by Brian Gallagher
Editor’s note: Brian Gallagher thoughtfully shared the comments below with MHProNews for publication.
Gallagher’s thoughts in full follow in the letter to FHFA Duty To Serve Program Director Jim Gray, below.
--- forwarded letter ---
Mr. Jim Gray March 20, 2017
Director, Duty to Serve Program
Federal Housing Finance Agency
400th St. SW
Washington, DC 20024 Re: Request for Input (RFI): Support for Chattel Financing of Manufactured Homes
Dear Mr. Gray,
OVERVIEW of OUR RESPONSE to FHFA QUESTIONS:
In summary, we are very confident that the Enterprise’s support of a secondary market for manufactured home community (MHC) chattel loans would be a win-win-win. Secondary Market Investors (SMI) would receive higher yield investments with mitigated risk characteristics. Consumers would have access to more lending sources which, among other key benefits, would lower borrowing costs and unlock the equity value in their manufactured homes. MHC chattel home loan originators would have a source of funds to replenish their lending pools, leading to greater activity, jobs, and more Quality Affordable Housing for a presently unsubsidized and underserved consumer market. The Enterprises could bring this about through leading the development of “template transactions” – standardized documents, PMI, and “Park Agreements”, pursuant to which the MHC’s in which the loan collateral is located agree to cooperate with originators and SMI to mitigate the risk of loss arising from borrower default. In sum, the Enterprises’ promotion of a chattel loan secondary market would satisfy their “Duty to Serve” the lower economic classes which are disproportionately dependent upon manufactured home community living for their quality affordable housing needs.