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Manufactured Housing Institute and Consumer Groups Urge CFPB to Change Loan Originator Guidelines; Support Builds for H.R. 1779

September 15th, 2013 No comments

In a communiqué to MHProNews, MHI's Vice President of Regulatory Affairs, Jason Boehlert shared the following report to Industry members.

MHI and Consumer Groups Partner to Revise CFPB Rules

On September 5th, MHI joined with a coalition of consumer advocacy organizations, including the Center for Responsible Lending (CRL), Corporation for Enterprise Development (CFED) and National Consumer Law Center (NCLC), to jointly urge the Consumer Financial Protection Bureau (CFPB) to amend key mortgage finance rules and preserve access to credit in the manufactured housing market.

Since May, key MHI members and staff have been working with representatives of these three consumer groups to develop a compromise on rules related to loan originator compensation and classification, and HOEPA High-Cost Mortgage triggers – issues that are addressed in the Preserving Access to Manufactured Housing Act (H.R. 1779).

manufactured-housing-institute-logo-posted-mhpronews-industry-voices=guest=blog

Negotiations have been taking place through the assistance and participation of majority and minority staff of the House Financial Services Committee and Senator Sherrod Brown, who serves as Chairman of the Senate Banking Subcommittee on Financial Institutions and Consumer Credit.

As a result of the negotiations, MHI and the three consumer organizations have agreed to jointly ask the CFPB to clarify and amend its rules in two key areas:

Loan Originator Compensation — for purposes of classifying a manufactured home retail salesperson as a Loan Originator, urge the CFPB to better clarify that as long as no incentive is provided or offered by the retailer or the lender to the individual salesperson to steer the consumer to a certain lender or loan product, then the salesperson should not be considered a Loan Originator.

While the CFPB has issued recent rules removing the manufactured home sales price and any sales commission paid to a sales person from points and fees calculations, an individual salesperson can still be classified as a Loan Originator by performing certain activities (i.e., taking an application, and referring a consumer to a lender). This activity would then classify the retailer as a mortgage broker. Both designations carry significant requirements and liabilities, most notably supervision by the CFPB.

HOEPA High-Cost Mortgage Triggers — consumer organizations have agreed to join with MHI in urging the CFPB to reopen its previous final rule on HOEPA. As a result of the significant dialogue that has taken place between the two sides, the consumer organizations have agreed that a significant reduction in access to credit would result in January 2014 (when the rule goes into effect) for the manufactured housing market unless the CFPB modifies the High-Cost Mortgage triggers. While the two sides have not agreed to a specific number, the willingness of the groups to push for the CFPB to reconsider their prior rulemaking is significant.

MHI and the consumer organizations will continue to meet with the CFPB on a joint basis in September on HOEPA issues. Pursuing a strategy of engagement with consumer groups provides the industry the opportunity to underscore the broad impact of CFPB rulemaking on consumers and the industry. In addition, it will provide a more rapid resolution of the industry’s concern when compared to a potentially protracted legislative battle over reopening the Dodd-Frank Act.

However, it is important to note that as the industry gains ground with the CFPB and the consumer groups, Congressional support for the H.R. 1779 continues to build.

Co-Sponsors to H.R. 1779 Grow

During the month-long Congressional recess, more than 20 U.S. Representatives added their names as co-sponsors to H.R. 1779. Currently, nearly 70 Representatives have co-sponsored the measure and support continues to grow. MHI thanks its members and the national network of state associations for their hard work in urging Representatives to co-sponsor this important legislation (to view a current list of co-sponsors, click here).

As has been previously mentioned, provisions of H.R. 1779 were included in GSE reform legislation (PATH Act; H.R. 2767) that was approved by the House Financial Services Committee and MHI staff continues to work with committee staff to seek an opportunity to move the legislation separately.

While the CFPB has provided some key relief in recent rulemakings to the manufactured housing industry – with respect to appraisals and the calculations of points and fees – work still remains to be done to amend HOEPA triggers and the Loan Originator definition to better represent the needs of the manufactured housing market. Absent regulatory relief, statutory change is necessary.

The industry is asked to continue its outreach efforts to U.S. Representatives. Urge them to co-sponsor H.R. 1779. For more information, click here to access MHI’s action alert. ##

jason-boehlert-mhi-manufactuired-housing-pro=news-.pngJason Boehlert
Manufactured Housing Institute (MHI)
Vice President of Government Affairs
1655 North Fort Meyer Drive
Suite 104
Arlington, VA 22209

MHI members can contact Jason Boehlert at jboehlert@mfghome.org or (703) 558-0660.

(Logo image credits to their respective organizations. Photo credit of Jason Boehlert, MHProNews.com)

(Editor's Note:  Consumer groups did NOT in fact get on board for HR 1779, as we editorially observed in this blog post here.) 

Location, Location, Location . . . version 2013

August 9th, 2013 No comments

During my years with Mr. (Dick) Moore, we have had numerous discussions concerning the ‘ingredients’ for a successful sales center. Throughout those many talks, a factor repeatedly mentioned is, as they say in the retail game, “Location, Location, Location.” The value of an attractive sales center with good-looking homes to tour cannot be understated. It is as important today as 25+ years ago, possibly even more so.

“Location” in the world of 2013 can have an entirely different meaning than in the 80’s and 90’s.

Our two sales centers in the Memphis/Mid-South region feature road frontage on major thoroughfares, with high traffic counts every day. But our most important ‘road frontage’ in this day’s operations has to be our display/sales center on the Information Superhighway!

We have all heard about the increasing importance of the Internet in selling our homes. Just how important that digital presence might be can be under-estimated by someone not familiar with today’s online shoppers.

Please allow me to share a tale of two houses “A Tale of Two Houses” with you. As you may know, Tunica MS is very near Memphis. At this year’s show, we bought one of the display houses (with all the Tunica Show décor) from one of our manufacturers. The house is beautiful! We brought it to our Millington sales center and set it up, dressed to the nines with the show décor.

The company that handles our web-site activity for us came and took pictures and video of the home. On April 29, while we were in Davenport, IA attending a meeting, we posted the house “live” with full streaming video to our website.

We have implemented a policy of full pricing on the site for our homes. There are a lot of opinions about that concept, and I’m not going to get into that discussion here. BUT, if I may continue with my Tale….

At approximately 10.30 am on Monday, April 29, the Tunica Show house went live on our site. Wednesday morning, May 1, as we were driving back toward Memphis, I got a call from my sales center manager Michelle Chessor, who began the call with “Bob, remember how you say it’s easier to ask forgiveness than get permission?” With bated breath, I said, “Yes, Why?”

Michelle proceeded to tell me about the previous 24 hours of texts and emails concerning the Tunica Show house! Seems that a couple were looking at that posting on our site on Monday, the 29th, and the wife called Michelle on Tuesday to say “I’ll take it at the price you have shown.” Wow!

Tuesday, April 30, was full of texts and emails between our prospect and Michelle, until around 8.30 pm that evening. Michelle left the e-conversation with the prospect confirming that she would send her daughter over to our center (about 45 miles away) on Wednesday morning with a check to take the house off the market. At that point, Michelle told me she still thought that it was a ‘maybe.’

So why was the forgiveness needed? Wednesday morning, May 1, the daughter didn’t show up – the entire family came in to look at the home! During the in-person tour, the husband decided that the living room in the Tunica Show house wasn’t as big as he wanted.

But what’s the forgiveness for? Michelle switched the prospect from the new house to another (older) lot model that the husband really liked, and also spec’d out a RSO unit to the same people! One house advertised on the web, two houses sold off it within 48 hours!

We are pleased to see that the results of the web-site advertising seem to be sustaining. Since May 1, 10 of the 13 new-house deals closed have originated from the web! And here’s the kicker: The invoice of every one of these houses has been more than the average sales price of the previous 12 months!

We have experienced 10-minute cash sales from the web, customers coming in with their first question “Where is the house that I saw on your website?” and even a contact from Virginia Beach inquiring about a buy-for house for the parents, who live in north Mississippi. That one hasn’t gelled yet, but we do have an email reply stating intent for the daughter and her brother to fly down in the near future to meet with our sales center manager.

BTW, all of our web-site efforts are an out-growth of the seminar that Tony Kovach and his associate Bob put on in Louisville in 2011.  Our web advertising firm was just getting up and running on our gig about then, and I invited them to come to Louisville to hear that presentation.

Does this mean that we will continue like this? Who knows? But we’re going to do every thing we can to keep our ‘road frontage’ as pretty and shiny as possible! I would recommend that all retailers seriously consider doing the same. ##

Submitted by:
R.E. Crawford, President
Dick Moore, Inc.,
Millington TN

Avoiding the Perception and Reality of Discrimination

August 3rd, 2011 1 comment

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

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

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

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

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

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

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

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

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

White House reply to MHMSM.com initiated discussion

January 28th, 2010 5 comments

In a reply to correspondence with President Barack Obama by our www.MHMSM.com editor, here is the message that came in from the White House…


Dear Friend:

Thank you for writing. The images from Haiti of
collapsed hospitals, crumbled homes, and men and women
carrying their injured neighbors through the streets are truly
heart-wrenching. As we learn more about the extent of the
devastation, our thoughts and prayers are with the people of
Haiti.

I have directed my Administration to respond with a
swift, coordinated, and aggressive effort to save lives. The
people of Haiti will have the full support of the United
States Government in the recovery and rebuilding effort,
including the humanitarian relief–the food, water, and
medicine–that Haitians will need in the coming days.

This is also a time when we are reminded of the
common humanity we all share, and Americans have
always responded to these situations with generosity of
spirit. If you would like to support the urgent humanitarian
effort in Haiti, I encourage you to visit our website where
you can learn more about how to contribute:

http://www.WhiteHouse.gov/HaitiEarthquake

Americans trying to locate family members in Haiti
are encouraged to contact the State Department at (888)
407-4747.

We will continue to stand with the people of Haiti
and keep them in our thoughts and prayers.

Sincerely,

Barack Obama


This response came in prior to the President’s State of the Union Address, where he often spoke about jobs. His reply does not specifically address the pressing issue of using America’s factory-built housing industry as part of a concerted response that would house Haitians and create American jobs building strong, modest homes and installing those homes under American leadership. The http://www.mhmarketingsalesmanagement.com/blogs/tonykovach/a-call-to-action/ still makes sense, and we as Industry members should continue to press for a specific response from the President and from your Senators and Congressman.##