception of both GSEs.

The DTS guideline for both GSEs – Fannie Mae and Freddie Mac – in their view is clearly stated to be for real estate secured properties. Chattel loans by definition are not real estate, and most folks in the MH world don’t understand the cost to build the securitization process.

The roots of the issue from the GSE vantage point are several key components.

First, understand that neither of the GSEs have the platform to securitize and deliver chattel product into the market place. There is already a pipeline to buy/deliver loans on conventional housing, but there is nothing like that for the personal property lending space that manufactured housing operates in.

If the GSEs were to spend the millions and millions of dollars to build that secondary market, there was in the past insufficient product flow to support the expense.

Another prime example is that the major purchasers of GSE securities paper are not interested in buying chattel (home only, personal property) loan production.

Those investors, such as Goldman, BlackRock and Raymond James among a host of other institutional buyers of mortgage paper do not have a DTS requirement. They are a behind-the -scenes cause for the “Just say No” by the GSEs on MH chattle lending, not the GSE’s themselves.

The GSEs only buy what they can securitize and layoff out their back door to their institutional buyers. If the institutional players don’t want the paper, who else is there to purchase those MH chattel loans in volume?

It is MHI’s lack of understanding of the function the GSEs have in providing paper to their core secondary lenders, such as Wells Fargo, Bank of America (BOA) and U.S. Bank.

What causes a great part of this problem is the MH industry’s failure to create a program that delivers a standardized product. For example, when the GSE’s buy a loan from Wells or BOA, the home created is attached to the land through a standardized “method of attachment.” That’s commonly called a “foundation.”

The house is built for a slab or a stem wall foundation that attaches a given residence to the dirt creating a single package of “real estate.” Home, foundation (which again is standardized) are connected to the land, thus creating a single package of real property. That standardization allows the title insurance companies and private mortgage insurance companies to stand behind those loan products too.

Chattel loans on manufactured homes are seen by the GSEs as a hodgepodge of various foundation systems. Mock block in their view is nothing more than a faux exterior wall that doesn’t attach the home to the ground. They see MH as concrete blocks on plastic pads, tied down with cork screw anchors, metal straps and then commonly enclosed by using vinyl skirting.

In the eyes of the folks that buy all the securities from the GSEs, those aren’t true foundations, they don’t believe they’ll stand the test of time, i.e. the 30-year term of a mortgage. Thus, the home – and loan – in their view won’t perform.

This is in spite of the fact that there are thousands upon thousands of successful examples of manufactured homes that have stood the test of time on these foundations.

In a phrase, this is a perceptual issue that calls for insights and education.

But have you ever sat across the table from six “black box” investment bankers and actuaries from Goldman Sachs or Pieper Jaffery and tried to explain to PhD. so-and-so from Harvard, and Phd. so and so from MIT or Yale and argue such topics? Doubtful. But I have. And I must tell you it is exhausting and has often seemed to be wasted time.

One such academic who actually had a hand in creating the securitization business called me aside halfway through one such meeting and said “Titus, let me give you a bit of information from our perspective.” “Yes, sir” I said, all ears. “If it walks like a duck, quacks like a duck guess what? It’s a duck” …meeting adjourned.

In addition to the manufactured home foundation issue – right or wrong – the security buyers still view these homes as ones that can be moved to another location in the middle of the night.

The MH industry fails time and again to realize the GSEs are a conduit to the secondary market buyers.

The GSEs create “real property” securities that are sold into the marketplace. The GSEs don’t even have to service loans. They have four major servicers behind the curtain that can service loans, if necessary, on behalf of the folks who purchase the securities.

The Triad Financial Services and Clayton/Vanderbilt Mortgage and Finance chattel models are different yet similar, as they finance chattel loans that are either held in portfolio or sold at a discount to a note rate buyer looking for yield spread.

The Clayton/VMF model is successful because Mr. Buffet has deep pockets and likes the yield spread. Not to mention Jim Clayton had the brains and financial support to create it. And at their company owned retail centers, VMF only finances paper from Clayton dealers. Plus, Mr. Buffet owns Clayton manufacturing and many of its suppliers as well as its dealer base. He is thus able to finance low credit with higher down payments or he can finance 5% down for consumers with truly good credit scores.

Triad focuses on AAA grade paper from reputable dealers that have a strong track record with Triad’s independent MH retail base. They portfolio and service their loans in house. Don Glisson, Jr. and his team have done a terrific job of navigating the chattel waters for over 30 – sometimes tumultuous – years. Triad’s book of business is the testimony to Don’s success.

If the MH Chattel industry would produce a standardized product model, with a more traditional method of attachment, and pushed the model without deviation through a beta channel and proved that compliance, not circumvention is the new MH mantra, then they would have a secondary market delivery strategy.

Armed with such data, you can then approach the investment banking crowd with proof of your models success. But instead, every time there is a lack of lenders or funding in the MH market, MHI cycles back to the GSE’s and DTS.

But there are powers that be in the good ole boy MH world who won’t learn and/or capitulate to those realities. As was noted in the Masthead blog linked here, the GSEs – as well as FHFA and most importantly our U.S. Congress – will not budge on this issue.

By the way, some of those House and Senate members will upon retirement want to go to work for the GSEs, or with the institutional actors such as Goldman Sachs or BlackRock. So they aren’t going to do much if anything in defense of chattel lending if it causes heartburn for those they may go to work for later in life.

4S=SafeSoundSanitarySustainable-postedIndustryVoicesMHProNews-com-

The answer…is easy…follow in the footsteps of Jim Clayton, Don Glisson, Jr., and Warren Buffet and create a standardized program that delivers a product that can stand the test of time and contain the 4 S’s: Safe, Sound, Sanitary and Sustainable.

But the MH industry, year after year after year, fails to produce anything that the true secondary market is likely to hang their hats on. ##

TitusDareSVPEagleOneFinancial-PostedIndustryVoicesMHProNews-com-Titus Dare
Senior Vice-President
EagleOne Financial, Inc.

 

 

Editor’s Note: Other well reasoned letters to the edtior Op-Ed style viewpoints are encouraged on this or other MH topics.

The Association Lament ­- A Commentary

January 26th, 2016 No comments

My first experience with MH associations came when my company, the MHB Group (formerly known as the Mobile Home Board), was involved in trying to create a Multiple Listing Service (MLS) for manufactured housing. Our idea was to expand on the MLS we had run in Santa Clara Valley for almost 30 years into a national service. To that end we joined CMHI, WMA and MHI.

We dutifully attended meetings in California via WMA and CMHI. We penned articles for publications and made our case in regional meetings. We attended many MHI meetings over the course of 3+ years. We joined the MHI Resale Task Force and championed that cause to the best of our abilities. We penned articles for the Merchandiser on the topic. We shared our expertise and knowledge with the task force.

The end result was wasted money and effort.

When it came time to make some decision on a MLS we felt as though our information was readily valued and used but we were never allowed the opportunity to participate in any decision. In the end we were politically out maneuvered and essentially shut out of the process. To say that we were not happy was an understatement.

To say that we soured on association involvement is also an understatement.

From this limited experience we have an opinion or two to share.

It seems to me that to belong and participate in an association has an expectation attached to it. That expectation is that some positive result from our effort, time and money would accrue to us.

In our case that was not true. No one promised us anything nor did we have the right to a

guarantee.

However as a dues paying member we assumed our experience had value to the industry we are part of. That may have been the case for our industry but for us it did not.

A bigger downside was the cost of this activity. Traveling up and down California, traveling across the United States, having display booths at Expos and Conventions is expensive.

For our company, it ran into tens of thousands of dollars over three plus years. It is one thing to spend this kind of money to see a return. It is wholly another thing to spend this money and realize, after the fact, what a waste of time and capital it was. We will never participate with an association to this degree again. We may choose to join again locally, but we won’t extend ourselves like that again given the miserable ROI.

An equally important drawback in my view is the limited membership. During our time we always saw the same faces. No one new. Same people and companies, doing the same thing over the course of two or three days.

To grow an industry one needs to attract new blood. We were one such company but as you can tell we left the association world after a negative experience. How many others like us have had a similar experience?

Also having a limited, narrow membership base will get you narrow and limited input and outcomes. To me this means that our associations are attempting to achieve goals and outcomes for a selected few.

I don’t know about anyone else but my view has been that a trade association is looking out for an industry as a whole and not just the biggest dues paying members. Fool that I am.

Finally, where are the residents who pay rent every month (which makes the community business an attractive investment) in the scheme of things?

It would seem to me that we have a vested interest in their view and input. By their inclusion and participation we have an opportunity to better understand each other. There can be no harm in that right? How can it hurt us to hear from folks who love living in their community? Love their home? Have positive stories to tell?

Another issue is the same bemoaning and complaining about government.

I am not advocating that all government is bad (or for that matter good). Instead what I am saying is it gets boring and irritating to spend a great deal of money to attend a conference where meeting after meeting all you hear is how this agency or group is ignoring us or being too tough or they don’t understand.

This all may be true, but it was my expectation that these obstacles were all part of the game and had to be overcome. Also, we don’t have the best track record and to think that the problems of our past are in the past and forgotten seems foolish. Of course the people who regulate us and legislate us have long memories. That is the way of the world.

Connected to that was the constant request for money to fund lobbying. I understand why the request is there, but why on earth would I consider doing that when we seem to lack progress in moving forward our agenda.

Also what is happening with our dues? Shouldn’t some of those $$ we pay support the lobbying effort?

In any case sitting in meeting after meeting hearing how our voice goes unheard why would I give money to folks who seemingly can’t get the job done.

I do think that local and national trade associations are valuable. They can be agents of change. But to be an agent of change requires one thing ­ the willingness to change.

Every month on this website, I read about legislation we hope to bring to fruition or regulatory changes we hope to have enacted. Then lo and behold I read about the failure to achieve those goals.

The definition of insanity is doing the same thing and expecting a different outcome. Do we

need a new association? I don’t know. Do we need to rethink what our association is, who it

represents and how it functions? Yes!

Otherwise we will keep the wheel churning, doing the same thing, making the same complaint and getting the same outcome. In short we will get what we deserve.

Insanity. ##

ImageCreditMHBGroup-postedIndustryVoicesMHProNews-com-

Image credit – is a composite from the MHB Group website.

Boe Davis
Vice-President of Sales
MHB Group and Mobile Home Park Magazines
1240 C Mtn View Alviso Rd
Sunnyvale CA 94089

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

October 6th, 2014 No comments

Tony,
As the national association serving as the voice of the manufactured housing industry, Tim (Williams) asked that MHI respond to your inquiry. Our official response is provided below.

Doug Ryan and CFED have been consistent supporters of manufactured housing and continue to recognize manufactured housing as an important source of affordable housing for low- and moderate income families, particularly in rural and underserved communities.

Unfortunately, they fail to recognize the valuable role retailers and sales representatives have historically played in helping consumers identify financing alternatives. Ryan's message insinuates the industry is somehow preventing consumers from selecting less expensive real estate-secured mortgage loans. He says, "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.”

mhi-logoAs the regulations are currently written—this is what MHI is attempting to fix in HR 1779/S 1828—the retailer cannot help the customer find a mortgage lender or inform the consumer of alternatives. The consumer needs the retailer’s help to become informed of the financing alternatives.

Today, a consumer might contact a dozen conventional mortgage lenders without locating a lender willing to assist them with a low balance mortgage. Prior to the CFPB Loan Originator compensation rule (CFPB defines sales commission from the sale of a home as meeting the compensation definition under the Loan Originator rule), a retailer representative could discuss financing alternatives with consumers including conventional mortgage lenders who offer low balance conventional mortgage loans.

Since the Loan Originator rules became effective, it has become nearly impossible for a retailer to assist consumers without inadvertently becoming considered a Loan Originator and becoming a covered person under Bureau regulations. CFED wants consumers to be informed of financing alternatives, but the people who have the best opportunity to inform them are effectively barred from having those conversations.

Ryan adds, “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 manufactured housing industrysupports legislation in all states to provide the alternative of titling manufactured homes as real estate where the home is sited upon land owned by the consumer and when financing is needed, the consumer pledges a first lien position in the land.

jason-boehlert-manufactured-housing-institute-(c)mhpronews-com-75x75-.gifJason Boehlert
Manufactured Housing Institute (MHI)
Senior Vice President of Government Affairs
1655 North Fort Meyer Drive
Suite 104
Arlington, VA 22209

Related Links:

1) – MHI's Response to CFPB's Report (Editor's 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) – CFED's Doug Ryan sounds off on Consumer Financial Protection Bureau (CFPB) Report on Manufactured Housing and MH Financing

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

    (Editor's Note: The views expressed by Jason Boehlert are his own and/or those of the MHI, 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 anIndustry in Focus Reportusing extensive comments from a range of industry professionals on this topic. Watch for it mid-week at the news/reports module link above.)

    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.)

    What More Can We Accomplish After This Year’s Manufactured Housing Institute (MHI) Congress and Expo?

    May 13th, 2014 No comments

    Like many others, I attended the 2014 National Congress & Expo two weeks ago in Las Vegas. I also chose to attend the National Communities Council Spring Forum held all day Tuesday prior to the opening reception. There were some exceptional programs! The attendance was very high according to reports from MHI. While there was an eye brow-raiser (or two…) on the agenda, off-agenda items that were pretty interesting and overall the Spring NCC Forum and MHI's Congress and Expo featured seminars with speakers focused on current industry topics and issues. Numerous vendors on hand shared their services, displayed their products and provided opportunities for deal making.

    What should not come as a surprise was the number of new individuals who attended the Congress.

    Many professionals from all facets of the housing, finance and investment sectors were on hand to listen and learn about the manufactured housing industry. This is another great indication on the positive future for the industry.

    Today, there is something in the neighborhood of Two (2) Billion Dollars chasing the manufactured housing industry! That's Billion with a capital B!

    Those dollars may or may not be invested in our sector; only time will tell. What we need to realize is that there is capital willing to invest and grow in manufactured housing. With new capital much can change, improve and set the stage for a brighter future of the industry.

    Yet, even with the large amount of new capital looking to invest in the industry, manufactured housing will still be a very small piece of the roughly One (1) Trillion Dollar annual U.S. housing market.

    The questions I continue to ponder are;

    • what can we do to grow the manufactured housing industry’s share of the overall housing industry?

    • How do we get to the root of the obstacles that continue to impede the MH Industry’s growth?

    Flying home after Congress and Expo, those nagging questions bugged me. Below is a thought that came to mind that may provide a profitable starting point.

    Why not host an – August 2014? – organizational networking/deal making opportunity event that is Trans-Associational?

    Why not consider a location near a fine newer MHC property that breaks the stereotypes – such as Saddlebrook Farms in Grayslake, IL – where the potential for new development could better be understood by those who only know the 1 or 2 star MH properties? Would love to hear suggestions on other possible sites that fill the bill.

    That property would also feature great looking, residential style product that is ground set, so this would shatter the 'mobile home' image for potential investors who only know the entry level product.

    As you can see, I am not suggesting replacing any current event, such as the upcoming MHI annual meeting, NCC Fall Leadership Forum or other association or industry functions.

    Rather I am suggesting something totally fresh and different.

    Let’s bring the stakeholders and potential investors to the table at the same time with professional facilitation and the opportunity to participate.

    The focus of the meeting would be how to get those multi-billions moving ahead, as well as advance the MH Industry as a larger and viable part of the overall housing market.

    What makes this concept different than other current programs is that interested parties are invited regardless of current relationship issues or biases. Bringing goal and solution oriented individuals from differing backgrounds, all committed to growing the manufactured housing industry could be groundbreaking.

    Please do not misunderstand; while I'd like to be involved, I am not volunteering to take the lead in this event due to my current business obligations. I am putting the idea out in this public forum for discussion.

    The way this gets done is for

    • commercial real estate brokers and appraisers,
    • commercial RE lenders and brokers,
    • MH finance companies (personal property and Mortgage lenders),
    • Any – or all – HUD Code manufactured housing and modular builders,
    • developers
    • Suppliers and other service vendors

    to pay for the costs of the meeting, mixers and main meals.

    Pick a place that is nice clean convention location, and keep the entry fee really low.

    Let's put an asterisks next to this one. What if we make it easy for the hundreds (or thousands?) of owners of MHCs who are looking to exit due to age, health or other reasons to come at a pre-event day to discuss their properties face to face with those who may want to buy them?

    Might this be a good way to facilitate the capture of more of that circling capital which would also facilitate the improvement of languishing communities and the sales of more homes in them?

    There also ought to be an ability for the event organizers to bar this or that person or group at will, so that the Ishbel Dickens/NMHOA or Industry naysayers don't get in. That keeps this focused on business and solutions.

    Just think about the number of organizations who would want to take part in an event of this nature. Here are a few who I believe would join the effort.

    rick-rand-industry-voices-mhpronews-com

    There probably are others who should be included on this list. These are the organizations that came to my mind while thinking about who the stakeholders are in the future of the MH Industry.

    One more critical point. Let's tackle the creation of a vibrant, efficient resale market for manufactured homes. This is absolutely critical for the future of our industry, the benefit of our residents and lenders as well as our homes' broader acceptance.

    By being trans-associational, this could also prove to be fertile ground for meeting with and recruiting new members.

    As to a target date, based on the interest being shown about the industry, sometime in the near term would be better than delaying. By doing it in the summer, a successful meeting could position the 2015 trade shows for dovetailing with this concept.

    The location must be close to a major airport so that there is easy access to the event. As noted, having some newer and older MH communities nearby would be beneficial so that participants can take a charter actually view the new homes and better understand the true breadth of the MH product and variety of community lifestyles.

    I believe that an event like this will assist in not only promoting the Manufactured Housing Industry but also could be a catalyst for additional new capital investment and future financing opportunities.

    We must not lose sight of a key goal of the meeting; how to advance the MH Industry as a larger and viable part of the overall housing market.

    Please feel free to comment below or email me with your thoughts. The future of the MH Industry is ours to create. ##

    rRck RandRick Rand is the president of Great Value Homes, and has been involved in small and large scale MHC operations. You can contact him at:
    Richard J. Rand, President, Great Value Homes, Inc.. 9458 N. Fairway Drive, Milwaukee, WI 53217-1321,

    414-352-3855
    414-352-3631(fax)
    414-870-9000(cell),
    RickRand@gvhinc.net

    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. )