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Posts Tagged ‘MHI’

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

February 9th, 2018 No comments

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

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

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

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

MHCommunitiesOfAZNealTHaneyPresidentWhyTheyQuitManufacturedHousingInstituteMHIDailyBusinessNewsMHProNews737x214

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

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

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

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

Sincerely, 

Neal T Haney,
President


##

ManufacturedHousingCommunitiesofAZLogoIndustryVoicesDailyBusinessNewsMHProNews

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

March 8th, 2017 No comments

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

DougGormanICantImproveOnWhatMarkWeissMHARRPresidentCEOHasSaidBelowManufacturedHousingIndustryVoices-MHProNews

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

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

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

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

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

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

 

 

 

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

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

 

 

 

 

 

 

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

May 24th, 2016 1 comment

TOPIC

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

FreddieMacFannieMae-logos-creditBeforeItsNews-PostedMHProNews-

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

BACKGROUND

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

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

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

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

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

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

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

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

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

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

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

FAST FORWARD

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MHImanufacturedHousingInstituteLogo-postedIndustryVoicesMHProNews-

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

WHAT’S THE POINT?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

4S=SafeSoundSanitarySustainable-postedIndustryVoicesMHProNews-com-

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

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

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

 

 

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

The Association Lament ­- A Commentary

January 26th, 2016 No comments

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

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

The end result was wasted money and effort.

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

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

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

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

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

guarantee.

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

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

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

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

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

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

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

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

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

Another issue is the same bemoaning and complaining about government.

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

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

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

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

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

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

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

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

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

represents and how it functions? Yes!

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

Insanity. ##

ImageCreditMHBGroup-postedIndustryVoicesMHProNews-com-

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

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

About-Face! City Council Mh Prohibition Reverses Course

October 16th, 2015 No comments

Boy, it is nice when I get to share good news.  Wins for the industry and sharing good news are probably the two best parts of my job, and fortunately for me, those two things almost always go together.

Last night in Huntsville, Texas, the city council reversed course on what started out looking like another bad news day.  A couple of weeks ago the city council met and voted on first reading (they need two readings to make ordinance changes official) to prohibit all manufactured homes from being sited on a lot within the city limits.  Initially they had a small exception for homes going inside communities and for replacement of existing manufactured homes, which incidentally is state law that TMHA worked to get passed years ago.  But other than those two limited exceptions, no more manufactured homes.

The first reading vote was 5 – 2 in favor of the MH prohibition.

A local reporter covering the council wrote a story about the proposed prohibition, and Jenny Hodge with MHI emailed me alerting me about what the council was proposing.  We then pulled titling records and retailer selling records and started contacting retailers with a selling presence in Huntsville.  Thanks to Rob here at TMHA, we were also able to gather some telling data about manufactured housing in Huntsville.  Specifically, we learned that from 2011 to 2014 a total of 843 manufactured homes were sold with the city of Huntsville listed in their address.  MH presence aside the demographics were incredibly telling of a city in real need of more affordable housing, not less.  The median income of a household in Huntsville is $27,362 per year.  Of the existing housing in the city 16.6 percent is more than 45 years old.  Housing supply, specifically affordable housing supply, is clearly constrained because nearly two-thirds of Huntsville residents are renters and in this large renter category 61.8 percent spend more than 35 percent of their monthly income on their rent.  To consider further limitations on sources of affordable housing seems illogical.

But as we all know this isn’t a logic puzzle, it’s politics.  Because this was one of the more rare instances where we actually found out about a proposal before it was final we were able to inform our retailers who would be adversely impacted by the proposed prohibition.  From there those retailers and other citizens who turned up last night at the council meeting to testify against the proposed ordinance took over – and did all the heavy political lifting I might add.

We cannot thank Gary Adamek with Reliable Homes and Les Stone with Clayton Homes enough for the work they did, the time they spent, and the persuasive testimony they provided last night.  These retailers and the results they secured in a near complete reversal by the council (they voted unanimously to continue to allow MH within city limits) once again demonstrates the power of engaged, passionate, local advocacy.

Again, when it comes to local (city and county) politics it is imperative that local constituents and businesses are there to advocate for their industry.  When this happens in a timely manner the industry’s chances of securing a victory increase many fold.

I hope that Gary and Les’ success last night serves as an example to all those in our industry about the power of local political engagement.

Everyone has heard the term, “it takes a village,” and that applies to political advocacy.  The power of timely information coupled with individuals willing to engage locally on behalf of their interests, the interests of the industry, and the interests for consumers who want affordable housing options, can prevail when properly deployed.  I’m happy to report such a deployment occurred last night. ##

http://www.texasmha.com/news/featured/about-face-city-council-mh-prohibition-reverses-course

MHI, MHARR, MHIndustry Associations and the Manufactured Housing Leadership Issue

October 21st, 2014 1 comment

Tony,

1. These are legitimate questions.  I think MHI does excellent work and has exceptional personnel, but seem to have a tendency to react slowly.

2. I don’t want MHI to offer more than they are now. They cant take on 10 different missions and be successful. Everyone wants MHI tomhpronews-mharr-mhi-associations-graphic-manufactured-home-marketing-sales-management be the magic bullet. They can’t, they aren’t and they never will be.

3. MHI's role should be limited to Continuing Education, Image/Marketing and Legislative/Lobbying. The industry should turn Regulatory over to MHARR and get them under the same umbrella but keep responsibilities separated. Lots of differences between Legislative and Regulatory. Two different worlds.  MHARR’s strength is Regulatory and MHI’s strength is Legislative/Lobbying and Information/Supply.   Until the two are joined they will both struggle to zero in on a particular mission. Both of them bounce around from point A to point Z with no defined scope. With MHARR constantly trying to eliminate the significance and importance of MHI.

4. We have one main problem in our industry and it is a lack of Retail and Wholesale Finance. This limits our sales volume and because of this low volume we lack Political Financial Capital or $$$$$ which in turn creates a lack relevance for you at the nation’s Capital. Industry Dollar Volume cures a multitude of “Sins.”

5.  Our manufacturers spent all of their profits and reserves on trying to control their distribution networks by entering the retail business in the late 1990’s. Instead of competing with their customers and utilizing those reserves and profits to invest in a Retail Finance Foundation they made the age old mistake of trying to compete with their distributors. Clayton was investing all of their profits in retail financial products. Because Clayton had opened the retail division of their company first they had the freedom to do this. They are the only Manufacturer in the Industry to ever get away (from) competing with their customers. They got away with it because they treated their independent distributors identical to how they treated their company owned stores. The other manufacturers never copied this one small concept. The Clayton Family was smart enough to know they needed all three. Manufacturing, Independent Distributors and Company Owned Stores. The other Manufacturers spent all their time and money trying to create an advantage for their company owned stores over their independent distribution network and bypassed the need for the all-important foundation of Retail Finance. Clayton had a better vision for the future. No one likes to admit any of this though.

6. It’s extremely easy to be an armchair quarterback when you have the luxury of looking at past history like we do. I do hope as an industry we have learned a lesson for our future. Regardless of an industries distribution, capacity and retail demand…………………….IF YOU CANT CONTROL YOUR PRODUCT FINANCING ,  YOU LOOSE. ##

 

(Editor's notes: A) The author of the above requested in writing the following. I would not mind you publishing these as an opinion from one state executive director but I don't need my name attached because our members are split on this...”

The same courtesy has been extended to others on sensitive topics, when we know the writer is real and not a phantom.

B) this is in response to this linked Masthead  OpEd, which is the hottest trending article in MHville, and at the current pace, will be the top new article for the month.

C) The writer references one of the many take-aways from the Jim Clayton interviews (point 5).

D) The associations graphic was added, and was not provided or requested by the writer, and the headline is ours and not that of the writer.

    E) Other perspectives on this topic or others of industry interest are welcome.

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

    October 6th, 2014 No comments

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

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

    Unfortunately, they fail to recognize the valuable role retailers and sales representatives have historically played in helping consumers identify financing alternatives. Ryan's message insinuates the industry is somehow preventing consumers from selecting less expensive real estate-secured mortgage loans. He says, "many borrowers of chattel products could have qualified for traditional, less expensive mortgages but did not get the chance simply because they were not offered or made aware of the options.”

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

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

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

    Ryan adds, “Indeed, one clear way to address this issue would be for industry to support titling reform that would give families the option to title their homes as real estate and the opportunity to access real estate loans."The manufactured housing industrysupports legislation in all states to provide the alternative of titling manufactured homes as real estate where the home is sited upon land owned by the consumer and when financing is needed, the consumer pledges a first lien position in the land.

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

    Related Links:

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

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

    3) – CFED's Doug Ryan sounds off on Consumer Financial Protection Bureau (CFPB) Report on Manufactured Housing and MH Financing

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

      (Editor's Note: The views expressed by Jason Boehlert are his own and/or those of the MHI, and should not be construed to be the views of MHProNews or our sponsors.Other viewpoints on this or other industry topics are encouraged.

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

      CFPB Report on Manufactured Housing Signals Areas of Future Concern

      October 6th, 2014 No comments

      On Tuesday, the Consumer Financial Protection Bureau (“CFPB”) released a white paper summarizing their research on the manufactured housing industry. The Bureau relied upon information compiled by various surveys, data available pursuant to the Home Mortgage Disclosure Act (“HMDA”), and voluntary submissions of information by institutions in the manufactured housing industry. Although the CFPB acknowledges that they are still seeking additional information on the industry, the report, among other things, provides a detailed description of the manufactured housing market, the demographics of consumers who reside in manufactured homes, and the impact of the current regulatory climate on the industry.

      The CFPB also developed seven “key findings” from this research, many of which likely will come as no surprise to those actively involved in the manufactured housing industry. For example, the Bureau explains that manufactured homes are more likely to be located in non-metropolitan areas than site-built homes, and that manufactured homes typically cost less than site-built homes. These types of findings lead the Bureau to conclude that the industry is “an important source of affordable housing, in particular for rural and low-income consumers.” On the other hand, however, they believe that “these same groups include consumers that may be considered more financially vulnerable and, thus, may particularly stand to benefit from strong consumer protections.”

      With respect to the specific protections that may be necessary, the CFPB declines to make any conclusions and, in fact, leaves certain questions open for further research. For example, the white paper describes how consumers in the manufactured housing industry can either utilize real-property financing or chattel financing, and explains some of the short-term and long-term trade-offs that exist between the two options. However, it appears that the Bureau is concerned with, and wants more information on, “[t]he extent to which consumers are aware of these trade-offs and how consumers weigh them.” This information indicates that the CFPB will pay particular attention to whether or not borrowers are adequately informed about the trade-offs associated with pursuing chattel financing instead of real-property financing.

      The report does acknowledge that some of the title XIV Dodd-Frank Act amendments, including those made to the Home Ownership and Equity Protection Act (“HOEPA”) and the Truth in Lending Act (“TILA”), expand protections for consumers in the manufactured housing market. They also briefly describe the actual and theoretical impacts of these laws and the underlying regulations. For example, they admit the possibility that additional disclosure requirements and other burdens could increase the cost of extending credit to consumers seeking financing for a manufactured home. Prior to the rules being finalized, the CFPB received comments expressing concern that the proposed HOEPA high-cost thresholds would disproportionately impact small-balance loans that are often used to purchase manufactured housing. Many in the industry believe that these standards, which have been in effect since January 2014, are in fact reducing the availability of credit in the manufactured housing market because these loans are now classified as high-cost.

      Similarly, the new Loan Originator Compensation (“LO Comp”) rules in TILA may also be increasing the consumer’s cost of obtaining credit for a manufactured home. Unlike realtors, manufactured housing retailers are not exempt from the LO Comp rules. In order to avoid being considered a loan originator, and to avoid having to go through an expensive licensing process, manufactured housing retailers are often not referring potential borrowers to specific creditors that they know are willing to extend financing for a manufactured home. This has resulted in consumers being left unaware of which creditors are willing to extend credit and the requirements each creditor has for approving a loan. Consumers, therefore, are submitting more applications and, because of the lack of important information, are more frequently being needlessly denied.

      Despite acknowledging that the manufactured housing industry still has concerns about the impact of the CFPB’s new rules, the Bureau declines to accept that the rules have adversely impacted the market. Instead, they “will continue to monitor the effect of [their] rules on the manufactured housing industry and on consumers who purchase or seek to purchase manufactured homes.” In the meantime, the Preserving Access to Manufactured Housing Act, which would address at least some of these concerns, remains in Congress.

      If nothing else, this white paper should serve as a warning that the CFPB has taken an interest in the manufactured housing industry. The Bureau is continuing to monitor the impacts of the new mortgage rules on the manufactured housing market, which could signal that the Bureau may be open to making adjustments to the rules that would reduce burdens on creditors and lower the cost of credit for consumers. However, they have also tipped their hand to at least one area of ongoing concern. Creditors originating chattel mortgages should pay particular attention to the amount, and types, of information that is being provided to borrowers and should ensure that they are fully informed of their financing options and the costs and benefits associated with each.

      ##

      Republished with permission. This article first appeared in Financial Services Litigation & Regulatory Compliance Alert, a publication of Bradley Arant Boult Cummings LLP.

      About the Authors:

      Jonathan_R_Kolodziej-jd-bradley-arant-boult-cummings-llp-posted-industry-in-focus-mhpronews-com-75x75-Jonathan R. Kolodziej, JD, is an associate in the Birmingham office where he is a member of the firm’s Financial Services Litigation and Compliance Team. His regulatory compliance practice involves assisting some of the nation’s largest financial institutions and mortgage companies as they implement, and demonstrate compliance with, various obligations imposed on them by the Consumer Financial Protection Bureau (CFPB) and state banking regulators.

      bill-matchneer-jd-formerly-hud-cfpb-now=bradley-arant-boult-cummings-llp-posted-industry-in-focus-mhpronews-com-75x75-

      William “Bill” W. Matchneer, JD, recently joined the Washington DC office as senior counsel. He retired from the CFPB in February, where he had been one of the team leads for the regulations implementing the Dodd-Frank mortgage requirements. He previously spent ten years at HUD as manager of the Office of Regulatory Affairs and Manufactured Housing and Senior Counsel for Regulatory Enforcement.

       

      Related Links:

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

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

      3) – CFED's Doug Ryan sounds off on Consumer Financial Protection Bureau (CFPB) Report on Manufactured Housing and MH Financing

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

      (Editor's Note:  The views expressed by Messrs. Kolodziej and Matchneer are their own and/or those of the organization they work for, and should not be construed to be the views of MHProNews or our sponsors. Other viewpoints on this or other industry topics are encouraged.

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

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

      October 4th, 2014 No comments

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

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

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

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

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

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

      Doug Ryan
      CFED
      dryan@cfed.org

       

       

      Related Links:

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

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

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

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

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

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

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

      Dueling Factions

      September 2nd, 2014 No comments

      In this time of industry crisis, many thoughts arise regarding strategy and direction, but there has been seemingly little effective action. A couple of old friends from my days in the industry, plus one new friend, Dr. David Funk, asked me to see if I could help things along by putting matters into historical perspective.

      In my early days when the MH industry was breaking sales records every year (I’ve been retired for more than two decades), we were leaderless—in discord. No manufacturer originated more than ten percent of shipments. Those heady times ended with a crash—a major housing crisis.

      Faced with ruin in the seventies, manufacturers, suppliers, retailers, community owners and the like pulled together behind a focused plan of action. It was a widely debated strategic decision to enhance industry credibility by accepting HUD supervision of a national building code for our product. There was plenty of dissent, but the plan had broad support. It was nominally led and presented by MHMA (the Mobile Home Manufacturer’s Association, the predecessor of MHI).

      Wrong course? Maybe—we cannot know—but it attained consensus; we worked together and made it happen. A bit of a miracle, considering a long history of bickering and lack of leadership.

      These days, we face a bigger challenge and yet … where’s today’s consensus? What’s the strategy? Where’s the leadership? You have a strategy, I have a strategy and yonder fellow behind the tree has a strategy, but what emerges is discord.

      In my naïveté as I stepped back into this largely consolidated industry, I thought a leader would step forward, rally the troops behind a plan of action, and get on with developing our great potential. Strangely, that has not yet happened. As Rahm Emanuel said, and Tony quotes:

      Never let a good crisis go to waste …

      We’re wasting this crisis by fussing over “who’s right” instead of debating “what’s right.”

      you-never-want-a-serious-crisis-to-go-to-waste-rahm-emanuel-president-obama's-chief-of-staff-image=wikicommons-(c)2014-lifestyle-factory-homes-mhpronews-com (1).png

      Editor's Note: this is the MHProNews poster Bob Vasholtz is referencing,

      the article and context it was used in is linked here.

      “What’s right” is hard to say, but easier than finding broad agreement. No clear consensus seems to emerge from our diminished industry represented by multiple associations. None of them seems to have a handle on “what’s right,” though there seems a general agreement that the others are wrong and one organization (guess which) should lead the charge. It looks like we’ll not be singing Kumbaya real soon, so how about we start by tuning up Jim Krueger’s 1977 lyrics:

      There ain’t no good guy, there ain’t no bad guy
      There’s only you and me and we just disagree

      Nothing wrong with disagreement. There are many viable ways to tackle a problem and finding the best can be a stiff challenge, requiring many inputs—thoughtful discussion among all guys who are betting their companies on this industry’s future.

      Underneath the rhetoric there is probably an industry consensus that no one has managed to dig out, articulate, and work into a viable strategy. There seems to be no vehicle for doing so. We’re all on the same side, and yet can’t seem to band together and work toward a mutually acceptable way forward. Wow.

      It sorta reminds me of national politics. The Republican party caters to the radical right, Democrats the loosely left and the sensible consensus is leaderless.

      Rick Rand has a great idea to pull the factions together, shake ’em in a sack, and see what emerges (my words, not his!). I’m on record in support of Rick’s idea, but suggest the challenge is … difficult. It has been my observation that industry progress tends to be incremental with breakthroughs few and far between. How and where, for example, might our scattered and somewhat contentious flock even gather so discussions can begin? How can we, this industry, get past internal politics and start the ball rolling? We’re a young and feisty bunch competing in a turgid housing market. Where, exactly, do we begin to get a handle on a viable and agreeable strategy?

      Tony suggests in these pages, “Perhaps we need a few dozen retired guys—or those so financially comfortable—that they don’t fear speaking out publicly on touchy issues that matter to our industry.”

      Well gee, I’m such a veteran, happily retired, having no skin in the game and representing no one. I’d be pleased to join with similar voices and see what we can conjure. Thomas Jefferson said:

      Those who hammer their guns into plows will plow for those who do not.

      I’m an ol’ Kansas farm boy, have my grandpa’s anvil in the barn and can still swing a hammer. Let’s get on with it!

      While Tony’s idea is terrific, I wonder if a gaggle of geezers of good intent can do much beyond early steps in the direction of uniting our industry voice toward a viable strategy? Without unity, the problems of a leaderless industry drag on and strategy does not emerge. Agreeing upon one viable association seems a good place to start such useful discussions while reducing internal conflict. Maybe that should be at the top of the agenda for such a senior-citizen forum?

      In support of Tony’s and Rick’s ideas, and with incremental progress in mind, here’s another suggestion. Conduct a survey of all segments of the industry, trolling for consensus. Put forth a professionally-written survey, geared toward one question: Which single association or group should speak for our industry in dealing with the important questions we face today—and why (or why not)?

      To still protests, the survey must be inclusive, fair and objective. Who can do that? Foremost has long been respected as a provider of solid industry data and could probably do it well. The results, if clear, would be hard to deny, leading toward consolidation. They might sponsor such research in lieu of their next MH survey. The results could be of historic importance.

      As with Rick’s conclave and Tony’s summit of the aged, the outcome of such a survey should not be expected to result in a shiny new industry strategy. First we need positive steps for getting back on track—taking what Peter Drucker called results oriented action, toward our industry’s great potential—at minimum, enabling us to speak clearly to confused Washington bureaucrats.

      One step at a time along our learning curve. It’s kinda dumb to be racing off in different directions when times are tough and we most need to pull together. ##

      bob-vahsholtz-author-dueling-curves-battle-for-housing-posted-industry-voices-guest-blog-mhpronews-com-manufatured-housing-professional-news-75x75-Bob Vahsholtz is the author of DUELING CURVES The Battle for Housing Bob can be reached at kingmidgetswest@gmail.com. Web: www.kingmidgetswest.com.

      (Editor's Note: All opinions expressed are those of the writer, and may or may not represent the views of this publication, editor or our sponsors. Other points of view are welcome. OpEds or Letters to the Editor on industry related issues may be sent to latonyk@gmail.com or tony@mhmsm.com, thank you.

      As a point of fact, Bob Vahsholtz clearly agrees on some things, disagrees on others, with L. A. “Tony” Kovach's editorial perspectives. Alignment with Masthead view points is not required for publication! :-)