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The Fire Sprinklers and Manufactured Housing Debate – Two Views

November 5th, 2015 No comments

(Editor’s noteMHProNews.com/MHLivingNews.com: Let’s begin by stressing our respect for firefighters, Lorraine Carli, and the National Fire Prevention Association (NFPA).

One of our mottos states, “We Provide, You Decide.” © In that spirit, we welcome thoughtful commentary, differing or opposing views, such as the views expressed by Ms. Carli, below. We would concur from the outset to the fact that fire sprinklers save lives.

First, Ms. Carli, then the MHProNews reply.

Fire Sprinklers Save Lives

Dear Tony:
Thank you for the recent article by Jan Hollingsworth on fire safety in manufactured homes.  The 1976 Housing and Urban Development (HUD) standards have played a major role in the increased safety in these products.  We agree that working smoke alarms are essential.  Smoke alarms provide an early warning and more escape time.  They cannot, by themselves, control the fire or ensure escape.

Fire sprinklers provide another important level of protection.  This point was also made in NFPA’s 2013 report:  “The case for fire sprinklers is as strong for manufactured homes as it is for other one- or two-family homes.”  You note that many manufactured homes are in rural areas.  Rural communities tend to have volunteer fire departments that will take longer to respond to a fire.  Fire sprinklers can control a fire until the fire department arrives.

The comparison of fire experience post-HUD standard manufactured homes with other one- or two-family homes showed that the newer manufactured homes had a lower fire death rate per 100,000 properties.  However, the group of other one- or two-family homes includes many run-down homes.

Sprinklers save lives in all types of homes.  The most cost-effective time to install sprinklers is during original construction and installation.

Thank you for your consideration. For more information on sprinklers, please visit www.firesprinklerinitiative.org. ##

LorraineCarli-VP-NationalFireProtectionAssociation-NFPA-posted-IndustryVoicesMHProNews-com-125x115-

Lorraine Carli, VP -NFPA.

Lorraine Carli
Vice President – Outreach and Advocacy
National Fire Protection Association
1 Batterymarch Park
Quincy, MA 02169
617-984-7276
617-840-4180 (mobile)
lcarli@nfpa.org

Why Many in the MH Industry Believe Fire Sprinklers Should Remain an Option, and Not Become Mandatory

  1. Ms. Carli’s response on behalf of the NFPA does not contradict a single point made in Jan Hollingsworth’s fire safety article, Keeping the Home Fires from Burning.
  2. No doubt, fire sprinklers can save lives. So can installing a fire department on every block — if local governments or citizens could afford them. The issues include balancing costs, mandates vs. providing consumers with the ability to make their own choices.
  3. As the article stated, a common concern is that rural locations and private wells often lack the water pressure to properly support fire sprinklers.
  4. Manufacturers offer sprinklers as options; consumers who want them, can get them.  That happens — rarely. As the article stated, an NAHB survey found that when consumers were given a hypothetical choice of a “free” fire sprinkler system or some other option, a large majority picked something else.
  5. The NAHB “Priced Out” report, quoted in the article, explains that hundreds of thousands would no longer be able to buy a manufactured home at all, if forced to pay for a fire sprinkler system. ##
LATonyKovach-comA200x200

L. A. “Tony” Kovach, Publisher, MHProNews, MHLivingNews.com and industry consultant.

 

By L. A. ‘Tony’ Kovach. Email latonyk@gmail.com, ph. 863-213-4090.

Manufactured Housing: Underutilized and Misunderstood

December 10th, 2014 No comments

What will it take for manufactured housing, the principal source of unsubsidized, affordable homes in the United States, to reach its potential?

Limited and expensive financing options make life even more difficult for the financially vulnerable residents who live in manufactured housing DHS_post_MontanaHome_11.03_.25_nhi=credit-posted-industry-voices-manufactured-housing-mhpronews-(MH) communities. The continuing consolidation of ownership is taking a toll, and the industry just can’t seem to shake the outdated, negative stereotype of a rusted, flimsy structure with a dog chained to the front porch.

Manufactured homes, frequently mischaracterized as mobile homes or trailers—even though once placed, they're rarely moved—house over 18 million Americans. Most are just getting by; the median annual household income of residents is $30,000. The homes are much less expensive to rent or own because they’re built in factories, so they cost less than half the estimated $94-per-square-foot national average for new site-built homes.

Not only is manufactured housing misunderstood, it’s underutilized. “We don’t have enough public housing to fulfill our needs,” says MH industry expert Lisa Tyler of Paris, Tennessee. “Manufactured housing presents a solution. It’s inexpensive, energy efficient, and a great value. There’s a lot of opportunity for growth in the industry, but a lot of obstacles, too.”

One such roadblock is the way most MH is legally classified as personal property rather than real estate, according to a recent report on manufactured housing from the Consumer Finance Protection Bureau. That means MH homebuyers pay higher loan rates, 6.79 percent on average, and have fewer consumer protections than owners of site-built homes, who paid 3.6 to 4.2 percent in 2012 for a conventional mortgage with a 30-year fixed rate.

And then there’s the persistent image problem. Industry insiders are dismayed that manufactured housing continues to be stigmatized, despite the fact that factory built homes constructed after 1976 must adhere to the U.S. Department of Housing and Urban Development (HUD) code that provides guidelines and oversight relating to quality, safety, and durability.

“Today, manufactured homes are often built with higher quality, more energy efficient and sustainable materials than site built homes, and many are set in lovely, tree-lined communities with responsible, hard-working residents," says Tyler. “The mainstream media tells us that people who live in manufactured homes are 'trailer trash,' drug dealers, or wife beaters. Sadly, many people still have trouble getting past that horribly unfair stereotype.”

Mom and Pop: Unsung Heroes

Residents and owners of manufactured housing communities are also grappling with a wave of consolidation that began in the 1990’s, and continues unabated. Sun Communities Inc., for example, just announced it bought seven MH communities in the Orlando area for $257 million. So far, investors are mostly targeting larger communities, says L.A. “Tony” Kovach, publisher of leading trade publications MHProNews.com and MHLivingNews.com. “But we’re going to see things evolve over the next five years, as investors come knocking and begin targeting smaller sites, those with 150 units or less,” says Kovach, who's based in Lakeland, Florida.

These sites are traditionally the territory of small, local owners and operators, informally called Mom and Pop’s.

“The majority of parks were created by private owners, who manage this valuable resource for low and moderate income people who want a home of their own,” says Paul Bradley, the founding president of ROC USA, a nonprofit based in Concord, New Hampshire that promotes resident-owned communities (ROCs). “But they don’t get credit for it. These stewards of affordable home ownership are unsung heroes.” While smaller owner-operators have their flaws, “most of them are truly decent people who’ve managed their communities respectfully,” adds Bradley.

Meanwhile, many of these MH owner-operators are looking to retire, or get out of the business due to economic pressures and shifts in the industry. As fewer of their adult children want to take over the family business, more Mom and Pop’s are selling to larger operations, which, in turn, sell to investors. That’s when the fortunes of residents can change quickly.

“The difference between how a consolidator runs a business and how we did is one of values, frankly,” says Marc S. Seigle, a retired attorney and former owner, along with his family, of a MH community in Elbridge, NY. Seigle says they raised rents on tenants from $190 to about $300 over 25 years—just enough to cover inflation, taxes and insurance costs.

“There’s always a great deal of talk about the importance of quality affordable housing, but it’s pretty much eyewash—just talk,” says Seigle. “I saw an article in The New York Timesabout Wall Street investors making their fortunes in this industry. I thought, they suddenly discovered they could do what the rest of the world does with folks who don’t have much clout—gouge them. I’m saddened but not surprised to see it.”

A Better Way

Owner-operators of MH communities who're ready to exit the industry don’t have to sell to consolidators. There’s a better option, says Bradley. Residents can collectively buy the land, and create a ROC. Bradley’s organization, ROC USA, has helped secure community ownership for over 150 resident corporations to preserve and improve affordable communities, and help residents build their individual assets. Impressively, none of ROC USA’s communities have gone bankrupt, into foreclosure, or been resold.

Seigle’s family was the first to partner with ROC-USA, back in 2008. He says they received their asking price, and there was no downside to the deal. “I spoke with a consolidator, and it was quite clear to me they’d jack up the rents if we sold to them,” says Seigle. “The fact I was able to sell to my former customers, so they would have some control and I knew it would be well maintained—made it even a sweeter deal.”

Former MH community owner George Everett was also pleased with his ROC USA transaction. He sold the 32-unit Green Acres Cooperative, tucked deep inside the Rocky Mountains in Kalispell, Montana, to the nonprofit in 2010. “I know many of those who live in the community real well. Ninety-five percent are good, hardworking people who didn’t deserve for a developer to come in and suddenly raise the rent so high they’d have to leave their home.”

“I’m a conservative person, but I’d do it again,” says Everett, a former realtor, and a Republican who served in the Montana legislature for eight years. “I still drive past there and talk with the manager sometimes. It seemed to work out well for everyone.”

dana-hawkins-simons-nhi-org-posted-industry-voices-manufactured-housing-mhpronews-com-75x75-Dana Hawkins-Simons directs NHI's Opportunity Housing Initiative, a project that supports the expansion of long-term affordable housing programs and policies. She is an award-winning journalist and former senior editor of U.S. News & World Report. Reprinted on request, as first published in Rooflines,

(Photo of the Green Acres Cooperative by Lorie Cahill.)

Are Frameless HUDs a MOD under state laws? 

June 3rd, 2014 No comments

The question of whether a “frameless” factory built home might be considered a modular home under state law is an interesting question.

To me, if the definition of “manufactured home” is amended to delete the requirement that a manufactured home have a permanent chassis, it wouldn’t matter what state law says.

If a frameless home receives a HUD label, that label is preemptive and the home is a “manufactured home” within the federal meaning of that phrase.

What is more interesting is if the term “manufactured home” is amended to exclude RV trailers larger than 400 square feet so a larger RV trailer could be built, since that unit is not defined in a federally preemptive way, then yes, state law could define that unit as a modular home.

So for the RV industry to produce a non-regulated home at either the federal or state level, they would need to amend federal and all state laws. ##

ross-kinzler-wisconsin-housing-alliance-executive-director-posted-industry-voices-manufactured-housing-professional-news-mhpronews-com-75x75Ross Kinzler
Executive Director
Wisconsin Housing Alliance

 

(Editor's note: an industry savvy attorney, not affiliated with MHARR, who saw MHI's statement on frameless HUDs voiced concerns about the issue. See this article, supplied by MHI for publication.

http://www.mhpronews.com/mhi-news/7691-about-the-rvias-efforts-on-changing-some-language-in-the-hud-code-for-manufactured-housing

Jim Ayotte made this statement on a related issue;

http://www.mhpronews.com/blogs/industryvoices/the-rv-industry-is-attempting-to-amend-the-hud-manufactured-housing-code/

As on any article of topic of industry interest – private or public (ie: for publication) – feedback on this subject is welcomed.)

Congratulations to All Who Made it Happen

September 28th, 2013 No comments

Tony,

Congratulations on the celebration of MHMSM’s 4th year anniversary! What a tremendous contribution you have all made in such a sort amount of time to the image and promotion of manufacturing housing. 

My involvement with the Louisville Show has allowed me to appreciate the invaluable promotional and marketing assistance MHMSM/MHProNews.com has provided in the successful resurgence of the Show.

Now as the premiere media outlet for our industry, I greatly anticipate promotional and marketing efforts in the next 4 years for you and your team beyond any of our expectations.

And, on a personal note, it is a pleasure to work and talk with one of the finest and most personable leaders in our industry.

tim-williams-ohio-manufactured-home-associatio-mhpronewsTim Williams
Executive Director
Ohio Manufactured Homes Association (OMHA)
5640 Frantz RoadDublin, Ohio 43017

Are You Ready to Grow?  Ready to Do What it Takes?

June 7th, 2013 No comments

It’s been a tough decade and more for manufactured housing. Before the residential housing meltdown of 2007-08, manufactured housing had it tough already. Half of the homes the industry produced in 1999 to 2000 have since been repossessed. That devastated those customers but also the flood of repos tanked new home production and the number of factories and retailers plunged.

The challenges we face today are in stark contrast to the assets the industry still possesses—excellent products, land zoned for use by MH and market hardened professionals.

So, how do we take those assets and turn the industry around?

Veteran retailer Mike Evans of Centennial Homes of Aberdeen, SD recently laid out his vision to LA Tony Kovach of MHProNews:

  • Identify opportunities that no one else will pursue or they don’t see. (Are you a general contractor or are you giving your margins away to others?)
  • Set your goals within your values.
  • Determine the strategic and tactical plans needed to capture that opportunity.
  • Develop a business plan that uses the 3 resources business owners and managers have to accomplish the task: Capital, Technology and Human Resources.

My only addition to his list is to expand your resources by identifying others that can be your strategic partners. You don’t need to do it all yourself, but you have to be able to fill in the gap between your capabilities and what is needed.

In talking to members, they have product and customers but lack financing. Yes, Dodd-Frank was a blow to installment sales, but there are other ways to finance purchasers. This is an example of where there is need for networking for new finance sources. Successful members are expanding their business by relentlessly talking to bankers, credit unions, and mortgage brokers. One member said, he finally broke through by just being a pest regarding the opportunity that MH finance can be for a local lender.

The days of faxing a loan application and getting an answer by noon are over and are not coming back. If we have all of the elements to rebound, then we need to do what it takes to make it happen. ##

ross-kinzler-wisconsin-housing-alliance-executive-director-posted-industry-voices-manufactured-housing-professional-news-mhpronews-com-75x75.pngRoss Kinzler
Executive Director
Wisconsin Housing Alliance
608.255.3131 voice
608.255.5595 fax

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. ##

 

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Tim Connor

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

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

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704-895-1230

Congressman Joe Donnelly Statement for the Record Field Hearing: “The State of Manufactured Housing”

November 29th, 2011 2 comments

 

Congressman Joe Donnelly credit wikimedia commons posted on MHProNews.com Industry Voices Guest Blog I am pleased that the Insurance, Housing and Community Opportunity Subcommittee is having this field hearing today.  Manufactured housing plays a vital role in meeting the housing needs of the nation by providing quality, affordable homes to over 18 million people.  This $8 billion a year industry has long been a major economic driver in places like Elkhart County, Indiana by directly employing thousands in manufactured housing plants and thousands more in suppliers’ factories, not to mention contributing to the local municipal tax base. 

 

 

I appreciate the hard work the industry has done for communities across our country and particularly in areas like Northern Indiana, which I am proud to represent.  This industry knows all too well the pain felt by this economic crisis.  The last couple of years have not been easy, and the suppliers, manufacturers and dealers have been patient and worked hard to continue to make quality homes and keep hardworking Americans employed so they can provide for their families. 

 

As we work to emerge from this housing crisis, we realize that now, more than ever, it is important that people have access to quality homes that they can afford.  As millions of Americans are facing or on the brink of foreclosure, we must recognize the value and cost-effectiveness that these homes provide.  Manufactured housing should be considered a critical solution to helping us emerge from this housing crisis. 

 

 

Creating affordable homeownership is one of the fundamental building blocks of our society and plays a fundamental role in achieving the American Dream.  It helps to provide families with economic security and build strong communities.  I hope today is an opportunity to highlight this industry’s important contributions and identify how Congress can ensure it remains a thriving and successful job-creator in America and a source to meet our current and future housing needs. # #

 

 

Congressman Joe Donnelly

 

Media contact: 

Elizabeth Shappell

Communications Director

Congressman Joe Donnelly (IN-02)

1530 Longworth House Office Building

T: (202) 225-3915

F: (202) 225-6798

Retailer plans meetings to effect positive Dodd-Frank change

September 4th, 2011 1 comment

Tony,

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

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

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

Doug Gorman left, Congressman John Sullivan right

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

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

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

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

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

Happy Labor Day to one and all.

Doug Gorman
Home Mart,
Tulsa, OK

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

Reading The National Association

August 12th, 2011 2 comments

The Journal

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

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

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

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

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

Trade Associations

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

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

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

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

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

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

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

Different Heads

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

Blocked weather radios?

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

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

Waiting to See

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

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

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

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

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

Minor Success

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

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

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

Communiqués Aplenty

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

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

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

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

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

The Roles

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

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

Post by

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

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

 

 

 

 

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

August 12th, 2011 No comments

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

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

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

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

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

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

post submitted by:

Dave Shanklin
Mobile Brokers Acceptance
(916) 962-7128