Archive

Posts Tagged ‘Marty Lavin’

Free Trade or Economic War?

April 6th, 2018 No comments

Anyone going to school in the U.S. after WW II has learned the breakdown in world trade was a primary, though not only, cause of the Great Depression. It is said import tariffs and barriers caused world trade to be constrained. There is little doubt it was a cause.

I grew up believing it and have done so with little retrospective most of my life. As U.S. auto plants closed in the 1980s and forward (I was a GM dealer at the time), I blamed the unions, the workers, and incompetent auto company management. Whole swaths of the country from the Great Lakes to Maine back to the Mason-Dixon Line started to lose industrial plants, in the heartland of America. They became destroyed areas, bereft of jobs and hope. The bombing campaigns of W.W. II Europe couldn’t have caused greater damage.

FreeTradeOrEconomicWarMartyLavin475

Yet with the belief in free trade in the country so ingrained, we blamed the fallen for their fate. I was part of that crowd. It never occurred to me to ask if free trade was so good, why is its impact so disastrous for the U.S.? Not until recently, that is.

And surely our race for government control of every aspect of our economy led to manacled industrial results, especially in heavy industry. But I heard our technology would bail us out. Who needed autos, steel, aluminum and other smoke stack industries, what with their pollution and dirt? Not the U.S. Uhm, we forgot we needed their jobs.

This all played a terrible self-destruction to our heavy industry and their secondary affiliates. The politicians in power either didn’t see the developments, didn’t have answers, or didn’t care. We have seen recently how quickly our economy can respond when unleased. How hard was that?

It’s obvious that the last 30 years, especially our last 8 years prior to 2017, that one of the most important OleMartyBoy Principles was not understood by our heros in government: “You get more of what you encourage and less of what you discourage.” Simple, eh, but entirely overlooked by our government until last year.

YouGetMoreOfWhatYouEncourageLessofWhatYouDiscourageMartyLavin

I understand Free Trade means that each of the parties share similar rules as to access, tariffs, government industrial financial assistance and the like. Each of the parties is to operate in trade under similar rules, with shared understandings.

Still, the economic talking points by the media trumpet Free Trade, when even the dead and buried know there is little of it with many of our trade partners, especially The People’s Republic of China. That is the problem seemingly overlooked when media discussions center on the subject. Often the quoted experts are those who profit from trade, free or not, usually the finance contingent.

When a trading partner has rules heavily skewed in their direction, as in the case of China, it is very difficult to achieve free trade. Does each party have similar access to the other’s markets? Are tariffs similar? Are privately owned companies in the U.S. competing against government backed Chinese companies who can survive long after a privately-owned U.S. company would be long gone, and thus undercutting its pricing? And most importantly, does the other country operate in a relatively free market?

China has over a billion plus person population. It is a giant country that has been backward, isolated and extremely poor. Coming out of W.W. II, it had a puny, agrarian economy. Its communist dictatorship created a command economy. The U.S., as it had done with Germany, Italy, Japan, and non-communist Europe helped re-establish the shattered economies of these countries with trade. China, under the yoke of brutal Chairman Mao, spent much of the post-war period avoiding the U.S. and brutalizing much of its citizenry. Like all old men, The Great Prick, Mao finally died. A special place is reserved for Him in Hell.

The new generation of Chinese leaders decided their best bet to continue to rule the dictatorship was to open their economy to trade so fewer of their citizens starved every year. We now enter in the final phase of that stage in China. It’s emergence as a world power has been achieved by an almost capitalist drive for growth and trade. Now that fewer of its citizens are starving, it has turned its attention to waging an economic war on the rest of the world.

After the war, Germany sprung economically quickly, Japan following behind, then most of non-communist Europe followed suit. Ex-Communist Europe still struggles. China followed very slowly for years. Their agrarian economy, lack of infrastructure, large over-population, and strict communist control hindered easy solutions for China’s emergence.

But once going in the 1980s, to the present, they blew forward. And who became their greatest trading partner and deliverer of free technology they seemed incapable of creating? Why, good old Uncle Sam. Sam made many concessions to the Chinese to help them economically. In fact the emergence was so great, that the New York Times’ ace reporter, Tom Friedman advocated the U.S. should adopt the Chinese model for the economy. We saw how well that direction worked with the economic performance of Tom’s favorite President, Barack Hussein Obama.

I suffered thru much of the 1980’s when Japan, Inc. was running rough shod over our economy and we all believed they would easily control us. They were going to buy everything in America! Lost any sleep on that one recently? We sure did then. They were then the Asian powerhouse, akin to their speed in conquering much of South East Asia during the war, then unable to maintain their advantage against the U.S., just like in the war.

In Japan, the command economy stumbled badly in the 1990s and continues to do so. Picking many winners in the economy early boosted them, but command economies seem incapable of letting the losers die, dragging down all with them, by not cleansing by dying. The losers stayed alive with government help, as many do to this day.

Lying in wait in the Chinese economy lurks the same virus, as it does in all command economies, germinating even as we breathe. The trade deficit in the news is that China is enjoying a $350-$500 Billion-dollar annual trade deficit with the US and a $300 billion-dollar annual technology transfer as a gift, (actually by theft). Quickly, who has the most to lose in this transaction? China or Americans no longer able to go to Walmart to buy more cheap unneeded junk?

The economic talking heads making their living on Wall Street or Washington, D.C. care little about American workers displaced for years. Deplorables! Now the economic bigshots lament the possible trade war with China because it threatens their stew, citing the loss of cheap goods for us to buy. Where were these folks all those years as hard working Americans were thrown from their jobs, in places like Buffalo, Detroit and Youngstown, all dead cities. You know, “free” trade is a must, for the elites.

In this blather over free trade, the one thing I have never heard is that the actions of the Chinese constitute an economic war against the U.S., and has been since Nixon went to China. Dead soldiers, bombed cities, lost industry, and loss of fortune is the result of a shooting war.  They are easy to spot. An economic war is harder to see, but the results are similar; ruined cities, lost industry, citizen agony, broken dreams, destruction of the American economy.  We have been living with that. The results are easily visible. It does seem difficult to see from Wall Street and D.C.

This war is being done on the backs of our workers and industry, and our economy. The trade rules are not similar. Technology is stolen en masse. Their markets are often closed to us. They are very smart people and have been out maneuvering us for 50 years. How dumb can we be?

Even though they now have a first world economy, by choice they have a third world pay scale for their workers. This creates quality goods at a price our companies cannot hope to match. And between their lack of free trade and subsidy of the cost of their goods, how do our companies compete? The answer is obvious, we can’t. Thus this massive transfer of wealth from us to them, allowing them to continue their economic war unabated. This has built their new cities, airports, schools, roads and infrastructure to first world standards.

Their actions in the command economy injures their workers as well, keeping a massive economy acting like they barely succeed with worker earnings. But this action is getting pushback as countries wake up from their slumber.

I am running a contest. Thinking the talking heads will prevail, and we do nothing about the predatory Chinese trade practices, I am looking for a worker’s name. I want to know the name of the last American industrial worker, the one who turns off the lights in the last manufacturing plant in the country, just as it closes. Email me the name and the winner gets $100.00 and a video tour of Detroit. ##

marty-lavin-posted-on-mhpronewsMartin V “Marty” Lavin, J.D.
Burlington, VT
Winter Residence, Miami, FL

Editor’s Notes: Marty is a community, retail, and finance veteran who is an MHI award winner.

Note 2: The content is penned by Marty, but the illustrations are provided by the editor. 

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/

MartyLavinJDExpertWitnessTataroAwardWinner-NotEnoughHunger-IndustryVoicesMHProNews--500x365

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

DÉJÀ VU AGAIN? A New Manufactured Housing Institute (MHI) Initiative

February 16th, 2017 No comments

A New Study

I like to say to myself “If you live long enough, you’ll see it all.”  I have now lived long enough to see a second MHI effort to do “major consumer research” to “profile the housing needs and opportunities for the industry among various underserved homebuyers.” Who can forget the first effort?

Jeepers, I have no heart burn with the stated goal and direction of this initiative.  I think it possibly worthwhile, furthermore, we already have experience along this trail.  In the early 2000’s Drucker Worldwide, who is conducting the current study, was replaced by Roper International, in the first effort.  If the stated goals at that time were somewhat different, what was not different was the goal of gathering information by a consulting firm, Roper, create a report, then present a possible campaign to increase manufactured housing sales.  Sounds good, right?”

The Roper study was to be the linchpin for an industry image campaign.  Surely that was badly needed at that time, and still is.  What remains to be seen is whether the course of this initiative ends differently than the Roper effort, which ended badly.

Timetable

According to the study timetable set forth by Dick Jennison, MHI President, it will be a multi-step process; the study first, then present the research results to the members of MHI to determine “its next step is late-summer” (2017).  I must say that all sounds logical, practical and well-conceived, and very Roper-ish.  So far, OK.

RoperReportDruckerWorldWideMartyLavinManufacturedHousingInstituteMHStudy-PostedManufacturedHomeIndustryVoicesMHProNews628x230

As with all Industry Voices, letters to the editor, and op-ed posted commentary, the writer has provided their own text, while we as publisher created this particular image graphic, using the writer’s words and photo.  Differing viewpoints on this or other industry issues are welcomed.

For those of you out of swaddling clothes by the year 2000, the new study must send a chill down your spine and some involved in the Roper study, like me, might say a few more things.  There might even be a question or two.

Again??

First of all, quoting Yogi, this all seems like déjà vu all over again.  Others might say, we sure had a fun time the last time we did a study but will the result be different this time?  Some skeptics might ask, what has changed so much in the 10-12 years since the Roper study was concluded?  Finally, is the initiative once again the springboard to the fabled “Industry Image Campaign,” or headed to something else?  One wonders.

In view of the history on this thing, it is logical to be skeptical of the entire process.

I was very much involved in the Roper effort, which died an ignoble death, dealt a crushing blow to the industry (from which it hasn’t recovered), supposedly couldn’t be afforded financially then, and the industry condition seems even weaker now.

I would question, what is the goal of the initiative in terms of advancing the stated aim?  After all, when you find out from the public that the MH industry is the least liked industry Roper ever studied, where do you go from there?  And, what has changed since Roper reported these facts to MHI membership?

  • Have fewer communities closed since Roper, putting their residents on the street?
  • Have rent increases in communities been muted?
  • Has financing the home purchase become easier since Roper time?
  • Have loan interest rates decreased substantially on new MH home purchases?
  • Does the news media paint any glowing MH articles other than the standard “man have you seen those new trailers lately? They are gorgeous!”  I’ve been observing that one since 1972, with little positive response form the buying public, except during periods of loose/defective retail financing.  Too many sure went wild with that one.

Remind the swaddling-clothes-set that the last industry top in 1998, which saw 373,000 HUD Code homes emerge from our factories, led to the present incapacitated condition of the industry.  Heavy defaults erupted thereafter, leading to the disastrous industry meltdown which saw many portfolios lose all value.

It wasn’t covered in “The Big Short,” but bankers/lenders and government regulators paid scant attention to the MH debacle which could easily have predicted the lender use of the MH lending style on site-built single family homes was likely to create the same result as that which occurred with those highly distressed HUD Code portfolios. Oh, mama!

Yes, the results were similar in site-built mortgages, EXCEPT, that lending there is so much greater in volume that the only similarity was in the results.

MH Ugly and No Apology

Repossessed homes, financial distress, broken families, children leaving their familiar school, moving in with relatives or to a homeless shelter, loss of home, and huge, and I mean huge lender/investor/government losses.  No one paid attention to the MH meltdown, and too little was learned little from it. And no one apologized.

MHI has a mission to assist the MH industry to prosper.  Growth is certainly a key component of that mission, and if we are in a slight upward hump in sales now, in comparison to our pre-1998 performance, we are but a shadow of our former selves, down by 75% or so.

So why am I bothering to write this piece when my MH activity today is almost exclusively as an expert witness for law suits?  I’m asking myself the same.  But, I greatly fear we are in a glide path to Roperville II, the study-hard, but no-action paradigm of the last effort and various other MHI efforts.

Again, note that all the Task Force initiative participants, save two, are from homebuilders, again similar to the Roper event.  After all, having spent the money on the Roper study, when it came time to pony up the $17.00 to be added to each home section’s invoice built at that time, there was no buy-in from the builders.  To this day I wonder how the builders thought MHI was going to fund any image campaign if most of the money was not coming from a fee added to each home section’s invoice.

And so when the builders didn’t bite, or at least most of the important ones didn’t, the entire Roper effort fell flat on its face.  Great and expensive dog food, but when put down, no dogs ate it.

My Roper stuff went into hibernation in my stand alone hard drive, and there it sits, lonely, still wondering whether it could have done for us what the RV guys and gals accomplished with their GoRVing image campaign.  During the Roper initiative, we had a large joint meeting with the RVers, and they recommended we move forward in the quickest term, with our image campaign.  The RVers all said they’d be on their asses had they not moved forward.  As an industry, we are a little thin on accepting good advice.

Right Course/Wrong Course

In my mind, MHI, for which I worked very hard for 20 years to advance industry healthy, seems under attack lately.  Further, they continue to posit that the health and growth of the industry lies primarily in hat-in-hand visits to various government divisions.  The Duty to Serve/GSE initiate seems for the moment the Holy Grail for the industry.  A great deal of time and effort has been directed there.  At least the current Drucker Study is away from that direction, and for that I think it makes sense on some level.

Parenthetically, I might suggest MHI spend a great deal more time and effort in pushing the Section 8 program to help individuals to buy their HUDs.  I have believed this for years, ever since a very highly placed GSE person said at one of my industry meetings, “The industry needs to find a way to help so many of your financially fragile clients buy their MH with government help.”  After all, why pay Section 8 to rent a rat crap apartment, when instead these same folks could buy their shiny, new MH with Section 8 help.  How much better than an apartment rental is that?  A lot.

Task Force

Some industry builders in the Drucker Study are people known to me.  I like them and they are intelligent folks.  But, one concept that emerged from Roper is a deep seated belief in the industry that you don’t do anything to help your competition, even if it might help you.  And it was obvious in the Roper effort that the “don’t help competition” was alive and well in the final decision to let Roper die peacefully. And some held that adding even an extra dollar to the invoice could destroy the industry!

I strongly suggest that as this effort proceeds forward, if it does, MHI determine two things quickly:

  1. Are builders willing to take important actions to help the industry as a whole even if their competitors will benefit?
  2. How will this be financed and paid for should it move forward?

I know Mr. Jennison wants to show the MHI membership he is taking bold moves to help the industry, especially as he seems somewhat under attack recently.  But the last time the Roper Study cost some $250,000.00, or thereabouts.  Money the industry didn’t have.  How much will be spent now, and where is it coming from?

I want to avoid seeming negative on this whole Drucker thing, but that is the problem with old age.  When young and I saw a ball bearing rolling across a table I wondered whether it would hit the ceiling, walls or floor.  I didn’t know then.  Well, the ball bearing always hits the floor, I know that now.

Please, please

A final plea to MHI. The Roper initiative saw a final meeting where Roper presented some thoughts on the direction of the proposed media campaign, with actual T.V. ads.  This is what Roper did for a living.  Not infallible, but still they are the experts.

The meeting descended into enumerable people complaining loudly about the projected ads. They had far better ideas!  Individuals who spent lots of time widening their asses seated in lender’s chairs and others who spent their days walking dusty lots in white shoes and gold chains at sales locations suddenly became Doyle Dane and Bernbach, the international advertising network.

Please, please, if you get to the point that some sort of campaign is warranted to move forward, do not allow a room of 200 people screaming at the proposal.  Keep it in a tight group, such as the task force.  Let them make the decision.  Democracy is not a good application to this process.  It needs benevolent dictators. ##

marty-lavin-posted-on-mhpronewsBy Marty Lavin, JD.
350 Main Street
BURLINGTON, VT 05401
att’y, consultant, & expert witness
only in factory built housing
 

 

Dare’s 3 Point Plan for Manufactured Housing Industry Recovery

June 29th, 2016 No comments

TitusDareSVPEagleOneFinancial-PostedIndustryVoicesMHProNews-com-With apologies to MH Industry legend Randy Rowe and his 5 Point Plan for Industry Recovery – which is insightful and important reading – let me

suggest that what the Industry needs is a foundation that’s built upon a simple three point plan – which is really a 1 point plan – and everything else is a subset to that basic necessity.

Ready?

Education, Education, Education

James McGee and Chet Murphree said it very well on a video, its all about education. That’s sounds so simple, but they were correct, and its so true.

What keeps more lenders from entering the manufactured housing market? Education.

What does and has Triad Financial done so successfully for years to bring more lenders into the manufactured housing space? In a phrase, they’ve educated bankers and credit unions to the realities of modern manufactured homes.

The Three Forms of Education needed for MH Industry Recovery are these:

1) Public Education

Consumers must be exposed – educated – about the product.

This can happen at events, online, at a retail center, community, factory, visiting a friend’s manufactured home, etc. The more the public is educated, the better they understand our product and the more they will buy it.

The secret sauce for manufactured housing success is to attract and sell more credit worthy buyers, which in turn will cause the stigma to subside. As more millionaires and the mid-to-upper middle class buyers purchase a new manufactured or modular home, the more success the industry will enjoy in selling the entry level market that no one but manufactured housing can successfully serve without serious public subsidies.

EducationIsAKeyToProfitablyAdvanceManufacturedHousing-TitusDare-imagecredit-MHProNews-com

Editor’s note – All images on this page, save Titus’ photo, are provided by MHProNews.com as illustrations for his message, and were not sent by the author.

2) Outside MH Professional Education

Want More Lenders? Be it the GSEs, or others, education – not a sales job, education is at the heart of what’s needed. Educate them on how the existing industry lenders do it successfully. Do what Don Glisson’s team has done, or what I’ve been a part of doing in MH for many years.

Some 80% of HUD Code MH sales make appraisal, so 20% of potential sales don’t meet appraisal.

Want more appraisers to give better appraisals on manufactured homes? Then, you better help them get their arms around the nuances between the upper end homes and the entry level homes, underscoring the point that they are all built to the HUD Code and are safe, durable and energy efficient. Educate them!

Want more public officials to say yes to manufactured housing? Educating the public, and creating their demand for the product – while also educating local, state and national officials – educating each of those groups are essential. Each must be educated uniquely, but each form of outreach should take place at the same time.

Want more developers, Realtors ® and other housing professionals to embrace manufactured homes? Isn’t that also about education?

Make no mistake about it – the industry has to reach out to a myriad of other groups and professionals if it is to achieve its potential. But the rewards will be worth the effort.

Inside MH Professional Education

To sell more of the upscale buyers, and to convince more public officials, mainstream media etc. – all of those are educational efforts, that requires better motivated, informed and yes – educated industry professionals.

Some in the industry are truly forward looking. Others are hoping for a return to Conseco and Greentree days. The later won’t happen and wouldn’t work for long if it did.

For the Industry to attract new capital, we must prove we are educated enough ourselves to be thinking about ways so that everyone in the mix will benefit and win.

The win-lose days are over.

Further, you don’t usually sell a millionaire the same way you do that customer who can just barely qualify for the least expensive entry level house. You have to approach every prospect based upon their unique needs, wants, world view and expectations.

All of that and more are a matter of training, of education.

What Won’t Work

What’s clear is that manufactured housing endured over a decade of downturn, followed by a modest roughly 6 years of recovery.

We may have the best product ever, but what attracted those new lenders in the past and what attracted developers and other housing professionals to MH before was what appeared to be the opportunity to do volume and to do it in a profitable way.

MH was once one out of every 4 new homes hooked up to electrical service in the U.S. Today, its a fraction of that total.

We can’t tilt at windmills, we can’t cry over split milk, but we can learn our lessons. That learning…is education! So we can begin to educate our way back to success.

4S=SafeSoundSanitarySustainable-postedIndustryVoicesMHProNews-com-

In case you missed it, click the link above to see Titus’ original column on MHProNews.

Every step of what it takes to be successful in lending, which is critical for the advancement of this or any other big ticket industry, must be connected to those 4S I mentioned in my first column.

The news is breaking as I’m writing this today that YES! Communities is being pursued on a 2 billion dollar potential buyout. Whatever happens on that deal, we know that several billions in MHC transactions have already taken place in the last year. That tells us what we already know.

Manufactured housing has demand, because affordable housing has demand.

What did Frank Rolfe say on that video? People hate their apartments. Rolfe and his associates are growing because they understand a key aspect of affordable housing. Price and payment sells!

Exaggerating to make the Point

In truth, education, education, education is a key.

But there are subsets to that, where experts in lending, in developing, in production of HUD Code and modular homes, in proper installations, in safe transit, insuring, supplying, associations, legal minds and other experts all play a role. So I’m exaggerating education a bit to make the point.

Over the years, at educational events I was part of to promote manufactured housing lending and manufactured housing as the ideal source for affordable housing for potentially millions of people, I had the opportunity to meet all sorts of Industry pros.

I’ve mentioned Don Glisson Jr. and Rick Rand, but there was also the Claytons, Dan Rolfes, Lad Dawson, Marty Lavin, Dick Ernst, Phil Surles, Joe Stegemeyer and so many others I could fill this page with their names. Each one brought certain qualities to the table.

That’s what must happen again – bring together the best minds, to educate – and education is the best form of promotion that manufactured housing could possible offer for the future.

Is there more to do than educate?

You bet, and with Tony okay to publish it, I’ll gladly share that in a future column too. Let’s note that Tony and his team and sponsors have already started this educational ball rolling on MHLivingNews – educating the public and public officials, and on MHProNews by sharing the insights, interviews, comments, news and opinions that so many have on these pages over the years.

End the Fear, and the Growth Will Follow

One piece of the advancement puzzle is ending fear. Education overcomes the paralysis of fear, or the no that fears cause. State or national associations clearly have many potential roles to play.

Come on in the water is fine” won’t work when trying to get the FHFA, GSEs or anyone else to come to the manufactured housing table on doing long term chattle-style (home only) mortgage lending.

As a career banker and a true believer that MH can, and will, solve our housing crisis in America, I ask each member of this great industry to pull together and refocus the efforts of the industry on education, education, education for the next 3 to 5 years. I believe the results for the MH industry and all those involved will be astounding. ##

(Editor’s note – the headline was written by MHProNews, the contents of this message were sent to us by the author; we note that so that readers don’t get the impression that Titus Dare named himself in the headline! 😉

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

Marty Lavin’s Views on Seattle Times-BuzzFeed Clayton Homes VMF-21st Controversy

January 15th, 2016 No comments

Phew! After reading the Seattle Times news article on Clayton Homes and Vanderbilt Mortgage, I am reminded of a scene in the movie, “No Country for Old Men.” In it, the deputy after viewing a horrific scene, says to the sheriff, “That’s quite a mess ain’t it, sheriff?And he replies, “If it ain’t, it’ll do till the mess gets here.

I also read Clayton’s response to the article and that sheds some light on the matter.

As an example, anyone with rudimentary loan knowledge knows well that just because a person who is of color makes $100,000 per year and pays a greater interest rate than a white making $35,000 per year, that of itself is not racist per se. Lenders look at demonstrated ability and desire to meet loan commitments, which are not locked to income. The better the payment record, the lower the rate. That is what drives the interest rate once loan qualification is determined.

The article surely knows this as it is hinted upon, but it destroys the tenor of the piece about racism and unethical and unlawful behavior by Clayton, if revealed.

I do not know Warren Buffett other than what I learn in the media. I have generally been very positive on Buffett, though I am taken aback by his support for a president with obviously anti-capitalist actions and leanings. But then I am reminded Berkshire-Hathaway has many companies that could be brought to their knees by IRS probes, EPA investigations, and the like by an unfriendly president. Further, government can do things to you and for you. Above all, I think Buffett has not only been smart, successful, and ethical, he is also a pragmatic soul. You can’t do what he has done without being highly pragmatic, so I give him a pass on Obama support. 

Now as to Kevin Clayton, I personally know him, like him and hold him in high regard.

I have a very hard time seeing the Kevin I know supporting some of the racist actions described in the account. While there are too many incidents to overlook, I do not believe the people I know at Clayton/Vanderbilt would initiate or condone the racist behavior alleged in the article.

If for no other reason, the folks at leadership there are flinty-eyed businessmen, and they know that in today’s world a southern US company building and selling low-cost housing to many minorities and low income individuals will be rigorously regulated by government and the all-powerful non-profits. This is especially true when you are building and financing that old bugaboo, manufactured housing.

I do not sit in the Clayton/Vanderbilt board room. I have no “insider” take on this situation. My opinions hinge mostly on accounts in the media.

But I would offer this takeaway, were I to be asked. A company as large and important in its disliked industry as Clayton is, will be a target for strict compliance with every law and rule and if destruction can be brought about of the entity, so much the better. The rules being written by the CFPB and others are not only meant to regulate with ever moving targets, if it leads to business emasculation of the companies and the industry itself, few tears would be shed in DC and elsewhere. 

Some of the animus held against MH is deserved, and incidents as reported in the Seattle News story build on that animus. That is much of the tale here and the news account is prepared to report without revealing any details harmful to its tenor.

It does, however, leave unanswered the steps Clayton could take to create positive change in the organization. No matter how exaggerated the racist incidents regarding employees are in the news account, there certainly seems something is going on internally at Clayton/Vanderbilt. I’m not sure a mere denial is sufficient.

The employee to employee incidents of the type alleged must be ruthlessly quashed, little leeway given upon employee complaint, a quick internal investigation by experts at first complaint, and a quick decision based on the best information as to fault. Any superior allowing or contributing to such prohibited behavior gets one warning and fired upon the next, no matter who it is. This starts at the top and such behavior not only is illegal and wrong, it is poor business to allow it to happen, creating internal disharmony. It also leads to formal regulatory complaints no one wants to face.

Racist disrespect of customers or borrowers is even worse than employee to employee incidents. An employee has the option to leave a disrespectful business environment. A customer with a 20 year loan behind on their payments, struggling to meet them, needs to be handled firmly, but strictly within the law. Any collection supervisor allowing or suggesting disrespectful collection calls can not continue to allow such behavior from agents, and should it continue, warning and firing is the answer. Assuming Clayton is recording all calls with consumers, a sample listen-to of some calls daily will quickly reveal whether these allegations bear any truth.

Clayton is the wonder of the industry, wonderfully profitable in an industry little accustomed to such success. My 35 year familiarity with the organization has seen them as highly motivated, perhaps in the extreme, Kinda peeking out of the news account are people in an organization prepared to push the envelope to meet business goals or the keep their job, or even to avoid ridicule or censure.

Don’t get me wrong, I am a strong believer in firm performance requirements for associates, with rewards for successful performance, dislike of failure, with training and guidance to correct poor performance, ended by firing for continued lack of success or effort. But one senses the pressure to succeed seems to be driving some people to violate company procedures to reach their goals, even though the associate probably knows it is acting improperly. That’s too much pressure.

With the animus directed at manufactured housing by the media, government, the non-profits and regulatory statutory edicts, its dangerous to tread too close to news accounts like this. This can lead to the drip-drip-drip of continued news accounts, more regulation, more charges and the severe impairment of a company. Who wants to get to work with a rabble of protestors marching in front of the Maryville office with “Clayton Loans Matter” signs? 

Now that the media is chasing Buffett for answers, my fear has been that he would be so hounded defending Clayton, that at some point the $500 million in annual profits might seem like insufficient returns. I’m not sure that will happen or that it would have negative consequences for the manufactured housing industry, but I fear it could. ##


MartyLavin-JD-Attorney-ExpertWitnessManufacturedHousing-IndustryVoices-MHProNewsMARTIN V (Marty) LAVIN
350 Main Street
BURLINGTON, VT 05401
att’y, consultant, & expert witness
only in factory built housing

(Editor’s Notes: The above was first submitted in late December, and excerpts were quoted in the MHLivingNews report, linked below.

http://manufacturedhomelivingnews.com/lies-advocacy-journalism-and-statistics-seattle-timesbuzzfeed-attacks-warren-buffetts-clayton-homes-defends-charges-of-racism-and-discrimination-critical-analysis/

Some of the commentary by Marty Lavin that was not originally used – notably the notion that Warren Buffett might find the headache of manufactured housing too much to stomach, and then he may be inclined to spin them off from the Berkshire-Hathaway family of firms – was deemed in the editor’s judgment not necessary for the critique of Mike Baker and Daniel Wagner’s slanted report.

That said, since The Motley Fool has recently published an analysis that may be problematic in places, nevertheless it comes to a similar conclusion that Marty Lavin did days before. Namely, that $577 million in profits from Clayton Homes may not seem enough for Warren Buffett to want to retain MH firms in Berkshire-Hathaway.

MH Industry insiders may recall that Buffett spun off the MHC components of Clayton Homes after they purchased the vertically integrated company.

The Masthead Blog on MHProNews has drawn attention to MHI’s lack of response to the PBS NewsHour report, and to the Clayton Homes drama too. This was done after a source connected with MHI suggested to MHProNews that ‘five figures’ was spent by the association in the direct costs associated with the PBS NewsHour interview.

http://mhpronews.com/blogs/tonykovach/2016-louisville-show-previews-updates-on-media-clayton-homes-drama/

Note that top MHI staff, when asked by MHProNews about the amount of money spent on the reputation and media management consultants and the related PBS interview costs, declined to answer.

MHProNews again wishes to encourage MHI to speak out publicly on at least the PBS related negative media.

It should be noted that while many in the industry – from firms of all sizes and from state associations – are reluctant to speak out on these issues publicly, there has been a steady stream of private ‘thank you’ messages and calls to MHProNews and MHLivingNews for our leadership in presenting a more accurate and balanced view of The Seattle Times and PBS NewsHour takedown reports.

http://manufacturedhomelivingnews.com/what-pbs-newshour-missed-about-manufactured-home-living/

It should also be noted that Isbhel Dickens/NMHOA declined a public debate on the issues raised from the PBS NewsHour, and that Dickens linked the PBS and Seattle Times/BuzzFeed reports. The download of Dicken’s message, is found on the article linked here. It is insightful reading for a serious researcher on these issues, as it clearly suggests that this bad media blitz is all about the politics of HR 650/S 682.

Given that some Democrats are now calling on an investigation of Clayton Homes and their related lenders in the wake of this,

http://www.mhpronews.com/blogs/daily-business-news/democratic-lawmakers-want-doj-to-investigate-clayton-homes-lenders-in-wake-of-seattle-timesbuzzfeed-report/

it seemed timely to revisit Marty’s original replies, posted above. Marty Lavin agreed.

MartyLavin-JD-Attorney-ExpertWitnessManufacturedHousing-postedMHProNews-com-_001

Thoughtful industry comments on this topic or others, is welcome.) FYI, the full-sized version of the recent photo with Marty – is at the right. Updated with these pics at Marty’s request, so others can see just how terrific he looks wrapped inside that grand ship he and his bride Pat/Ava share, berthed at upscale Miama Beach. ###

marty-lavin-jd-manufactured-home-community-owner-on-board-spy-sea-2-22-2104

Marty Lavin on board the rear deck of their custom 70′ Italian ship, the Spy Sea, Miama Beach, FL.

Magazines and Birthdays

June 12th, 2015 No comments

I think around 2005 or so I was at the Wisconsin Association giving my latest Doom and Gloom prognosis for the future of our industry. (Actually my gloom was less than the future industry doom.) Amongst the many in the crowd was Tony Kovach (LATony to me), who took some exception to my pronouncements. He thought me wrong.

Tony was and is an industry booster of the first water, endlessly positive about the industry, the homes we build, the people in the industry, and its bright future. He could envision no malady of the type I forecast. To him the industry was just too needed for American housing to drop to the 49,000+ homes it ultimately did. And while I thought it would be bad, very bad, I did not believe shipments would drop as low as they did.

Tony recounted for me the same positive industry facts every time we spoke. I accused him of being a cheerleader and he always accused me as a half-empty glass kind of guy. Never mind that in 1998 my company originated $188 million of MH refinance loans. Surely that keeps a full glass outlook on one.

But 1998 was followed by 1999 which brought the first Hai-Karate face slap that things were in decline. What we didn’t recognize at the time was how much things had truly changed. This was not one of the frequent industry episodes so common to me since 1972, that you knew would come, make you drop your knickers, and then resolve itself, the industry regaining its footing at profitable levels. Not this time.

It took some time during this episode but by 2003 it was obvious to me, if not to everyone, we were in uncharted territory, with challenges ahead of the type unknown in the industry since its founding.

Since I first met Tony, much has happened. He and his family have become my good friends, I communicate with him frequently, and occasionally write or speak a piece for his publications, MHProNews and MHLivingNews. Spare no concern, the Lavin skepticism for the industry’s future has not infected LATony, he is an irrepressible industry booster.

He is the first to the battlements protecting the industry from unfounded and undeserved outside attack. He defends the industry from the regulatory overreach which unnecessarily hinders the industry, but more importantly, does harm to our client base, reducing their housing choices at a time when too few housing choices abound. That is tragic for all involved.

Tony has been quick to respond to these grievous conditions, leading the industry defense, in compliment at times with association(s) support and at times seemingly more effectively than the association(s). (Today the associations seem to have narrowed views, not necessarily spanning the interests of all its constituents.)

Ours is a small industry. It was far larger 20 years ago, but even then it was not large. At points during that time there were 3 or 4 industry publications covering industry matters. In my eyes the Manufactured Home Merchandiser was the pick of the litter, probably because both Tony and I were correspondents providing occasional pieces from us to further some industry topic we felt important.

With regrets, the Merchandiser  went the way of the dinosaurs, industry activity so low that the magazine ownership finally tired of subsidizing its printing and mailing. Regrettably, Herb Tieder, the publisher, could not be talked into going with an internet e-magazine, and the end came, at which point the Merchandiser had become a brochure, no longer a magazine.

Interestingly, Tony decided that there was a gaping niche to be filled with an MH e-magazine and brought his considerable energies to bear in forming the aforementioned e-publications. Like all new ventures, it took huge effort, trial and error, and serious dedication to get these ezines off the ground. At the same time he was expanding his consulting business, keeping Tunica going and bringing the Louisville show back from the coffin. All very good stuff.

Let’s face it gang, without Tony’s industry magazines we are pretty short of an industry-wide vehicle for thoughts, alerts, discussions, interviews and news. Tony also is fearless in taking on matters which offend, interest or challenge him.

Further, he solicits a wide range of views on many topics from many sources. Don’t agree with Tony on a certain subject, which can happen? No way he withholds his pages from your thoughts. Tony and I frequently diverge on viewpoints. That has never been a problem. He solicits my views though he knows like two paths in the woods, we diverge.

Tony is a young man, his magazines just coming into maturity, with enormous promise as industry news and education vehicles. He is to be highly complimented for his industry leadership with his e-magazines. But more importantly, as I age along to oblivion, I feel fulfilled that my prized Merchandiser has a worthy successor. Most satisfying.

This Sunday, June 14, Tony reaches his 39th birthday. Assuming a long, healthy working life, we have many years to look forward to his innovative and interesting magazines. Thank you, Tony, from me and I think from many others in the industry. Well done!

P.S. For you low information types, this year is also the 39th birthday of the HUDCode. Happy Birthday to the two of you. ##

marty-lavin-50-posted-mhpronews-com-industry-voices-blogMarty Lavin, JD.

 

(Editor’s note:  Tony Kovach passed 39 years some years ago, so that part is vintage Lavin humor, but the 14th of June – Flag Day – is indeed his birthday. And June 15th is indeed the 39th anniversary of the date that the first HUD Code manufactured home began on the MH production lines.)

Captive Finance Redux: Are you dealing with the Gestapo/NSA or Colonel Klink?

August 21st, 2013 No comments

Tony,
I've been delighted with the self-financing articles and feedback you have gotten on the subject. I've never doubted self-finance can be done properly, but that said, I don't think most can or will do it properly. Instead I believed the industry would often take the course many are revealing in your discussions; non-compliance, "I'll take my chances."

Interesting, but hardly surprising.

As I've written in the past, the various recent lending laws, federal and state, will and are having a demonstrable effect on the industry, likely to put the finishing touches on what little remains of the industry, reducing it even further.

Does this mean total death? Oh, I doubt that. Remember companies still sell buggy whips, not many, but they are still sold. As long as the industry continues to put people in homes who are not good at putting themselves in homes, a segment will remain. As will homes going on to owned land by those who trotted down to their friendly Hometown Bank, sat with their hard working banker and earned a loan for a HUD going onto their land.

Not many homes you say? Well, yes I agree with that. But some will still sell. Captive Finance will do some, but risky, unprotected self-financing will sell most homes. Is it illegal to speed? Yes, if you get caught. Obviously the same holds true for non-compliant lending.

There are few if any reports of originators of non-compliant loans being called to the gallows, or of loans declared invalid, (big deal in an industry with innumerable invalid loans), but, and this is the big one, still few if any reports of fines and crowbar motel residency. I suspect until the crowbar alternative becomes far more common, as with your various admitters, non-compliance will grow and perhaps even prosper. This leaves open whether in 1935 Berlin, oops, 2013 America, the Gestapo/NSA is checking the papers, or like Sgt Schultz, will see nothing. So far, they see nothing.

I have no doubt many of these offensive laws were carefully crafted to include MH, which leaves the futility of trying to change these laws to not include us as somewhat pathetic, but as an industry we still seek the get-out-of-jail card, which is in the deck right beside Marvin Place. These are both hard to get, kiddes.

So's, we's takes our chances, the "buyer" gets his desired home, the retailer/park owner gets a down-payment, resident, a stream of income and everyone lives happily after, until "innocent buyer" defaults and Illegal Aid gets involved, and reports the non-compliance to the massive Inadequate Buyer Protective Society. Then, the soggy brown stuff could hit the fan with the strong arm of The Man going full force against TrailerBoy. Ouch!

Can or will that happen? Well, yes it can, but will it? My 40 year experience with destructive retailer fraud on buyers was that it was little noticed by the authorities, it had to be BIG.

It remains to be seen whether we now will be dealing with Col. Klink or Buford T. Justice on non-compliance with this panoply of laws. For the sake of the MH self-admitted "misdirected," lets hope Klinky is still doing reruns and too busy to notice the industry's escape attempts.

But if it turns out these Alphabet Laws are actually enforced by Henrich Himmler's heirs, I'm not sure it is wise to be "non-compliant." Sometimes you have to admit the cards dealt are a very bad hand. It seems that way for MH and the spate of new lending laws.

I know one park owner who simply rents the home to the buyer for three years or until early default, which ever comes first. Once the buyer demonstrates a pattern of payments, he conveys the home, takes a promissory note not secured by the home, and hasn't found a big difference over his past experience with home sale with mortgage, etc. But he sleeps well knowing he might get his azz rumpled by the  borrower in this process, (so what is new?) but says at least at night he can sleep without the overhang of Att'y Gen Eric Holder visiting him for non-compliance.

Holder can bring those Philly Bad Guys from the voting place with their iron pipes to assure compliance. There is a true, Ouch! ##

marty-lavin-posted-on-mhpronews(2).jpgMARTIN V. (Marty) LAVIN
attorney, consultant & expert witness
Practice only in factory built housing
350 Main Street  Suite 100
BURLINGTON, VT 05401-3413
802-238-7777 cell  802-660-8888 office
Forget what people are saying, especially politicians. Instead, watch what is happening.” – Marty Lavin

 

Editor's Note: Marty's column is in response to these keenly read, linked articles:

Publisher Tony Kovach will plan a comment on this topic on the Masthead blog, to be published later on 8.21.2013

Interview with Marty Lavin, JD

April 3rd, 2013 1 comment

Marty, before we get into the meaty topics that will follow, let's establish your credentials for readers who may not know you and your background.

  • 1) MHProNews: Please tell us about your years involved in manufactured housing, including legal, as a community owner, expert on financing and any other. Include a sense of your MHC, financing and other business interests.

marty-lavin-50-posted-mhpronews-com-industry-voices-blog Marty Lavin:

I’m now 70 years old and I look back to 1972, when as a summer intern I entered the mobile home business. I was a junior in law school and was working at Ray’s Homes, who operated owned and franchised lots up and down the east coast, from New Brunswick to Florida.

For you youngsters, 1972 and then 1973 following it were the absolute pinnacle of the mobile home industry, reaching almost 580,000 shipments both years. At today’s shipments level, that is about eleven years of shipments, in each year, back to back. Those were giddy times, and predictions of 1,000,000 annual mobile home production seemed heady, but few seriously doubted it could happen, there seemed no barriers.

There were factories building homes all the way from some constructing them in their garage to the industry giants, Champion and Fleetwood or their compatriots. Time dims my full memory of 1972 and ’73, but not the excitement of those incredible times.

What it does not dim is that our sales organization was a national scope powerhouse, selling over 5,000 new homes in 1973. Think of that, almost 1% of all national sales, in one small outfit run by 3 people! I was proud of that then and still am.

What I remember most about 1972 is a time I was asked to go to a local land lease community owned by our organization. The community had about 214 homes in it, as I remember, a very large community in our small State of Vermont.

I was to field resident complaints. As I recall, a modest rent increase had just gone in and there was an uprising. I was to go up and quell the unrest.

I arrived at 5:30 PM, alone, at the community ballpark, and I met with 200+ very angry folks, and since they had been playing softball there were lots of baseball bats in the hands of the angry. Lesson: never attend a resident meeting alone with 200 angry people with baseball bats in hand. Actually a number of lessons came from that incident, which later served me well in both the MH Community and the apartment business. After all, the folks who inhabit apartments and MH Communities are not so different.

I came back after law school graduation and spent the next five years managing the legal affairs of sales lots, calling on banks for our service company, doing other legal work, and giving zoning presentations for MH Communities and strip shopping centers. Let’s say that the strip center zoning was easy compared with zoning MH Communities in most eastern states, as it was a serious challenge, even in the 1970’s. Always the endeavor was contentious, costly and endless, not a good business model.

By 1977 I became a General Motors dealer, selling Chevys for 4 years, then Oldsmobile and Cadillac for another 5 years. Sad to say, as much as I liked selling cars, I could not succeed financially although my sales were excellent, but profits, not sales volume sets the business paradigm, in cars or MH, and I fell short there. At the time the U.S. auto business was under serious pressure from the foreigns, and GM was already a doomed giant.

Back I went to real estate and the MH business.

From 1985 until 1995 I ran fast and hard buying communities in several states. As I remember at one point I was in George Allen’s top 75 list or thereabouts of community owners. These were communities I owned mostly on my own, few partners, just bank and seller debt. And of course, whether it is equity money from public subscription or money partners, or purchase money debt, they can all be harsh masters, and the vicious real estate depression of the 1989-1993 and the RTC (Resolution Trust Corporation) had us all in workouts. Most of my friends and partners declared bankruptcy. I thought that foolish, as it seemed unnecessary. Lots of talking and court appearances, but I got through it in spite of $55 million in debt, in 1989 dollars.

Rather than bankruptcy, my own course was entirely different. I chose to be prickly, but reasonable. Prickly, in that I could not be easily rolled by the creditor, and reasonable in that sometimes a property is not working, and it needs to go to someone with greater resources.

By 1988 I had formed an MH chattel loan service company, representing a large number of northeast area banks in originating loans, for home only, going primarily into communities. The general downturn of 1989-1993, with a steep decline in MH sales and lots of repossessions, stopped the service company’s climb to the big loan numbers. But they ultimately did come. In 1998, our company, Mortgage Services, Inc. (MSI) originated over 6,500 loans, totaling $188 million in originations. Those are big numbers in chattel loans by a broker. But as proud as we are of our volume, our record of clean paper without games, is a greater source of pride.

We originated loans for Vanderbilt, Chemical/Chase Bank, The Associates, CIT Group and many others. As one lender said to me a couple years after they left the industry and was running off the portfolio, “If every loan we bought were like yours, Marty, we’d still be in the business.” Satisfying words, indeed, in an industry enshrined in the Lending World Hall of Shame for Fraud.

We hung on with ever-smaller loan volume throughout most of the 2000’s, finally calling it quits after 2008, when we could no longer make money and my eyes glazed over trying to reinvent myself.

In 1999 or thereabouts, I was elected Vice Chair of the Financial Services Division of MHI, a two year assignment, which then leads to a two year assigned as the chairman of the Division. But, the industry was cratering so quickly, that the then chairman’s company exited MH lending, dropped out of MHI, and my term of almost 4 years as Financial Services Division Chairman began quickly.

In spite of an industry decline of frightening proportions, for many the reality had not yet sunk in. Mid-2000s shipments ranging from 125,000 to 150,000 homes, only with the grace of God who sent hurricanes and the industry built homes to house the dispossessed. But for anyone who could put it together, it was obvious: things in the industry were unraveling very quickly with scant hope of recovery.

For almost ten years I wrote a monthly newsletter, “Marty’s News and Notes,” commenting on the scene in Trailerville. What was obvious to me seemed less obvious to many. The industry was putting itself in an ever-shrinking situation and was not lifting a finger to try to save itself. The MH Image Campaign was endlessly pondered, but in the end, powerful industry forces that would profit by a weak industry joined hands with industry nabobs who to this day contend that our present situation is just an industry pullback, to kill the image campaign. Today, the industry has no ability to do any general industry promoting being too small to raise the money.

The highlight emotionally of this fading late 2000’s era was my dis-invitation from a community owner’s conference I was accepted to attend. My ideas of the industry decline, its causes, potential cures, and likely outcome were too radical. “Lenders could make money, they just got scared,” they said. They’d be back. I reasoned with even “good” MH chattel portfolios into land lease communities suffering over 30% lifetime defaults, lenders were unlikely to return, and so they haven’t. My one satisfaction since is that those who dis-invited me to the conference have of late finally grasped what I was saying over 5 years ago. Welcome to the party, even if belatedly so.

I very much enjoyed my assignment with Fannie Mae from 2003-2009 as their factory built housing consultant. I tried, as did Fannie, to bring some useful and survivable lending programs to the industry, but essentially they were rebuffed. To the end, the industry wanted to shuck and jive lenders to take losses in their behalf. I found the people at Fannie to be very intelligent and knowledgeable. They knew how to research a subject.

In many regards industry performance and industry attitude have never meshed. One would think an industry which had shrunk by 80% would go into bodies they were soliciting for help with hat-in-hand. Instead, bolstered by the industry shibboleth of “America’s Most Affordable Housing Form,” demands were more common than requests. That operating form continues to this day! I call it Pit Bull lobbying.

My proudest moment was in October, 2004, when my peers at the MHI Financial Services Division awarded me the Totaro Award of outstandinglifetime achievement to the division and industry. An award of this type makes one feel that all those meetings, flights, conferences and commuters, time consuming and personally expensive as they are, did not go unnoticed.

              

2) MHProNews: Tell us what you think the outlook is for us on the legislative or lobbying fronts on initiatives to modify regulations with the CFPB (Consumer Financial Protection Bureau) in Washington DC and why.

Marty Lavin:

One must look at the world as it is, not as one wishes it to be. Since the enactment of the Patriot Act in this nation, government found that they could pass very onerous and controlling laws, with relatively muted public outcry. In fact, the general public mood was that we wanted to be regulated. “Me, I’m ok and can be trusted, but that guy over there, let’s put him in regulatory shackles,” seemed to be the prevailing attitude.

An onslaught of rules and regulation ensued (Osama, you won, pal!). Many of them came as a response to the 2008 financial crisis, leading to an endless array of rules, regulations and laws. Nothing was left to chance. Endless government employees were hired to man all fronts. People not wanting to sit around in their government office with nothing to do, wrote their hearts out with rules and regulations. This necessitated a whole new group of people to enforce the laws, to make sure knuckles were broken for transgressors. Dodd-Frank and the Alphabet Laws ensued, and who knows what else (ObamaCare).

And what industries were targeted?

Well, all those mortgage lenders who had caused or appeared to cause the 2008 fracas. One would think the manner in which our industry had responded to being entangled by the regulation was that was they had “clean hands.” The industry acted as though they had not caused any of the lending problems which brought the regulations. Forget that from 1999 until 2005 or thereabouts, millions of MH homeowners lost their homes to the depredations of our sellers and industry lenders and the highly flawed portfolios they originated. “But we gave them a chance for home ownership,” was the industry refrain. Some chance, when portfolios were originated with well over 50% defaults.

This led to many problems for the lenders, but the primary losers for those bad portfolios were the homeowners, and the investors who bought the portfolios, just as occurred in the 2008 mortgage disaster. In the MH 1999-2005 loan meltdown the plight of homeowners with lost homes, lost jobs, divorces, financial problems, moves for other housing and the emotional distress it caused seemed unreported and without concern by anyone. But did it escape the gaze of the regulators?

When these things occurred in the real estate lending meltdown of 2008, the scope was so great and consequences so extreme, that homeowner plight did not go unnoticed. To the contrary, many undeserving homeowners were given breaks they did not deserve. Little of that occurred in the MH debacle.

The CFPB arose from that wellspring; Chattel loan shenanigans led to homeowner/borrower consequences essentially identical to the mortgage mess, so why treat them differently? To say nothing of the industry reputation for loan fraud, and dealing with many financially fragile people who were not viewed as able to protect themselves.

Don’t misunderstand my drift; I’m simply reporting what I see as the motivation for the formation of the CFPB, and by extension, the prospects for any serious changes in their rules and regulations.

Were I sitting across the table from industry lobbyists, in the back of my mind is the knowledge that exempting the MH industry from these rules is loosening the grip on an industry who hasn’t acted as though their past lending was fair to the consumer.

Yes, as the industry claims, a few more homes might be sold if rules were relaxed, but the CFPB rules and regs do not by themselves stop a 580 FICO buyer from getting financed. That’s a self-sustaining process by industry lenders for the moment. But it might protect the 660 on up FICO MH buyer from some of the known operating defects from which the industry has suffered. That’s the thinking the industry faces in seeking changes.

So, what do I think the industry lobbying efforts will gain as to the CFPB? I seriously doubt that any meaningful loosening of regulations will occur as making the case for it is not easy. At best, a few more homes could be sold and financed to responsible buyers, but regulators do not see loosening regulations which simply allow people at the bottom to “buy” more MH, and suffer a high loss of homes. And that is what the industry seeks, at its heart. My advice, onerous as the regulations are, learn to live with them and take advantage of a new competitive factor introduced by CFPB. Master the requirements and get a leg up on those who will not, of whom there appears to be many.

3) MHProNews: What is your impression of the working relationship between various industry associations, HUD and the DOE?

Down through the years I have known both sides of the continuing lobbying drama. The industry wants this and that, most of which conflicts with the regulators desire to control the industry and protect the consumer. We now have a history of going at this since the late 1970’s, without any magical results for the industry. It has recently become a highly regulated industry which heretofore, though the industry viewed itself as highly regulated, it was not. That changed. Welcome to the new America where regulation of all stripes holds sway.

Of the major industry associations, MHI (Manufactured Housing Institute) has been the compromising industry element. While individual members have been combative, the association has tried to be firm, but compromise has not been unknown.

The other group, MHARR (Manufactured Housing Association for Regulatory Reform), has catered to the industry segments which feel we can go toe-to-toe with industry regulators and have our way with them.

I think if we took a long and serious look at the actual achievements of both associations, the record reveals little success by the pit bull faction, and some, though limited success from the compromisers. But what would we expect from an industry whose main claim is that it is America’s most affordable housing, when government now finds non-profits or developer-required low-income housing as the better vehicle to deliver affordable housing, not the MH industry. The industry has become suspect, and that is at the heart of the regulations, just as it was with the mortgage industry which brought on their highly increased regulatory burden.

I’ve written at some length in this publication in the past on this very matter of the associations, and a view of that might shed even more light on the subject as to my thoughts on our associations and their operating style and effectiveness.

I do not want to leave this matter of lobbying without speaking to the state associations.

All during my 40+ years in Trailerville, I’ve dealt with them. They have many very talented people involved and members can really get involved without the major time and money cost of national association meeting attendance. Some belong to both, but at my speeches at various state associations I met many I never saw in Washington, who obviously were very involved in state matters. Their record of storming the state capitols to seek redress shows how effective close relationships can be. We see an effectiveness locally we simply do not see on the national stage.

Locally we may represent a strong voice listened to. Nationally, even when we had a fairly strong PAC $$$$, we were a minor player in most regards and were treated as such. Today with our PAC having the same money as the allowance for an 18 year-old, we don’t get too much respect or time.

In most states, with strong associations, getting into the halls of power and talking with a regulator or politician who is a personal friend of yours yields excellent results. Would it be this action was transferable to DC. But in DC relationships seem to hinge on $$$$$.

4) MHProNews: What do you think would help the industry's working relationship with regulators?

Marty Lavin:

The industry needs friends. It has few if any in government, and none I know of in the non-profit world, which takes an ever greater share of attention within government. As we’ve seen repeatedly, at all levels of government, a few loud critics, especially from non-profits, have enormous sway over board and regulators. Meanwhile, everything we say is questioned and mostly disbelieved.

Long have I encouraged MHI to join folks like AARP, who is a serious critic of the industry, in trying to resolve issues between us.

Is the water too poisoned to join with various non-profits? Perhaps, but if we can work with them on specific issues, powerful forces could be unleashed on our behalf, which would greatly enhance our clout with government. Against us they seem to be prevailing. But we must get past the ingrained industry belief that we do no wrong and do not need to change or compromise.

By ourselves, in an essentially buggy whip industry (fading), I do not see the regulators doing anything we request, save at the margin. And any slide back from regulations will quickly be rescinded as soon as industry infractions occur once more. History tells us that will happen quickly. Just look at the number of industry people trying to slide around the numerous lending regulations now hung around our necks.

5) MHProNews: What do you think would be useful in having a positive impact on our lobbying efforts for modifications in Dodd-Frank with Capitol Hill?

Marty Lavin:
I fail to come up with any positive, easy solutions to our problems, heaven knows I tried. The industry reputation of “bad-actor,” who treats consumers unfairly, who closes communities to sell 150 families out so a Wal-Mart can be built, who champion chattel lending where very financial fragile people have high default rates in communities, who raise rents endlessly, have led to not only Dodd-Frank, but to highly restrictive zoning laws, rent control laws, and a myriad of lending and non-lending regulations. These have help squeeze the life from the industry.

But let’s confront the real culprit for the fall from 580,000 homes in 1973 to the 50,000 range today, even as population has increased by 50% since 1973.

Listen intently here, Junior, it ain’t the regulations which plague us.

It is this simple fact, like it or not: Chattel lending to the average customer drawn to our product is not sustainable because of high default rates and the attendant high loss upon resale of defaulted collateral.

I needn’t remind you this is a complex, intractable problem at least for now, and solutions are extremely elusive. If lenders lend only to those customers likely to default at less than 20% lifetime rates, then this is a small industry, as we now see. If lenders follow the lending regimen of 1960-2003, then defaults will lead to huge lender losses, even as sales soar, for a while anyway.

Since the ABS MH meltdown of the late 90’s and early 2000’s, lenders are aware of this fact. Sad to say, after innumerable industry meetings, I note only our lenders seem to appreciate this fact. The rest of the industry seems unconvinced, not wanting to be confused by the facts.

Thus the present extreme caution in lending, as even six months of lending error will likely bring an enterprise down, results from the reported facts of the ABS era. MH Lenders have decided that it will not be them who subsidize the industry through loan losses.

The GSE’s were probed to take over that role and even though they did so with real estate mortgages with disastrous ramifications, they refused to do so with MH.

HUD/FHA through its lending programs has always been probed to have them assume that role. Once the 50 year lender subsidy of the industry was withdrawn, reality set in as to the real size of the industry. Not the 1975 to 1999 trend line of 250,000 homes annually, but a mere 50,000 home shipments per year, was the real size.

And even if the hurricanes run wild again, will government turn to us again for homes?

That leaves only government-subsidized loan losses in order for the industry to be able to return to those golden 250,000 annual home shipments. So far every government agency has refused to do so, especially after the losses suffered in the Title I, Chattel Loan program, which the GAO report demonstrated was a serious loser. No one wants to be our bitch.

I dare say that the loan losses and its connection to industry size were well recognized by some by the late 1990’s, when I heard a senior GSE official say that only with government subsidies could the industry succeed once lenders retreated. That hasn’t happened. I was gape-jawed at the time, but how right they were!

So going to Capitol Hill on Dodd-Frank almost seems like deck chair moving. Let’s suppose all Dodd-Frank and other new lending license requirements were repealed, does selling self-financed used homes to 580 FICO borrowers save the industry?

I think not and clearly stated as such years ago when an industry scribe was waxing eloquent about the potential for self-finance to save the industry. It is not going to happen for a variety of reasons, and I told him so as well. It may help some individual organizations, but the entire industry? Yeah, right.

6) MHProNews: What closing thoughts would you like to leave with industry readers today?

Marty Lavin:

Tony, in those dozens of “Marty’s News and Notes” I wrote in the 2000’s I proposed many changes in the industry operating model I thought would help. Of course, most all of them were unenforceable, were likely to be violated by many, and some were deemed to make industry action more difficult, as though if not enacted the industry would get better and easier.

The Image Campaign was an excellent example. After Roper Associates polled the public on industry public perception, their report to the industry said that in their 30+ years of polling, no industry had been so poorly perceived by the public and their customers. This was strong incentive indeed for an industry seeking to refurbish itself. We did nothing. So they don’t like us? Who gives a rat’s azz?

Regulators deal in the real world. They read the newspaper account of another tenant revolt in a community after a rent increase. The photos of another community closing with pathetic people having to move a worthless 40 year old home to another elsewhere and not having the resources to do so can’t help but move the public.

Not our problem you say? Perhaps, but our regulators and critics wield their dictatorial power against us, even as the industry seems oblivious to it. And like the drip of the Chinese water torture, little by little our operating style has gone out of style. Yeah, but dick-head, we are moving to create green homes! That will help.

In spite of everything I’ve said in here, let’s zero in on the most important fact I can remind you of today.

Like the stock market which is a market of individual stocks, this is not an industry, but an accumulation of individual opportunities, all revolving around a factory built home.

There are plenty of players surviving, even flourishing in their own endeavors.

It would be nice to have a strongly growing industry to help business, but the industry has shrunk enough, shedding many enterprises, as it seeks its new level. Some elements, like the communities, will likely continue shrinking as the cornfields which became mobile home parks courtesy of crazy lending, revert to cornfields.

You know that from those endless real estate broker-sent emails asking for offers on troubled properties, with 50% occupancy, almost all of which are owner financed homes. Mercy, Jesus…

Don’t plan your business around Dodd-Frank, or SAFE or CFPB being modified or overturned. The chances of that are slim. Pay attention to your own unique niche. Follow the rules, stay out of trouble, and meld business needs with empathy for your buyer or community resident. Become the “good guy” in a sea of others.

Hard as it is, do the things required by law if necessary to succeed. If the laws are overturned or modified, you can quickly revert, but you are wasting time trying to battle what is in place now.

Know that GreenTree Financial is not returning and the industry lenders, few as they are, will not become GreenTree. Don’t worry about that rumored 580 FICO industry chattel lender coming to the sales lot close to you. It isn’t happening. And if it does, keep those bottom right drawer loans denied by everyone else flowing to it quickly, as the life expectancy is about three years.

Nothing is likely to change. Partner with your local hometown bank(s), protect them, and reap the rewards that can flow from that association. Make your plans based on increasing regulations, not less. Your ability to operate easily in that regulatory environment will be the key in the future.

Finally, the hot button of this moment; titling what has historically been personal property as real estate, that is the home-only, even in land lease communities.

I first bumped into this around 2004 at a meeting of land lease residents and non-profit employees who ran the communities. This was described as the new panacea, after all, we know how secure real estate secured mortgages can be, especially with sub-prime lenders and borrowers. This change in titling protocols would fix everything for the homeowner.

Then about 5-6 years ago a law professor from the University of Minnesota contacted me to discuss the concept. She was writing a law review article on the matter, as I remember, and had liberally quoted a lot of my written work. Very complimentary. I will tell you the same thing about titling personal property homes as real estate by fiat as I told her. You can do it by law if you chose to but to what end?

Presumably, doing this well-intended move is a desire to remediate the whole purchase, default, repo resale process. That process entails two issues: first the incidence of loan defaults, or what percentage will default, and severity, or how much money will be lost on the repossession and resale of the home. With broadly expansive chattel lending, these two have plagued the industry since the very first, and by extension, plagued the homeowner.

Of course, if by fiat one can entirely change the character of an item, I am all for it. I would start by declaring Martin V. Lavin as a young, handsome, vital man instead of an old, ugly, tired man. Well, of course logic tells us that in both the home and the man, the declaration by fiat of something it isn’t is doomed to failure.

Don’t let that hold you back. Perception is reality. Remember, put a tooth under the pillow and the good fairy comes.

The refrain always is; it works in New Hampshire, why not elsewhere?

This is a refrain that can only come out of a mouth of someone who hasn’t been in a three year old home which has gone into default, the home has been owned by uncaring people, the rugs stained, the appliances and furniture taken with the former owners, and during the repo period, neighborhood kids stoned all the windows and took a dump on the floor in the bathroom. They missed the hopper.

I’ve been in those homes, often located in a community with very substantial home vacancy and the owner just loves those substantial, frequent rent increases. So why does it all work in New Hampshire and a few other states as well even without real estate titling? The key to low frequency and severity hinge, on several factors:

  • High home values in conventional housing in the area
  • A relatively tight area housing market
  • A home placed in a community with low vacancy
  • Landlords/community owners who exercise rent increase restraint or rent control
  • Low numbers, if any, of community-owned homes

New Hampshire has most of these factors. Take away the vaunted “real estate” designation and do you think the MH market in New Hampshire would noticeably change. I think not.

Alternately, go to rural Alabama or Mississippi and go into some of the typical communities there, which do not share the factors above enumerated and do you think that real estate titling will change anything? “Hot damn, my trailer just became a mansion by the new law passed,” said Johnny Hayweed. All I can say, is if passing a law which says that chattel is real estate is all that is needed to correct frequency and severity, bring it on! Do you really think that is the answer?

From the recollection I have of dealing in New Hampshire financing years ago, the process was more onerous than a simple chattel loan for whatever that means. On the positive side real estate financing brings with it a number of borrower protections that pure chattel transaction have not always enjoyed. I’m not sure that with all the Alphabet Laws plus Dodd-Frank that protections on pure chattel transactions are now lacking.

But again, it doesn’t really matter whether this move has any particular merit or not, get your throat ready for the shove-down, its coming. And who is pushing it? Why the aforementioned non-profits, especially the Ford Foundation and its many allies. You know, the people the industry has failed to engage and who are now calling the tunes. Wake me when it’s over.

For the record, I still own a manufactured home community, remain comfortably retired, but keenly interested in the manufactured housing industry. And I still get an occasional consulting and expert witness assignment. ##

(Photo Credits: Supplied by Marty Lavin)

(Editor's Note: As with all of our Industry Voices guest articles and other featured articles, the opinions expressed are those of the the writer, or in this case, of Marty Lavin, JD, who thoughtfully and candidly replied to each of our questions. A careful look at Marty Lavin's thoughts will reveal that this is not pure 'doom and gloom,' as he points out exceptions to the rules that he has witnessed. We at MHProNews.com welcome posted comments or reply columns on this article and encourage similar or differing points of view. You may submit a guest column with the usual editorial guidelines to us by email. Use the words Letter to the Editor or Industry Voices Guest Column in the subject line to: iReportMHNewsTips@MHMSM.com or latonyk@gmail.com Be sure to ask for a message confirming your submission, thank you.)

Dying to tell the Truth

July 2nd, 2012 No comments

New York Times Columnist, Tom Friedman,  wrote a thoughtful column about the hard truths leaders around the world seem unwilling and unable to tell their own citizens.

Citing problems including the “global credit crisis, the jobs shortage and the need to rebuild Arab countries from the ground up,” Friedman writes that their solutions require “extraordinary leadership that has to start with telling people the truth.”

Unfortunately, Friedman concludes, “that is not what we’re seeing from leaders in America, the Arab world or Europe today.”  A shame, says Friedman, because telling the truth is not only the right thing to do but it also binds people to you and results in their own positive action.

Smart, seasoned gents, like successful manufactured home community owner, attorney, finance expert and consultant Marty  Lavin have been telling us for years: 'MH, we are dying.  Wake up, smell the coffee and take the cure.'

One of Marty's many columns on manufactured housing is linked here.

Marty Lavin has communicated in part:

  • some will make money,
  • we may see FEMA,
  • oilfield boom related or other upticks,

but as an industry we are dying.  Marty has written for us at MHProNews.com, not because he was looking for a new client, but rather because he cares enough about the industry to tell the truth as he sees it.  That's a giving-back form of leadership.

Last year, IBISWorld named MH retailers as among the top ten dying Industries in America, along with:

> DVD, Game & Video Rental

> print publishers

> photo finishers and others. 

Maybe someone with an MH factory may think, it is a shame, but that's ok, I'll sell to communities or developers.  Maybe someone else reading this owns a community and thinks, that's okay, I still have 70%-80% physical occupancy…

…but the point is that if we fail to think of appendages of our industry as important or of value, we could in fact lose even more of the Industry in the process.

Ladies and gents, whatever you do in MH – even if you are profitable – there are warning bells that call for rapid change.   It's great that we've seen a 9 month rise in shipments, but to make that rise long term, business people like yourself will have to take concrete steps, or risk their future in our industry.

Until you fix – at least in your firm in your market(s) – what 's wrong in manufactured housing, sooner or later, you and your business will go the way of the buggy whip.   Who says?  Smart guys like Lavin and others.

Not because we don't have the best housing value in America, but in spite of that fact.

Until we get to the root cause of our issues, we may see bright spots here and there, but overall, individual businesses will be faced with decline.

There are reason why Tony and his team of expert writers and sponsors have built the largest audience of its kind in the industry.  A key part is telling the truth.  A willingness to put the facts or opinions out there, and openly take public or private comments from readers.

When a mistake is pointed out on MHProNews.com, guess what Tony does?  He corrects it, thanks the person for pointing it out.  With thousands of pairs of eyes on his pages daily, that’s a rare form of transparency and accountability. ##

 

Posted for

Tim Connor

Marketing & Sales, Website, Advertising and MHSpeakerTrainer.org Manager

MHProNews.com = The MHIndustry's #1 News, Tips and View you can Use © resource.

MHLivingNews.com = Free resource to enhance MH HomeOwner Satisfaction and MH Image Building

See some of our client Testimonials here

Connect with me on LinkedIn, send an invite to connect to:

Tim@MHMSM.com

704-895-1230

The Emperor has no Clothes

August 21st, 2011 13 comments

There is a lot to say about what has gone wrong with our country and our Industry.  We will begin ‘at the top,’ with our Chief Executive, President Barack Obama.

What’s up with Obama’s recent bus tour?

I’m no fan of the prior president, but say what you will about President W, when he took a similar bus trip to President Obama’s, W used campaign dollars to pay for it.  Where is the “watchdog” media? Why no hue and cry when the administration buys millions of dollars of Canadian buses so President BO can tour in style on the taxpayer’s dime?

What’s up with all that?

Isn’t it ironic that BO tours campaign style after lecturing millionaires and billionaires about private jets and corporate perks?  Or is that rhetoric just a way of getting the votes of middle America and ‘the little people?’

Do you like ‘divide and conquer politics?  To me, it is plain wrong.  Talk about issues, talk records or about facts.  But don’t pit one group against another.

I need to be clear that W vacationed considerably more than BO.  But W went to his ranch or Camp David, etc.  But to add irony to injury, on the heels of all this bad economic news, BO is in Martha’s Vineyard – the haven of the elite – now?

Even left wing commentators see this vacation in the New England playground of the rich and famous as a problem.

  • Experts and government statistics suggest we have 17% unemployed and under-employed.
  • We have more people on food-stamps and welfare than at any time in U.S. history.
  • And BO will give us his ‘next’ jobs program in September, after his resort vacation?
  • Where are all those shovel ready and other jobs from the ‘first’ one?  Or were all the jobs ‘created’ at the job killing CFPB?

They say the emperor has no clothes.  Well, we have no emperor, but a president and his wardrobe looks just fine.

Ascendancy and Dependency

It is the party of dependency that is still in ascendency.

Or at least still in high office…

…dependency is a major voting block today.

Be it government labor unions, federal jobs or those on government assistance, it is an issue.  We have to put people to work, not get them used to no work. We do need federal and other government jobs.  But we can’t give everyone a job regulating someone who is working to produce a product or a service that keeps America’s wheels turning.

If we do not change our ways federally and locally, we will look like rioting old England some day, because we can’t afford to keep adding to our debt and taking on more programs that fail to foster independence.

While we have plenty of dependency programs, meanwhile, we have

  • flash mobs that form, rob, harass and harm others in our cities.
  • We have automatic weapons fire along our southern border.
  • We have three wars we are involved in instead of the previous two.

I didn’t favor W taking us into Iraq, nor do I favor BO taking us into Libya.  Even if we ‘win,’ what have we won in either case?  We spill American blood and treasure, for what?  We can’t be the world’s cop, and we can’t have wars for the sake of foreign oil, etc.

Let’s drill and do energy on U.S. soil and off U.S. shores, as safely and prudently as possible.  Think about the major jobs creation potential.

Private enterprise can pay for it all without federal dollars.  Let business people do business in America again.

Another Recession, whats up with that?

The media speaks of double dip recession.  What’s up with that phrase?

Did anyone notice that the ‘great recession’ never ended?  Did you notice that the housing markets still suffer, and Keynesian/Euro socialist economics just added trillions to our debt without giving us a stronger economy?

No jobs.  No stimulated business.  Tougher lending.  Very little respect overseas.  Where is the change we can believe in?  Or was that supposed to mean the pocket change we have left after taxes?

Third part candidate George Wallace once said there wasn’t a dime’s worth of difference between the two major parties. Thus Wallace favored what some have for years, a third party to bring America back. But Ronald Reagan had it closer, we don’t need a third party, but a rejuvenated second party.

That means we don’t need Rino Republicans, Republicans In Name Only.  To me, W was a Rino, socially conservative, but nearly as much a man about big government as BO is.  W helped give us that darn bail out of the bankers.  W took us into two wars with no end in sight.  W’s dad may not have “finished the job” in the first Gulf War, but he had the smarts to get in and get out.

We need business friendly independents, Democrats and Republicans.

Businesses create jobs.  Jobs are what American’s need, and then they can start buying houses again!

Speaking of jobs, how about creating 20 million new ones?

I’ve read the same reports you have; that there are two trillion dollars of investment money on the sidelines – actually overseas – that could be brought back to the U.S. In short order.

But that 2 trillion fled America due to regulations and tax policies.  Do we have the political will to bring those trillions back?

Think about what Two Trillion Dollars we don’t have to borrow, or write down, would mean to our country right now.  If every $100,000 invested created only 1 American job, that would mean 20,000,000 jobs.

Think: 20 million people off aid, off food stamps, off unemployment or other government programs.  2o million more taxpayers.  Think 20 million people less dependent, means we would be that much closer to a balanced budget!

We better find and support candidates in whatever party who know how the free enterprise system works, because creating jobs by supporting business is what we should be about.

Free Enterprise, not Keynesian/Euro socialist economics, is what made America the land of the free and the home of the brave.

November 2012 is shaping up now.  Who we support now for our state houses, or for Congress, the Senate and the White House will be on the ballot 15 months from now.

Personally, I’ve contacted my senators and representative and made my feelings known on economic and social issues.  But I will also make them known on the path to election 2012.

Give the man his props

One thing that our recently bus touring and now vacationing BO has done is give us an executive order we can believe in.  With all due respect to Marty Lavin, Danny Ghorbani was the first to bring it to our Industry’s attention.  We speak of Executive Order (EO) #13563, similar to President Clinton’s issued in 1993.

MHMSM.com posted EO #13563 months ago, that requires an examination of regulatory impact and its benefits.

MHARR is right.  HUD’s budget has grown, while our industry shipments have shrunk.  What’s up with that fact?

What the president – at least on paper –  has done is give us EO#13563 which could hold HUD and other regulators accountable.  Now will our national associations use that to our Industry’s benefit?

The Fall Congressional hearing on Manufactured Housing

Ooops.

Who do we have in DC “helping us” in the planned fall Congressional hearings on our Industry?  Congressman Barney Frank.  What’s up with that?

Let’s see.  Barney helped give us the SAFE Act.  Barney also gave us part of the name of the bill that in his: Dodd-Frank.

So do you feel safer or dodd-franked?

With friends like Barney, does our industry need any federal enemies?

Who is watching how our industry PAC money is spent?  Is this the type of anti-business candidate we need to support?

Where is that change we can believe in?  Or did I drop that change the last time I filed my quarterlies?

One of the best meeting planners around, but…

I asked Tony Kovach why George Allen’s Roundtable was not on the MHMSM.com calendar.  “George isn’t an association, and he opted not to pay for an ad.”

Maybe there is considerable momentum from last year’s event that MHMSM.com did promote.  I noticed that Allen is reporting more state association executives coming to the Roundtable this year.  State execs are often ‘comped’ for coming to an event.  George is one of the best self-promoters the Industry has seen in the past 2 decades.  I’d want state execs helping me promote an event of mine too.  Nothing wrong with it, a common practice.

In the manufactured home communities world, Allen’s Roundtables are unmatched.  Allen gets some fine speakers and topics in.  They are informative and enjoyable.

However, I can’t always agree with George Allen’s commentary, live or in his columns here or in his own publications.  Let’s parse some of his recent ones for a few moments.

I understand and agree with George that MHI doesn’t seem to have a plan for our Industry’s recovery.  What’s up with that fact?  I can see why the natives are restless in the NCC, even with Lisa B getting appointed.

George is spot on that MHI is failing to do half of what an association is called to do – protect and promote.

  • Where is the Industry promotion?
  • How has MHI worked to reverse the Industry’s downward new home shipment trend?  Marty was spot on regarding that topic, in his recent column.

But George’s bashing of Danny and MHARR misses the mark.  Why?

Because MHARR is an association for independent Manufacturers. MHARR don’t get paid to represent communities or lenders or suppliers.  MHARR doesn’t represent retailers,  which if you ask retailers like Doug Gorman or Dick Moore, MHI doesn’t seem to do such a hot job for them either.

George, the point is that MHARR can’t be faulted for focusing on what its members pay MHARR to do, namely, work on regulatory issues.  So George, if you want to fault Danny, fault him for something that group is paid to do.  At least MHARR has stated publicly they support the ‘post production’ sector (MHARR code words for MHI) in their efforts to modify Dodd-Frank, SAFE, etc.  I’ve not seen any similar effort from MHI back towards MHARR.  If it exists, it is behind the scenes.

I also agree with Marty Lavin that we better watch more what people say than what people do.  We better watch results, because words alone can be cheap.

Or words can costly, depending on how you look at it.

Industry Marketing and Image Campaign

Speaking of MHI and the Industry image campaign…

…I’ve seen the plan Tony, IMHA’s Mark Bowersox and others have put together.  In a word, brilliant.

In my mind, they need to consider a different name, but for now they are calling it the Manufactured Housing Alliance and Phoenix Plan.  Their plan navigates the key political issues that our industry has faced that has kept us from moving ahead.

We keep reading from MHI the statistics about our dropping new home shipments.   This gets back to the dual role that an association is supposed to have, protect and promote.

Where is MHI on this MH Alliance/Phoenix Plan effort to turn around our image, marketing and sales results?

Silent.

By contrast. I see John Bostick’s name on the page in favor of the MH Alliance/Phoenix Plan.  That makes me want to order some Sunshine Homes and get others to do the same!

Good for MHARR’s Chairman, who did not endorse it on MHARR’s behalf, but Mr. Bostick has obviously taken the time and had the guts to publicly say, hey, this can work.

Which leads to the questions:

> Where are the MHARR members or Danny on this plan?

> Where is MHI on this plan?

Marty Lavin on Danny Ghorbani

I’m the first to agree with Marty that Danny needs to polish up those lobbying skills.  In fact, let me take Marty’s points a step farther.  As I personally see it, and others may disagree, Danny has three options:

  1. change your ways, permanently and rapidly, to become more effective at what you do for MHARR,
  2. retire and consult for MHARR as needed;
  3. or just retire.

Danny, retire? What would happen to MHARR without Danny?  What’s up with that idea?  Can you even say MHARR without saying Danny G’s name?

Yes, you can.

Attorney and MHARR VP Mark Weiss is a good man.  Mark knows the law, can be reasoned with and Danny has prepared him to take the helm at MHARR, when the time comes that Danny decides to retire or when MHARR members make that decision.

For example, MHARR could bring in a new associate, give Danny a nice gold watch, and a one year transitional consulting agreement.  The independent factories that support MHARR can save money.  As or more important, they likely can get more done and advance their cause in DC with HUD, Congress and other regulators.

The timing is right for a change at MHARR.  Danny, don’t take it the wrong way, you are a smart guy and know the HUD Code as well as anyone in the manufacturing side of the Industry.  But in my personal opinion, it is time to change your ways for the better or you better retire.

The best suits and fine meetings

Danny has some of the best suits in DC that our Industry can brag about.  Danny and MHARR are spot on with some key issues.  But you can be right, and still do things in a way that turns people off.

But give the man his props, Danny is right about MHI meeting,

after meeting,

after meeting and

…where is the MHI plan?

But then, Danny – if you stay – you and MHARR should then walk the walk and have an action plan of your own. Not a some day, or five year plan, a let’s get it done now plan.

Perhaps John Bostick’s public move supporting the MH Alliance/Phoenix Plan will inspire others of stature to make their own public statements or just help launch the program.

But at some point, we need to get past meetings, and get to doing.  46,000 shipments.  We are now down about 88% from our post HUD-Code high in 1998.  How much lower can we go and still have an Industry?

  • We can’t fill empty home sites with only used product.
  • We need new homes bought from factories and sold to consumers.
  • We need retailers and community operators who attract customers with good credit, and then close them and turn them into happy homeowners who will tell their friends and once again let our Industry grow.

The Numbers on MAP

I like abbreviations. Let’s call this plan of Mark’s and Tony’s MAP for short, because this MH Alliance Phoenix can be our road MAP to the future. Maybe we can get Tony and Mark to come up with a better name.  But in the mean time, MAP it is for me.

I asked Tony to give me a projection on what he thinks MAP can do.  His answer?  First year from the launch date could double shipments without a need for hurricane season (no need for FEMA orders).

The next year could double it again.  That would be roughly 92,000 shipments in year 1. Then 184,000 shipments in year two.

Take a look at the MAP if you haven’t already.  If you have a better plan, why not share it?  But if not, get behind the plan that is out there being discussed.

I’m told that MAP can be up and running in short order.  We can do MAP, with no waiting for federal or state action!

Doing the Math, my Math not Ts

Tony has his math, I have mine.

Let’s say MAP was launched, and then MAP raised shipments back to 75,000 the first year.  Let’s further say, 1/2 of the increase went into communities.

  • That would mean 14,500 spaces filled.  At say $275 average a month per site, that would mean $47,850,000 more to MHCs a year.  Plus the profits off the home sales.
  • 29,000 additional new shipments would mean 29,000 new jobs.
  • It would mean security for those whose jobs or businesses are at risk due to declining shipments.How many MH plants would stay open?
  • At even a low $50,000 average per home, that 1.45 billion in new sales.  Think about the boost in revenue to retailers and developers.

Would you give $75 per location to boost sales $1.45 Billion and create about $48 million in new communities revenues?

If not, please go back to 5th grade math.  To me, this spells a good deal.

Let me stress, these are my numbers, not T’s or Mark’s.  But it tells me why they and others are working to see this plan happen.

Chattel Lenders

I’m not without experience in dealing with personal property lending.  While he wasn’t talking about just lending, I agree with Chad Carr’s recently published statement about MAP.  The MH Alliance/Phoenix Plan is the only plan I’ve seen that gets to the heart of fixing chattel lending for our Industry.  MAP provides solutions for image, lobbying and other practical issues too. It dares to be bold, without trying to step on any industry group’s toes.

If your chattel lender has not yet seen this, she or he better do so!  This can help us cut our repos losses dramatically.

It will help our customers – manufactured home owners – dramatically too.  That will in turn attract more customers, and more credit worthy ones.

Manufactured housing lenders need to see our losses cut.  Because that panel of lenders at the MHI Congress last April were correct.  A repo can cost 50% (or more) of the loan balance.   There are so many dark clouds that hang over personal property lending for manufactured housing right now, we have to have solutions if our Industry will ever advance.

In fact, our survival depends on it.

I asked Tony specifically about people who have and have not seen MAP.  T won’t comment about those who haven’t shared a public statement. I can respect that, but it does leave us guessing.

So someone needs to ask Marty Lavin or Dick Ernst where they are on this.  Have they seen it?  What is there take?  It is obvious that Ken Rishel has come out for it, big time, in his own newsletter and on MHMSM.com too.

Come to think of it, where is George Allen’s name on this subject?  Didn’t he say a few months ago, we needed an image campaign?  What’s up with that?

We could go through a list of industry leaders and say, what about you?  Where are you on this MAP subject?

If you are for it, why not say so publicly? If you oppose it, why and then propose your own alternative!  Mark, Tony and those working on this want to see consensus. I appreciate that, but I’d add that we can’t afford to debate stuff forever.  We need to move ahead, and pronto.

If we do not start advancing, more factories, more retailers and more communities will fail.  It is simply 5th grade math.

State and Communities Association leaders

Given that a pair of state association leaders have already publicly stated support for the MH Alliance and Phoenix plan, it is reasonable to think others have seen it too.  We need to watch and encourage this plan at the state level.

Because let’s be honest, the states are where it is at.  All politics are local, and your business happens at the state and local level.

Last year, we saw some state execs who took a leadership role to get things happening at the federal level.  We need to see that again, and we need to see that on MAP or their best alternative to it.

A pimple on an elephant’s bottom

We’ve heard this expression at meetings and coffee tables.  I admit it sadly fits the influence our Industry has politically in DC today.  We need to be working tea parties to get the party of jobs, business and growth moving ahead. We need to hold the feet of those who say they will change DC for the better to the fire, and get the gold of jobs and rising housing back to work building the U.S.A.

We have lost our nation’s AAA credit rating.  Debt piles up, what do we have to show for it?  Where are the jobs?  The lending?  The recovery?  What did we bail out anyway?  Who benefited from all that taxpayer funded largess?

We saw some amazing upsets at the midterms, and I think we can see more if we plan now for the best candidates and then mobilize for the general elections.

It is frankly another good reason to learn and get behind the MAP.  We will increase our influence at the state house and in Washington when our consumers are visibly supporting us in sizable numbers.

Let’s work and earn the support of our communities’ residents and home owners/customers!  Then we should make sure we continue to deserve it.  Without happy customers, we are as doomed as if HUD bureaucrats or others would just shut us down.

TANSTAFL

If I boiled this down, it would be this.  We can’t have something for nothing.  TANSTAFL = There is no such thing as a free lunch. Someone always pays.

We better work for truly positive change, or we will be left with pocket change.

We better look at and support a plan that can move us ahead.  I vote for the MH Alliance/Phoenix Plan.  Or we will suffer the fate of the buggy whip makers.

I shop at WalMart no more than I have to, because I believe in supporting the smaller and more independent business women and men out there.  They are more like me.  They want to serve me, and I in turn want to support them.

We better support the HUD Code builders, and they in turn, better support us too.

Talking and Doing.

Before we look at any other emperor who also lacks clothes, let’s close for now. Talk is fine, but let’s follow talk with do.

I want to thank those of you who have written.  Please do not think me rude, but for now…

…I hope you understand that some things need to be said that have gone unsaid too long.

More next time.##

post submitted by
Michael Barnabas

(Editor’s note: The views presented on the Industry Voices Guest Blog represent those of the writer.  They do not necessarily represent the views of MHMSM.com (soon to be rebranded as MHProNews.com) or our sponsors.

We encourage a respectful exchange of opinions and views on topics of general interest to the Industry.  Industry Voices guests columns are not a forum for business promotion; that is what advertising is supposed to do.

The Industry Voices forum encourages a respectful dialogue between industry members.  You can post comments using our Disqus system or submit your own Industry Voices guest column in reply to a column like this topic or on any other topic of interest to the factory built housing Industry.  Please put Industry Voices Guest Column in the subject line when you submit an article for consideration. Posted comments via Disqus and Industry Voices columns must stay within the boundaries of civility, the law and common sense.)