4,504 New HUD-Code Homes Shipped in 
March 2013 – Down 4.1 Percent from March 2012

MHI’s Monthly Economic Report© for March 2013 is now available. 

In March 2013, 4,504 new manufactured homes were shipped, down 4.1 percent from March 2012. Shipments by housing type moved in opposite directions with single section homes down 9.9 percent compared with the same month last year while shipments of the multi-section homes improved by 1.6 percent. Total floors shipped in March 2013 were 6,976, a decrease of 2.2 percent compared with March 2012.

In comparison with 2012, 2013 registered an increase in January shipments followed by a decline in February and March. For the first three months of this year, shipments totaled 12,811 homes compared with 12,780 homes in 2012, a net increase of 0.2 percent.

The seasonally adjusted annual rate (SAAR) of shipments was 56,119 in March 2013, down 7.5 percent from the adjusted rate of 60,650 in February 2013. The SAAR corrects for normal seasonal variations and projects annual shipments based on the current monthly total.

The number of plants reporting production in March 2013 was 122, unchanged from the prior month and the number of active corporations was 46, up two from February 2013.

To: MHI Certified and Alternate Representatives

From: Jason Boehlert, MHI Government Affairs

Late last week, Reps. Stephen Fincher (R-TN), Bennie Thompson (D-MS) and Gary Miller (R-CA) introduced the Preserving Access to Manufactured Housing Act (H.R. 1779).  The measure would amend provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that would curtail the availability of credit needed by those seeking to purchase manufactured housing.  Specifically, the bill would revise the High-Cost Mortgage triggers for manufactured home loans, and make clarifications to the Loan Originator definition as it applies to manufactured home retailers and salespeople.  These two areas of the law—which are scheduled to become effective January 2014—would substantially reduce lender ability to originate manufactured home loans.   

Assistance is needed from MHI members and others within the manufactured housing industry, in contacting their Representatives to request they co-sponsor H.R 1779.  A detailed issue brief/action alert, along with a sample letter that can be faxed to Congressional offices, has been attached to this email.  The following resource information has also been attached:

·         April 24 Wall Street Journal Article discussing the impact of the High-Cost Mortgage Provisions on the manufactured housing market

·         MHI News Release following introduction of H.R. 1779

·         Text of H.R. 1779

Over the coming weeks, Sen. Sherrod Brown (D-OH) is expected to introduce companion legislation in the Senate.  Additional information will be provided at that time.

MHI is grateful for the dedicated assistance provided by its members in working to secure bipartisan support for this important legislation.  Please feel free to contact me if you have any questions.

HR 1779 Action Alert.pdf

SAMPLE LETTER for HR 1779.docx

MHI WSJ.PDF

04 26 Bill Intro FINAL.PDF

HR 1779.pdf

Positive Energy Flows at the 2013 National Congress & Expo for Manufactured and Modular Housing

MHI would like to thank the 830 attendees, speakers, sponsors, and exhibitors that helped make the 2013 Congress & Expo for Manufactured and Modular Housing a great event. Attendance was up 18 percent over last year’s Congress & Expo. Attendees from all sectors of the industry and from across the country convened at the Paris Hotel in Las Vegas on April 16th – 18th to take advantage of the educational sessions, the National Communities Council (NCC) Forum, networking opportunities, and to see the latest and greatest products and services offered by the exhibitors.

Sponsored by Wells Fargo, the Wednesday general session Keynote speaker was Ro Khanna, a former Deputy Assistant Secretary at the Department of Commerce. Khanna managed the 108 domestic Commerce offices that help U.S. companies export and innovate. In that role, Khanna became an advocate for an economic growth agenda focused on advanced manufacturing and dynamic service industries. He authored the book, Entrepreneurial Nation, which discusses the future of American manufacturing and provides many examples of successful U.S. manufacturing companies and identifies the attributes and policies that contribute to their success. 

Sponsored by Assurant Specialty Property, Thursday’s general session speaker was Dr. Celia Chen, senior director at Moody’s Analytics, where she specializes in housing economics. Dr. Chen provided information on recent housing market gains and predictions for the future. She provided evidence of strengthening economic growth which in turn fuels increased household formation. In addition, housing continues to be undervalued in many markets throughout the U.S. and housing affordability remains high. Combined with stabilizing lending standards, she demonstrated that home sales will strengthen. The pace of homebuilding continues to be below normal and this will help absorb excess housing (vacant homes for sale, for rent, or held off the market). She demonstrated that the new home market is tightening in terms of supply and the number of months on the market. This will result in a ramping up of residential construction and she predicted that manufactured home shipments will also rise during the next few years. Click here to view Dr. Chen’s presentation.

Twelve educational workshops were presented by outstanding speakers and panels. Wednesday’s workshops were sponsored by Neace Lukens and Thursday’s workshops were sponsored by RHP Properties, Inc. The workshops covered the following topics: Surging Demand for Manufactured Housing in Energy Boom Areas; Maximizing Ancillary Revenue from Cable TV Providers; AML/SAR, SAFE Act and Lease-to-Purchase – What You Need to Know; Increase Customer Confidence by Improving Your Retail Sales Center Environment; Managing Your Community Water Systems; MHI Legislative and Regulatory Update; Are There Business Opportunities in the Home Resale Market for Retailers; Lending and the Impact of Dodd-Frank on the Manufactured Housing Industry; Enhance Your Professional Image; Attracting More Cash and Credit-Worthy Customers to Your Sales Center; Ask the Attorneys; and Protecting Your Business, Saving Money and Planning for the Future. To view handout materials from the workshops, click here.

During the 2013 National Awards Luncheon, awards were presented to communities, retailers, manufacturers, and companies who provide outstanding customer service and leadership for the industry. Click here to view the awards presentation. Click here to view the press release highlighting the award-winning industry members.

Please mark your calendars for the 2014 Congress & Expo which will be held April 15-17, 2014 at the Paris Hotel in Las Vegas.

Once again, MHI thanks the 2013 Congress & Expo exhibitors and sponsors.

Sponsors

Diamond Sponsors

Marcus & Millichap
Sunstone Manufactured Housing Consultants

Platinum Sponsors

Oliver Technologies, Inc.
Wells Fargo

Gold Sponsors

Assurant Specialty Property
GE Capital Real Estate
Green Courte Partners, LLC
Inspire Communities
Neace Lukens
Rent Manager
RHP Properties, Inc.
UMH Properties, Inc.
Yes! Communities

Silver Sponsors

Hart, King & Coldren
Lippert Components, Inc.

Bronze Sponsors

21st Mortgage Corporation
ARA Manufactured Housing Group
CU Factory Built Lending
Riverstone Communities
Shaw Industries
Sun Communities, Inc.
U.S. Bank

2013 NCC Spring Forum (formerly NCC Forum): Record Attendance & New Name

“Very informative, lots of fresh ideas,” is the feedback from attendees of last week’s NCC Spring Forum on April 16th in Las Vegas. With record attendance, participants overwhelmingly indicated high satisfaction with the quality of speakers, content, and topics. 

The morning’s key note speaker, LaVaughn M. Henry, Ph.D., Vice President and Senior Regional Officer of the Cincinnati Branch of the Federal Reserve Bank of Cleveland, provided his view of the U.S. economy. Walking the audience through statistics which addressed employment, household and business spending, and inflation, Dr. Henry stated that the economy continues to recover, although slowly by historical standards. He further noted that residential real estate markets are showing signs of strength in supply and demand. With a dynamic delivery, attendee comments described this session as both “entertaining and outstanding.”

The “Acquisitions from the Acquirer’s Perspective” panel discussion was also well-received. Moderated by Todd Fletcher of ARA Manufactured Housing Group, questions to the panelists covered a variety of topics such as acquisition criteria, method of locating recent acquisitions, and market trends of financing. The “Managing Inventory for Your Community” featured MHI Chairman Nathan Smith as a panelist who offered his perspective on dealing with vacancies and when to refurbish or replace. 

Noted social media strategist Crystal Washington provided a realistic, hands-on approach to understanding the role of social media in today’s business environment. “You may not actually use it,” she advised, “but you must beaware of what’s being said about your business.” With riveting, high-energy video clips, plus ten steps for building a social medial strategy many attendees noted her emphasis on “practical” implementation. Commented one attendee, “I don’t Tweet and won’t. But, I learned that it is useful – big leap!”

Many attendees commented on the practical ideas shared during the “Collecting Rent – Balancing Art & Science” panel discussion moderated by Richard Winkelman of Brookside Communities. Presenting ideas from large owners and regional managers, this discussion ranged from initial resident screening to the initiation of legal proceedings. The panel also fielded a variety of “how to” questions from the audience.

Despite being the last session of the day, after several highly informative sessions, the closing panel received the second highest vote as the “favorite” part of the day. Moderated by John McLaren of Sun Communities, “Executive Viewpoint: Customer Service Is the Future” featured senior officers from some of the largest community owners discussing the importance of quality service. Comments about this panel included “I’m always amazed at how involved the speakers are with customers” and “lots of doable actions to take home and implement.” 

Last week’s event also reflected an updated name as the NCC Spring Forum, which was formerly known as the MHI National Communities Council Forum, since the NCC has announced the creation of its new Fall Leadership Forum which will debut October 16th -18th in downtown Chicago. The theme of this exciting new flagship event is “Building a Vision for the Future” and includes Sam Zell, Chairman of Equity Group Investments, as a featured speaker at this year’s inaugural event. These two events provide members with unparalleled networking and educational opportunities. 

MHI Financial Services Update

Wall Street Journal Examines HOEPA’s Impact on Manufactured Housing

On April 24th, the Wall Street Journal detailed MHI’s efforts to reform a provision in the Dodd-Frank Act that would severely curtail the availability of credit needed by low- and moderate-income families seeking to purchase manufactured housing. MHI has been working to spotlight certain provisions of the law that could substantially curtail credit access for the purchase of affordable manufactured housing. MHI continues to work on enactment of legislation and regulations to minimize the law’s unintended impacts on the manufactured housing market. Click here to view the article.

CFPB Issues QM Clarifications

On April 19th, the Consumer Financial Protection Bureau (CFPB) issued proposed clarifications to five areas of the recently released ability-to-repay/Qualified Mortgage (QM) rulemaking. The proposed rulemaking includes a clarification in calculating debt-to-income (DTI) ratio—which incorporates FHA DTI calculation guidelines. Also included are clarifications regarding the small servicer exemption, Reg. X (RESPA) preemption, and temporary QM status. To view the proposed clarifications click here. 

Escrow Rule Compliance Guide Released by CFPB

On April 22nd, the CFPB issued a compliance guide for the Truth in Lending Act (TILA) escrow rule that was finalized in January 2013. The rule increases to five years the minimum time for which lenders must maintain an escrow account on a “higher-priced” mortgage secured by a first lien. Institutions serving rural and underserved areas, as well as institutions with less than $2 billion in assets and that originate fewer than 500 first-lien covered loans annually, may qualify for an exemption from the rule, which takes effect June 1st. The guide covers some additional exemptions from the rule. To view the guide, click here.

Legal Aspects of Social Marketing Examined

On May 8th, Ballard-Spahr will be conducting a webinar examining the legal issues that companies should consider when using social media sites, such as Twitter and Facebook, when marketing financial products. The webinar is free and will take place at 12:30 pm ET on May 8th. For more information,click here.

Panel Examines Reform of Housing and Real Estate Tax Deductions

In an April 25th hearing before the House Ways and Means Committee, housing and tax advocates examined how certain Federal tax provisions affect the housing sector and homeownership. Leaders of the both the House Ways and Means and Senate Finance Committees are both considering reforms to the home mortgage interest deduction. It is estimated in 2012, the home mortgage interest deduction cost the government $68 billion in lost revenue.

Critics of the deduction have argued it does little to encourage homeownership and instead provides a benefit to higher-income households to purchase larger homes. The deduction is available only to the one-third of taxpayers who itemize their deductions and tend to have higher incomes. More than three-quarters of the benefit in 2012 went to households with annual incomes exceeding $100,000.

During the hearing, the National Association of Homebuilders cited studies indicating that home prices could rise by as much as 15 percent if the deduction was eliminated or substantially curtailed. President Obama’s FY 2014 budget request includes a significant reduction in the mortgage interest deduction. However, any modification to the deduction would require Congressional approval.

House Ways and Means Committee Chairman David Camp (R-MI) has vowed that he would give “careful, thoughtful review” of tax breaks for homeowners, including the mortgage interest deduction.

For more information on the hearing, click here.

CFPB Releases Semiannual Report

On March 29th, CFPB released its third semiannual report, which covers its activities from July 1, 2012 through December 31, 2012. The report reviews the CFPB’s supervision, enforcement, and rulemaking activities over the subject period. 

CFPB Director Richard Cordray testified before the Senate Committee on Banking on April 23rd, where the main points of contention were the CFPB's collection of data on Americans' credit habits, as well as debt collection practices and the activities of the payday lending industry. 

In an interesting twist, the House Financial Services Committee did not hear testimony from Director Cordray because, as House Chairman Hensarling stated, “The court’s unanimous ruling makes it clear that there is no legally-appointed director of the CFPB at this time. By law, the committee can receive this testimony only from a director who is appointed in accordance with the Constitution and the Dodd-Frank Act, which created the bureau.” (While President Obama purported to appoint Richard Cordray to the position on January 4, 2012, a unanimous federal appeals court ruling on January 25, 2013 found that the process by which Cordray was appointed was constitutionally invalid.)

House Financial Services Committee Holds Seventh Hearing on Reforming Fannie Mae and Freddie Mac, Addresses Amending the Dodd-Frank Act

On Wednesday, April 24th the House Financial Services Committee held a hearing entitled, "Building a Sustainable Housing Finance System: Regulatory Impediments to Private Investment Capital." This is the seventh hearing the committee has had on reforming the Government Sponsored Enterprises (GSEs) - Fannie Mae and Freddie Mac. Privatizing the GSEs is the top priority for House Financial Services Committee Chairman Jeb Hensarling (R-TX). 

As many Americans know, before the financial crisis of 2008, the securitization of residential mortgages in the U.S. was provided by Fannie Mae, Freddie Mac, and private mortgage securitizers. Fannie Mae and Freddie Mac were created to compete for a share of the housing finance market, which would increase the supply of mortgage credit and lower costs for consumers.

Notwithstanding the competitive advantages conferred upon the GSEs by their government-backed charters, the GSEs’ charters prohibited them from purchasing and securitizing certain mortgages. Private issuers of mortgage-backed securities (MBS) purchased and securitized the mortgages that the GSEs were prohibited from purchasing. The private-label MBS market thrived as private sector investors sought out new opportunities to gain a return on their capital without relying on government-backed loans. Between 2002 and 2007, private issuers sold more than $3 trillion in MBS. 

But in 2008, with the onset of the financial crisis, the private securitization market came to a halt. Holders of many private-label MBS suffered severe losses as defaults rose and the value of the homes serving as collateral for the underlying mortgages fell. New private-label MBS issues fell dramatically. 

The downturn in the housing market that crippled the private MBS market also proved ruinous for Fannie Mae and Freddie Mac, which had also invested in some MBS. By September 2008, it was clear that both Fannie Mae and Freddie Mac were insolvent, and the U.S. government stepped in to place both firms under conservatorship, with the financial backing of U.S. taxpayers.

Conservatorship has allowed the GSEs not only to continue their mortgage market operations but also to greatly expand their market footprint and effectively drive some private sector competition out of the market. As a result, the U.S. government is now responsible for nearly all of the securitization market, with approximately 75 percent performed by the GSEs in conservatorship and roughly 25 percent performed by Ginnie Mae, which securitizes mortgages insured by the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA). 

Beyond the market domination of the GSEs, there have been a number of regulatory changes that have created impediments to the private investment capital in the housing finance sector. MHI, as well as many other housing finance associations, remain concerned about several provisions of the Dodd-Frank Act (P.L. 111-203) that will likely further affect the mechanics of U.S. housing finance.

At the hearing, Chairman Hensarling noted, “I know that many of my friends on the other side of the aisle have much invested in the Dodd-Frank law and its brand, and I respect that. But if you agree that private capital and not taxpayer capital should be the foundation of our housing finance system, then I hope you will have open minds that perhaps some limited number of provisions of the Dodd-Frank law perhaps could be refined and improved upon at this time." Mr. Hensarling also specifically stated that he believes that the Qualified Mortgage (QM) and Qualified Residential Mortgage (QRM) regulations need to be carefully examined. 

Later in his comments, Chairman Hensarling also noted his stark contrast in views on this subject with President Obama, mentioning the April 2ndWashington Post article, ‘Obama Administration pushes banks to make home loans to people with weaker credit.’

“Had the story been posted April 1st I might have thought it was an April Fools’ joke. I asked the question, ‘Have we as a nation learned nothing?’ The article went on to say that the Obama housing officials were urging Obama justice officials to offer banks the equivalent of ‘get out of jail free’ cards if they would lend money to folks with weaker credit." 

For more information on this topic, to watch the hearing, or to read witness testimony click here to view the financialservices.house.gov website andclick here to view the article in the Washington Post. 

Top National News

Commercial Lenders More Aggressive as Economy Heals

The economy is slowly improving and so are commercial real estate fundamentals, according to the general consensus at the Mortgage Bankers Association's recent Commercial Real Estate Finance/Multifamily Conference in San Diego. Peter Gineris, senior vice president of debt and equity at CBRE/Capital Markets in Albuquerque, says the mortgage markets have more liquidity now than in 2007, different types of financing are available, and competition among lenders will pick up this year. Although credit spreads have narrowed over the last two quarters, he says they cannot move much lower, so borrowers will see any increases in Treasury yields passed on to them. The third quarter of 2012 saw a shift toward more aggressive lending, and an increase in payoffs and a decrease in problem loans mean lenders have room on their balance sheets for CRE loans. Non-recourse lending has returned in some markets, and some banks are granting loans with seven-year terms or longer. Gineris expects larger lenders to invest in "first tier" cities, with small and medium-size lenders beefing up activity in smaller markets.

From "Commercial Lenders More Aggressive as Economy Heals" 
Albuquerque Journal (04/22/13) Gineris, Peter J.

Americans' Optimism About Home Prices Surges This Year

Gallup's annual Economy and Personal Finance Survey of more than 2,000 Americans and 1,400 homeowners reveals that more than half believe average home prices in their areas will rise over the next year, marking the first time that figure has topped 50 percent in six years. Regionally, 62 percent of those from the West expect home prices to rise, compared to slightly less than 50 percent in other parts of the country. Sixty-three percent of homeowners polled say their houses are worth more than the purchase price, up from 53 percent in 2012. By age, 52 percent of homeowners under age 50 and 71 percent of those aged 50 and up say their homes are worth more than when they bought them. The finding signals that younger homeowners made more recent purchases and were more affected by the housing downturn. An estimated 73 percent of respondents believe now is a good time to buy, marking a 10-year high; that figure was 87 percent among those earning $75,000 or more, 76 percent among middle-income Americans, and 55 percent among those earning less than $30,000. The survey indicates that the housing market has stabilized, residential prices are on the rise, and upper-income Americans are the most optimistic about home purchases.

From "Americans' Optimism About Home Prices Surges This Year" 
Gallup Economy (04/18/13) Jones, Jeffrey M.

Industry News

Smith Earns Promotion

Nathan Smith, a member of the Manufactured Housing Institute's PAC Board of Trustees, now is also the organization's chairman. Smith previously held leadership positions not only within MHI at the national level but also at the state level through the Indiana Manufactured Housing Association and the Kentucky Manufactured Housing Institute. He is a partner in SSK Communities -- which sells, finances, and insures manufactured homes as well as manages manufactured home communities in Kentucky, Ohio, and Indiana.

From "Smith Earns Promotion" 
Cincinnati.com (OH) (03/29/13)

Champion Home Builders Wins Modular Building Institute's 'Best of Show'

Champion Home Builders' off-campus student housing project in New York has won it the Modular Building Institute's Best of Show award for 2013. The four-story modular structure, including one- to three-bedroom apartments, houses student and faculty of Cornell University in Ithaca. "Champion works hard to manufacture the best buildings in the industry and we are incredibly pleased to be recognized by the modular building industry and our peers with this honor," Champion Home Builders CEO Jack Lawless remarked. "The modules for the Cornell project were placed on the podium in just five working days, a premier example of a major benefit of the modular building process."

From "Champion Home Builders Wins Modular Building Institute's 'Best of Show'" 
PR Web (03/26/13)

YES! Communities Acquires 64 Manufactured Housing Communities

Denver-based YES! Communities has closed on its purchase of 64 manufactured home communities from American Residential Communities (ARC), also based in Denver. Under the terms of the deal, YES! Communities gains more than 14,000 home sites in Atlanta, Ga.; Dallas, El Paso, and Corpus Christi, Texas; and Los Alamos and Las Cruces, N.M. It also agrees to take on 180 former ARC employees. Including the new properties, YES! Communities owns and operates 181 manufactured housing communities, including 46,000 individual lots, in 17 states.

From "YES! Communities Acquires 64 Manufactured Housing Communities" 
International Business Times (04/05/13)

Manufactured Home Community Operator Buys on Dickerson Road

UMH Properties, based in New Jersey, is the new owner of Holiday Mobile Village -- its fifth property in the mid-state region of Tennessee. The purchase price for the manufactured home community, which is 82 percent occupied, was $7.25 million. With its latest acquisition, UMH now owns a total of 1,263 developed home sites in middle Tennessee and an estimated 12,800 in all.

From "Manufactured Home Community Operator Buys on Dickerson Road" 
Nashville Post (04/03/13) Lind, J.R.

Deer Valley Corporation Teams With CIS to Increase the Availability of Affordable Loans for Qualified Retail Buyers of Factory-Built Homes

Manufactured home builder Deer Valley Corp. confirms that, through its financing arm, it has entered into an arrangement that will increase the availability of retail financing for buyers of factory-built housing. The Tampa, FL-based company is providing a secured line of credit of up to $2.5 million to CIS Home Loans, which will use the money to fund "construction-to-permanent" mortgages for buyers of manufactured and modular homes. Such financing was largely shunned by banks following the financial meltdown of 2008, according to Deer Valley CEO Charles G. Masters. However, he adds, "This specific source of retail financing is very important to the entire housing industry, and because of the short construction time associated with manufactur[ed] housing and modular housing, the actual funding risk is exceptionally low."

From "Deer Valley Corporation Teams With CIS to Increase the Availability of Affordable Loans for Qualified Retail Buyers of Factory-Built Homes" 
Wall Street Journal (04/15/13)

Help Now Available for Debt-Plagued Manufactured Home Owners in Delaware

Officials in Delaware are using some of the state's share of the National Mortgage Foreclosure Settlement to help distressed owners of manufactured homes. Previously, these homeowners had little recourse if they became delinquent on their mortgages or lot rents. Now, under the Manufactured Housing Assistance Program, they can receive up to $5,000 in assistance if they have suffered an income reduction of 15 percent or more due to illness, injury, or loss of employment through no fault of their own. The aid is delivered in the form of a zero-interest loan secured by a lien on the home; and it must be repaid if the property is refinanced or sold, if the title is transferred, or if the borrower relocates. The initiative was developed by the Delaware State Housing Authority (DSHA) and the office of Attorney General Beau Biden after talking with both manufactured home owners and landowners in the state. An estimated 11 percent of the housing supply in Delaware is made up of manufactured homes, but authorities have been challenged in finding an assistance solution for this segment of the population. "Now," according to DSHA director Anas Ben Addi, "we have access to a funding source without any strings attached."

From "Help Now Available for Debt-Plagued Manufactured Home Owners in Delaware" 
Dover Post (04/17/13) Brown, Jeff

Manufactured Home Limits Challenged

Legislation proposed by North Carolina state Rep. Nathan Ramsey (R-Buncombe County) seeks equal zoning treatment of manufactured homes with other kinds of single-family housing. A number of counties have restrictions in place that block manufactured housing in some areas, which Ramsey says squeezes the availability of affordable homes. His measure, he explains, is "a response to so many people out there who own a piece of land, and the government says they can't put a home they can afford on their land." As written, the bill prohibits counties from adopting or enforcing regulations that exclude manufactured homes from being placed on individual lots in areas zoned for single-family residential use. An exception is provided for historic districts. Counties would still have the power to set design standards for manufactured homes.

From "Manufactured Home Limits Challenged" 
Asheville Citizen-Times (04/13/13) Morrison, Clarke

NJ Sandy Victims Moving Into Modular Homes

A $1 million grant from the Robin Hood Foundation has made it possible for some victims of Superstorm Sandy to move into permanent, modular housing. The Affordable Housing Alliance used the funding to buy 17 modular homes in New Jersey, all of which will be inhabited by low-income residents whose previous homes or apartments were destroyed by the storm. After spending five months living in hotels, with friends, and in other temporary shelter, 65-year-old Mary Brooks has moved into in a two-bedroom modular home. She pays $850 per month for the house, which she heard about through a social service agency.

From "NJ Sandy Victims Moving Into Modular Homes" 
Wall Street Journal (03/29/13)

MHI News

Calendar Alert: 2013 NCC Fall Leadership Forum Announced

The National Communities Council is excited to announce the addition of a new leadership and networking event to be known as the NCC Fall Leadership Forum. The event will be held on October 16th-18th in downtown Chicago. This year’s theme for the annual event is “Building a Vision for the Future.” The NCC is pleased to report that Sam Zell, Chairman of Equity Group Investments, is a featured speaker at this year’s inaugural event.

While NCC staff and leadership are working through a variety of details, the plan is to host a networking event on the evening of Wednesday, October 16th, have a full day of programming plus a major networking event on Thursday, October 17th, and end the program by noon on Friday, October 18th. There will be significant networking opportunities throughout the event in the spirit of bringing industry leaders together, sharing knowledge, and building relationships. 

David Lentz, NCC Chairman and President and CEO of American Land Lease, Inc., commented, “With the housing market recovery well underway and our members getting more and more excited about the future, we felt the time was right to create a flagship event that will signal the next phase of success for the NCC and growth for our industry. Our goal is to make the NCC Fall Leadership Forum a total knockout and the ‘can’t miss’ industry event of the fall. The terrific team at MHI is poised to make this a winner.” The intent is to offer an unparalleled program including industry veterans and leaders as well as strategic perspective from outside the industry that would be of interest to our industry’s leaders, including not just community owners, but also manufacturers, lenders, consultants, and service providers.

The NCC will continue to communicate information about this event as it develops but be sure to mark the calendar for October 16th-18th in Chicago. “Exciting things are happening for the NCC on many fronts,” noted NCC Vice President Jenny Hodge, “and we look forward to seeing you in Chicago.” To receive updates on this dynamic new event, go to www.mhcommunities.org/cm/calendar/RegInfo.asp to enter your contact information.

2013 National Congress & Expo for Manufactured and Modular Housing Held on April 16th-18th in Las Vegas

This year’s Congress & Expo attendance was the largest in several years. Thanks to our sponsors, exhibitors, and attendees, all of whom helped to make this a great event! 

A summary of the event will be provided in the April 26th MHI Week in Review and on MHI's Web site at www.manufacturedhousing.org.

Save the date for next year’s Congress & Expo which will return to the Paris Hotel in Las Vegas on April 15th–17th.

Financial Services Policy Update

FDIC Holding Free Teleconferences on Mortgage Rules

Through May and June the Federal Deposit Insurance Corporation (FDIC) will hold three free teleconferences on mortgage rules recently released by the Consumer Financial Protection Bureau (CFPB), and will cover:

• The first teleconference will focus on the CFPB's final rules on the ability to repay, qualified mortgage standards, escrow requirements, and the loan originator compensation requirements involving the prohibition on mandatory arbitration clauses and single premium credit insurance. The call will be held on Thursday, May 2, 2013, from 2:00 p.m. to 3:30 p.m. EDT.

• The second teleconference will focus on the CFPB's final rules on mortgage servicing. The call will be held on Wednesday, May 15, 2013, from 2:00 p.m. to 3:30 p.m. EDT.

• The third teleconference will focus on the CFPB's final rules on loan originator compensation and changes to the Home Ownership and Equity Protection Act (HOEPA). The call will be held on Thursday, June 6, 2013, from 2:00 p.m. to 3:30 p.m. EDT. 

For more information or to register, click here to visit the FDIC web site.

CFPB Unveils Qualified Mortgage Compliance Guide for Small Entities

On April 10th, the CFPB published its Small Entity Compliance Guide for the Ability-to-Repay and Qualified Mortgage Rule. According to the agency, the aim of the guide is to provide “a comprehensive rule summary in a plain language and FAQ format, which makes the content more accessible and consumable for a broad array of industry constituents, especially smaller businesses with limited legal and compliance staff.” The guide is part of a series that will be published by the CFPB on each of the new mortgage rules. To view the guides, click here.

Housing Finance Groups Press CFPB for Extension on Mortgage Rule Implementation

In a letter to CFPB Director Richard Cordray, the American Bankers Association (ABA), Consumer Bankers Association (CBA), and Financial Services Roundtable and Housing Policy Council urged the agency to publish “much-needed” clarifications on its new mortgage-related rules and to extend the rules’ compliance deadlines.

The groups emphasized that they are repeating their request that the agency use its exemption authority to extend the mortgage rules’ compliance deadline from 12 months to 18 to 24 months. In the letter the groups state:

“Without more time to comply, we are concerned certain lenders may choose to mitigate the resulting operational risks by reducing, or even eliminating, their mortgage lending activities. This will be devastating to the industry and reduce mortgage loan options for consumers at a time when all agree there should be an increase in responsible mortgage lending.”

Click here to view the letter.

27 States Set to Adopt Uniform SAFE Act MLO Test

On April 1st, the Conference of State Bank Supervisors (CSBS) announced that more then 20 states were set to implement a new National SAFE MLO Test Component with uniform state content. In these states mortgage loan originators (MLOs) seeking licensure with their state regulatory agency will no longer be required to take a second state-specific test component. 

According to CSBS, Delaware, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, New Hampshire, North Carolina, North Dakota, Pennsylvania, Rhode Island, South Dakota, Utah, Virginia, Washington, and Wisconsin will no longer require a state-specific test component beginning April 1st. 

Five additional states – Alaska, Kansas, Nebraska, Tennessee, and Vermont – will adopt the test on July 1, 2013. Two additional state agencies, the Texas Office of Consumer Credit Commission and the Texas Department of Savings and Mortgage Lending, will begin using the test on October 1, 2013. Remaining state agencies will continue to require state-specific test components, though additional states are eventually expected to adopt the new National SAFE MLO Test Component with uniform state content.

For more information, click here to visit the CSBS web site.

Ballard-Spahr to Conduct Free Webinar Examining Regulatory Challenges to Lender-Placed Insurance

Following recent interagency guidance on implementing revisions to the Flood Disaster Protection Act (FDPA) that increase penalties for FDPA violations, require new disclosures, and establish escrow accounts, the law firm of Ballard-Spahr will be hosting a free webinar on May 29th highlighting some of these revisions. Click here for more information.

The webinar will also highlight the new wave of litigation and regulatory action facing mortgage lenders and servicers arising from force-placed insurance, assess recent changes to the National Flood Insurance Program, and changes to agency regulation and guidance that will affect how mortgage servicers administer their hazard and flood insurance programs. 

For more information, click here.

Financial Services Committee Top Democrat Open to Dodd-Frank Technical Changes

On April 10th in a speech before the U.S. Chamber of Commerce, House Financial Services Committee Ranking Member Maxine Waters (D-CA) indicated that she is willing to make changes to the Dodd-Frank Act, but only if they are “truly technical.”

Waters indicated she is not open “to wholesale revisions to the act, or receptive to packages of bills which, taken as a whole, essentially repeal its key provisions or dismantle it piece by piece.” However, “there may be some room for modification in some areas.”

For more information click here.

FHA Policies and Practices at Center of Financial Services Committee Hearing

On April 10th, the Financial Services Subcommittee on Housing and Insurance held a hearing examining the policies and practices of the Federal Housing Administration (FHA). The Financial Services Committee is holding an ongoing series of hearings on the need for FHA reform. Three prior hearings examined FHA insolvency, historical mission, and barriers created by FHA.

The agency has come under increasing scrutiny since last fall when an independent audit found that the FHA, which currently holds more than $1 trillion in loans in its portfolio, had expended the majority of its capital reserves due to bad mortgages. The FHA currently projects a shortfall in its Mutual Mortgage Insurance (MMI) Fund of $16.3 billion, which could necessitate a bailout from taxpayers. The MMI Fund is the government fund that insures FHA’s single-family housing portfolio.

President Obama’s FY 2014 budget request, which contains $943 million in funding to shore up FHA, was criticized by committee Republicans during the hearing, including the full Committee Chairman Jeb Hensarling (R-TX), who have called for FHA to shrink its “footprint” in the housing market to allow the private sector to take a larger role.

To view a webcast of the hearing, click here.

President Unveils FY 2014 Budget Plan

On April 10th, President Obama unveiled his $3.77 trillion FY 2014 budget request. Included in it is roughly $1.06 trillion in discretionary spending. The administration’s budget plan is expected to run into significant opposition from House Republicans, which recently adopted a $3.5 trillion budget with $966 billion in discretionary spending.

Included in the President’s request is $47.6 billion for Department of Housing and Urban Development (HUD) housing programs, an increase of $4.2 billion over FY 2013. The vast majority of the increase will be to sustain current program levels for rental and homeless assistance.

The budget contains $943 million to help shore up the Federal Housing Administration (FHA), which is pegged to run a deficit of $16.3 million in its single-family insurance fund (MMI Fund). Despite this deficit, FHA is expected to insure $178 billion in loans in FY 2014. See related article for information on manufactured housing programs.

The administration’s budget plan also assumes GSEs Fannie Mae and Freddie Mac will provide the federal government with roughly $51 billion in profit by 2023. To date, the GSEs have borrowed $187.5 billion from the federal Treasury and have paid $55.2 billion in dividends for net cost to tax payers of $132.3 billion. The White House budget anticipates Fannie Mae and Freddie Mac paying an additional $183.3 billion in dividends over the next ten years, for a net surplus of $51 billion. 

The historic levels of return recently experienced by Fannie Mae and Freddie Mac have brought into question the viability and policy makers’ commitment to reform the GSEs. Earlier this month, Fannie Mae reported profits of $17.2 billion in 2012 and Freddie Mac report a profit of $11 billion, which were the largest profits ever recorded by the GSEs.

The budget calls for a change in the carried interest rate paid by general partners in equity firms or other alternative investments. The budget would seek to tax carried interest as regular income, and not at the lower capital gains rates. In addition, the budget would seek to raise $59 billion over ten years by imposing a “financial crisis responsibility fee.” It would be a tax of 17 basis points on institutions with at least $50 billion in assets to recoup the costs of the TARP program. Enactment of these changes would depend on passage of comprehensive tax reform legislation in both the House and Senate.

Both House and Senate Budget Committees are expected to hold hearings on the administration’s plan over the coming weeks.

HUD’s FY 2014 Budget Outlines Priorities for Manufactured Housing Program – Requests Label Fee Increase

President Obama’s Fiscal Year 2014 budget, presented to Congress earlier this week, proposes to fund $7.5 million for the HUD Manufactured Housing Standards program, including $1 million in direct appropriations and up to $6.5 million in offsetting label fee collections. To fund this expenditure, HUD plans to propose a label fee increase of up to $100 per floor and expects to have a new fee in place by mid 2014. 

HUD needs $10 million in FY 2014 to administer the program, which until a few years ago, was funded almost a 100% through label fees. The $2.5 million difference between the cost to administer the program and the proposed budget will be funded through unspent funds from prior years. 

HUD’s $10 million FY 2014 budget for the Manufactured Housing Program will be allocated as follows:

• $3.3 million (the same as FY 2013) to fund 37 State Administrative Agencies (SAAs),

• $4 million (down from $6 million in FY 2013) to fund the monitoring contract to primary inspection agencies and the states,

• $1.5 million to regulate and enforce model installation standards in 17 states that do not have such programs,

• $500,000 to regulate and enforce Dispute Resolution Programs in 23 states that do not have programs,

• $100,000 for a one year contract to NFPA to administer the Manufactured Housing Consensus Committee, and

• $60,000 for meeting planner services to fund regional SAA meetings.

The HUD FY 2014 proposed expenditures reflects the opportunity for the appointment of an Administrator for the Manufactured Housing Program and a staff of 54 to administer programs to carry out the activities of the Office of Risk Management and Regulatory Affairs. 

In addition to the $10 million needed to administer the program, HUD requested eight full time employees to administer the Manufactured Home Inspection and Monitoring Program. HUD staff from the Office of Housing will carry out the additional workload activities of the manufactured housing program. The salaries and expenses for the manufactured housing program are paid out of the general HUD Salaries and Expenses account funded with congressional appropriations. 

For more information regarding the budget click here.

GAO Reports to Congress on the Benefits of State Based Manufactured Home Replacement Programs

Last Month, the Government Accountability (GAO), in response to a Congressional request, issued a report on various state programs that utilize federal energy assistance funding and other state and federal resources to provide replacement homes for low income families living in pre 1976 manufactured homes. The GAO surveyed industry representatives and took an in-depth look at three state-based programs; Montana, Maine, and Washington. The GAO report concluded that energy savings from purchasing a new home did not fully offset the costs of replacing older manufactured homes over a typical loan term. According to the report, homebuyers were able to save almost $500 per year in energy costs on a new home costing an average of $56,000. 

Not surprisingly, the GAO found that the energy savings did not fully offset the costs of replacing the older homes. However other benefits were achieved such as moving families into safer, more weather-tight manufactured homes built to a residential code which was considered just as important as increased energy savings. The report identified some challenges to utilizing the replacement programs such as the borrower’s inability to meet large down payment requirements and low credit scores. 

This report will be used by Congress to decide whether and how to most effectively spend limited federal tax dollars to provide grants to states and local jurisdictions to assist low income families pay their utility bills.

Update on GAO Request by Congress to Review the HUD Manufactured Housing Program

With two recent reports on manufactured housing recently completed, the GAO has now turned its attention to a comprehensive review of the HUD Manufactured Housing Program requested by Representative Spencer Baucus (R-AL) in late 2011. Last month, MHI members hosted a team of policy analysts from GAOs Office of Financial Markets and Community Investments, who visited six manufacturing facilities, several retail locations, and a community as well as a private third party testing facility. Many thanks to Mary Gaiski and Mark Bowersox, Executive Directors of the Pennsylvania and Indiana Manufactured Housing Associations respectively, who helped host the tours and assisted members in answering questions and providing information. 

MHI understands that GAO plans to visit and talk with other third party design and inspection agencies, manufacturers, lenders, and State Administrative Agencies as it continues its thorough examination of the manufactured housing program. It plans to complete its report by the end of the year.

MHI News

Calendar Alert: 2013 NCC Fall Leadership Forum Announced

The National Communities Council is excited to announce the addition of a new leadership and networking event to be known as the NCC Fall Leadership Forum. The event will be held on October 16-18 at the W Hotel in downtown Chicago, and this year’s theme for the annual event will be “Building a Vision for the Future.” The NCC is pleased to report that Sam Zell, Chairman of Equity Group Investments, will be a featured speaker at this year’s inaugural event.

While NCC staff and leadership are working through a variety of details, the plan is to host a networking event on the evening of Wednesday, October 16th, have a full day of programming plus a major networking event on Thursday, October 17th, and end the program by lunchtime on Friday, October 18th. There will be significant networking opportunities throughout the event in the spirit of bringing industry leaders together, sharing knowledge and building relationships. 

David Lentz, NCC Chairman and President and CEO of American Land Lease, Inc., commented, “With the housing market recovery well underway and our members getting more and more excited about the future, we felt the time was right to create a flagship event that will signal the next phase of success for the NCC and growth for our industry. Our goal is to make the NCC Fall Leadership Forum a total knockout and the ‘can’t miss’ industry event of the fall. The terrific team at MHI is poised to make this a winner.” The intent is to offer an unparalleled program including industry veterans and leaders as well as strategic perspective from outside the industry that would be of interest to our industry’s leaders, including not just community owners, but also manufacturers, lenders, consultants, and service providers.

The NCC will continue to communicate information about this event as it develops but be sure to mark your calendars for October 16-18 in Chicago. “Exciting things are happening for the NCC on many fronts,” noted NCC Vice President Jenny Hodge, “and we look forward to seeing you in Chicago.”

Financial Services Policy Update

FDIC Holding Free Teleconferences on Mortgage Rules

Through May and June the Federal Deposit Insurance Corporation (FDIC) will hold three free teleconferences on mortgage rules recently released by the Consumer Financial Protection Bureau (CFPB), and will cover:

• The first teleconference will focus on the CFPB's final rules on the ability to repay, qualified mortgage standards, escrow requirements, and the loan originator compensation requirements involving the prohibition on mandatory arbitration clauses and single premium credit insurance. The call will be held on Thursday, May 2, 2013, from 2:00 p.m. to 3:30 p.m. EDT.

• The second teleconference will focus on the CFPB's final rules on mortgage servicing. The call will be held on Wednesday, May 15, 2013, from 2:00 p.m. to 3:30 p.m. EDT.

• The third teleconference will focus on the CFPB's final rules on loan originator compensation and changes to the Home Ownership and Equity Protection Act (HOEPA). The call will be held on Thursday, June 6, 2013, from 2:00 p.m. to 3:30 p.m. EDT.

For more information or to register, click here to visit the FDIC web site.

CFPB Unveils Qualified Mortgage Compliance Guide for Small Entities

On April 10th, the CFPB published its Small Entity Compliance Guide for the Ability-to-Repay and Qualified Mortgage Rule. According to the agency, the aim of the guide is to provide “a comprehensive rule summary in a plain language and FAQ format, which makes the content more accessible and consumable for a broad array of industry constituents, especially smaller businesses with limited legal and compliance staff.” The guide is part of a series that will be published by the CFPB on each of the new mortgage rules. To view the guides, click here.

Housing Finance Groups Press CFPB for Extension on Mortgage Rule Implementation

In a letter to CFPB Director Richard Cordray, the American Bankers Association (ABA), Consumer Bankers Association (CBA), and Financial Services Roundtable and Housing Policy Council urged the agency to publish “much-needed” clarifications on its new mortgage-related rules and to extend the rules’ compliance deadlines.

The groups emphasized that they are repeating their request that the agency use its exemption authority to extend the mortgage rules’ compliance deadline from 12 months to 18 to 24 months. In the letter the groups state:

“Without more time to comply, we are concerned certain lenders may choose to mitigate the resulting operational risks by reducing, or even eliminating, their mortgage lending activities. This will be devastating to the industry and reduce mortgage loan options for consumers at a time when all agree there should be an increase in responsible mortgage lending.”

Click here to view the letter.

27 States Set to Adopt Uniform SAFE Act MLO Test

On April 1st, the Conference of State Bank Supervisors (CSBS) announced that more then 20 states were set to implement a new National SAFE MLO Test Component with uniform state content. In these states mortgage loan originators (MLOs) seeking licensure with their state regulatory agency will no longer be required to take a second state-specific test component. 

According to CSBS, Delaware, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, New Hampshire, North Carolina, North Dakota, Pennsylvania, Rhode Island, South Dakota, Utah, Virginia, Washington, and Wisconsin will no longer require a state-specific test component beginning April 1st. 

Five additional states – Alaska, Kansas, Nebraska, Tennessee, and Vermont – will adopt the test on July 1, 2013. Two additional state agencies, the Texas Office of Consumer Credit Commission and the Texas Department of Savings and Mortgage Lending, will begin using the test on October 1, 2013. Remaining state agencies will continue to require state-specific test components, though additional states are eventually expected to adopt the new National SAFE MLO Test Component with uniform state content.

For more information, click here to visit the CSBS web site.

Ballard-Spahr to Conduct Free Webinar Examining Regulatory Challenges to Lender-Placed Insurance

Following recent interagency guidance on implementing revisions to the Flood Disaster Protection Act (FDPA) that increase penalties for FDPA violations, require new disclosures, and establish escrow accounts, the law firm of Ballard-Spahr will be hosting a free webinar on May 29th highlighting some of these revisions. Click here for more information.

The webinar will also highlight the new wave of litigation and regulatory action facing mortgage lenders and servicers arising from force-placed insurance, assess recent changes to the National Flood Insurance Program, and changes to agency regulation and guidance that will affect how mortgage servicers administer their hazard and flood insurance programs. 

For more information, click here.

Financial Services Committee Top Democrat Open to Dodd-Frank Technical Changes

On April 10th in a speech before the U.S. Chamber of Commerce, House Financial Services Committee Ranking Member Maxine Waters (D-CA) indicated that she is willing to make changes to the Dodd-Frank Act, but only if they are “truly technical.”

Waters indicated she is not open “to wholesale revisions to the act, or receptive to packages of bills which, taken as a whole, essentially repeal its key provisions or dismantle it piece by piece.” However, “there may be some room for modification in some areas.”

For more information click here.

FHA Policies and Practices at Center of Financial Services Committee Hearing

On April 10th, the Financial Services Subcommittee on Housing and Insurance held a hearing examining the policies and practices of the Federal Housing Administration (FHA). The Financial Services Committee is holding an ongoing series of hearings on the need for FHA reform. Three prior hearings examined FHA insolvency, historical mission, and barriers created by FHA.

The agency has come under increasing scrutiny since last fall when an independent audit found that the FHA, which currently holds more than $1 trillion in loans in its portfolio, had expended the majority of its capital reserves due to bad mortgages. The FHA currently projects a shortfall in its Mutual Mortgage Insurance (MMI) Fund of $16.3 billion, which could necessitate a bailout from taxpayers. The MMI Fund is the government fund that insures FHA’s single-family housing portfolio.

President Obama’s FY 2014 budget request, which contains $943 million in funding to shore up FHA, was criticized by committee Republicans during the hearing, including the full Committee Chairman Jeb Hensarling (R-TX), who have called for FHA to shrink its “footprint” in the housing market to allow the private sector to take a larger role.

To view a webcast of the hearing, click here.

President Unveils FY 2014 Budget Plan

On April 10th, President Obama unveiled his $3.77 trillion FY 2014 budget request. Included in it is roughly $1.06 trillion in discretionary spending. The administration’s budget plan is expected to run into significant opposition from House Republicans, which recently adopted a $3.5 trillion budget with $966 billion in discretionary spending.

Included in the President’s request is $47.6 billion for Department of Housing and Urban Development (HUD) housing programs, an increase of $4.2 billion over FY 2013. The vast majority of the increase will be to sustain current program levels for rental and homeless assistance.

The budget contains $943 million to help shore up the Federal Housing Administration (FHA), which is pegged to run a deficit of $16.3 million in its single-family insurance fund (MMI Fund). Despite this deficit, FHA is expected to insure $178 billion in loans in FY 2014. See related article for information on manufactured housing programs.

The administration’s budget plan also assumes GSEs Fannie Mae and Freddie Mac will provide the federal government with roughly $51 billion in profit by 2023. To date, the GSEs have borrowed $187.5 billion from the federal Treasury and have paid $55.2 billion in dividends for net cost to tax payers of $132.3 billion. The White House budget anticipates Fannie Mae and Freddie Mac paying an additional $183.3 billion in dividends over the next ten years, for a net surplus of $51 billion. 

The historic levels of return recently experienced by Fannie Mae and Freddie Mac have brought into question the viability and policy makers’ commitment to reform the GSEs. Earlier this month, Fannie Mae reported profits of $17.2 billion in 2012 and Freddie Mac report a profit of $11 billion, which were the largest profits ever recorded by the GSEs.

The budget calls for a change in the carried interest rate paid by general partners in equity firms or other alternative investments. The budget would seek to tax carried interest as regular income, and not at the lower capital gains rates. In addition, the budget would seek to raise $59 billion over ten years by imposing a “financial crisis responsibility fee.” It would be a tax of 17 basis points on institutions with at least $50 billion in assets to recoup the costs of the TARP program. Enactment of these changes would depend on passage of comprehensive tax reform legislation in both the House and Senate.

Both House and Senate Budget Committees are expected to hold hearings on the administration’s plan over the coming weeks.

HUD’s FY 2014 Budget Outlines Priorities for Manufactured Housing Program – Requests Label Fee Increase

President Obama’s Fiscal Year 2014 budget, presented to Congress earlier this week, proposes to fund $7.5 million for the HUD Manufactured Housing Standards program, including $1 million in direct appropriations and up to $6.5 million in offsetting label fee collections. To fund this expenditure, HUD plans to propose a label fee increase of up to $100 per floor and expects to have a new fee in place by mid 2014. 

HUD needs $10 million in FY 2014 to administer the program, which until a few years ago, was funded almost a 100% through label fees. The $2.5 million difference between the cost to administer the program and the proposed budget will be funded through unspent funds from prior years. 

HUD’s $10 million FY 2014 budget for the Manufactured Housing Program will be allocated as follows:

• $3.3 million (the same as FY 2013) to fund 37 State Administrative Agencies (SAAs),

• $4 million (down from $6 million in FY 2013) to fund the monitoring contract to primary inspection agencies and the states,

• $1.5 million to regulate and enforce model installation standards in 17 states that do not have such programs,

• $500,000 to regulate and enforce Dispute Resolution Programs in 23 states that do not have programs,

• $100,000 for a one year contract to NFPA to administer the Manufactured Housing Consensus Committee, and

• $60,000 for meeting planner services to fund regional SAA meetings.

The HUD FY 2014 proposed expenditures reflects the opportunity for the appointment of an Administrator for the Manufactured Housing Program and a staff of 54 to administer programs to carry out the activities of the Office of Risk Management and Regulatory Affairs. 

In addition to the $10 million needed to administer the program, HUD requested eight full time employees to administer the Manufactured Home Inspection and Monitoring Program. HUD staff from the Office of Housing will carry out the additional workload activities of the manufactured housing program. The salaries and expenses for the manufactured housing program are paid out of the general HUD Salaries and Expenses account funded with congressional appropriations. 

For more information regarding the budget click here.

GAO Reports to Congress on the Benefits of State Based Manufactured Home Replacement Programs

Last Month, the Government Accountability (GAO), in response to a Congressional request, issued a report on various state programs that utilize federal energy assistance funding and other state and federal resources to provide replacement homes for low income families living in pre 1976 manufactured homes. The GAO surveyed industry representatives and took an in-depth look at three state-based programs; Montana, Maine, and Washington. The GAO report concluded that energy savings from purchasing a new home did not fully offset the costs of replacing older manufactured homes over a typical loan term. According to the report, homebuyers were able to save almost $500 per year in energy costs on a new home costing an average of $56,000. 

Not surprisingly, the GAO found that the energy savings did not fully offset the costs of replacing the older homes. However other benefits were achieved such as moving families into safer, more weather-tight manufactured homes built to a residential code which was considered just as important as increased energy savings. The report identified some challenges to utilizing the replacement programs such as the borrower’s inability to meet large down payment requirements and low credit scores. 

This report will be used by Congress to decide whether and how to most effectively spend limited federal tax dollars to provide grants to states and local jurisdictions to assist low income families pay their utility bills.

Update on GAO Request by Congress to Review the HUD Manufactured Housing Program

With two recent reports on manufactured housing recently completed, the GAO has now turned its attention to a comprehensive review of the HUD Manufactured Housing Program requested by Representative Spencer Baucus (R-AL) in late 2011. Last month, MHI members hosted a team of policy analysts from GAOs Office of Financial Markets and Community Investments, who visited six manufacturing facilities, several retail locations, and a community as well as a private third party testing facility. Many thanks to Mary Gaiski and Mark Bowersox, Executive Directors of the Pennsylvania and Indiana Manufactured Housing Associations respectively, who helped host the tours and assisted members in answering questions and providing information.

MHI understands that GAO plans to visit and talk with other third party design and inspection agencies, manufacturers, lenders, and State Administrative Agencies as it continues its thorough examination of the manufactured housing program. It plans to complete its report by the end of the year.

4,117 New HUD-Code Homes Shipped in 

February 2013 – Down 0.5 Percent from February 2012

MHI’s Monthly Economic Report© for February 2013 is now available.

In February 2013, 4,117 new manufactured homes were shipped, down 0.5 percent from February 2012. Decreases were across the board with both single section and multi section home shipments down when compared with the same month last year. Total floors shipped in February 2013 were 6,213, a decrease of 0.5 percent over February 2012.

Compared with the prior year, 2013 recorded an increase in shipments in January followed by a decline in February. For the first two months of this year, shipments totaled 8,307 homes compared with 8,084 homes in 2012, a net increase of 2.8 percent.

The seasonally adjusted annual rate (SAAR) of shipments was 60,650 in February 2013, down 4.6 percent from the adjusted rate of 63,588 in January 2013. The SAAR corrects for normal seasonal variations in shipments and projects annual shipments based on the current monthly total.

The number of plants reporting production in February 2013 was 122, one down from the prior month and the number of active corporations was 44, also down by one from January 2013.

MHI News

MHI Holds Productive Legislative Conference and Winter Meeting

MHI’s 2013 Legislative Conference and Winter Meeting, held February 24th through 26th in Crystal City, VA just outside of Washington, DC, proved to be a success with 83 industry leaders attending, similar to last year’s meeting of 84 attendees. The two-day meeting was filled with informative and well-attended division, committee, and council meetings with the focus on the primary issues to be addressed with the Congressmen in Tuesday afternoon’s meetings. 

The following is a recap of the many productive meetings and events that took place during the 2013 MHI Legislative Conference and Winter Meeting.

MHI Legislative Conference Participants Press Legislative Priorities with Members of Congress

During MHI’s Legislative Conference and Winter Meeting, attendees and MHI staff participated in more than 70 visits with U.S. Representatives, Senators and Congressional staff. The conference offered meeting participants a unique opportunity to learn about key issues impacting the manufactured housing industry, get the latest policy updates from Washington insiders and key Congressional staff, as well as encouraging their Members of Congress for reform on issues of critical importance to the industry.

In preparing conference attendees to meet with members of their Congressional delegations, MHI Vice President of Government Affairs Jason Boehlert provided an overview and talking points on the issues of critical concern to the industry. Click here to view the presentation.

Conference Speakers

MHI’s Legislative Conference and Winter Meeting was keynoted by Byron York, Chief Political Correspondent for The Washington Examiner, at a general session breakfast sponsored by Hometown America. York provided an overview of the political climate and how the recent election will impact U.S. Policy in the near term. 

At the same session, Dr. Frank Nothaft, Vice President and Chief Economist for Freddie Mac provided a briefing on the housing market to include predictions of housing performance in 2013, mortgage rates, vacancy data, rental markets, loan defaults and delinquencies.

During Monday’s luncheon, sponsored by CIS Home Loans, Representative Stephen Fincher (R-TN) addressed the membership. Rep. Fincher encouraged MHI members on delivering their message regarding CFPB and Dodd-Frank changes that are necessary to provide relief to the industry, stating that these changes are necessary to preserve affordable housing options. 

On Monday afternoon, Senator Joe Donnelly (D-IN) addressed the attendees. He emphasized his commitment to helping the industry move forward with its finance priorities on the Hill, and in ensuring that individuals with the ability to pay for a home have access to financing. He stated that he is more confident about the strength of the U.S. economy and that manufactured housing provides the quality and pricing needed to serve families in America. 

Later on Monday afternoon MHI members heard a "Housing, Finance and Political Outlook" panel discussion moderated by Dwight Fettig of Porterfield, Lowenthal & Fettig, LLC. Panel members included The Honorable Robert Ehrlich, Jr. of King & Spalding; The Honorable Paul Kanjorski; The Honorable Blanche Lincoln of Alston & Bird; John Savercool of UBS Americas, Inc.; and Warren Tryon, of the Housing Financial Services Committee.

MHI Board of Directors

The MHI Board of Directors met on Monday, February 25th. Nathan Smith, a partner in SSK Communities, assumed the position of Chairman at the beginning of the meeting after Triad Financial Services, Inc. CEO Don Glisson, Jr. announced his decision to step down as Chairman. The Board officially recognized and expressed appreciation to Glisson for his many years of service to MHI. 

MHI President and CEO Richard Jennison introduced Gay Westbrook as MHI’s new Vice President of Political and Public Affairs. In this role, she will be responsible for developing, promoting and executing MHI’s legislative and political priorities through increased industry participation in MHI-PAC, as well as strengthened coordination with state association executive directors to advance MHI’s legislative, grassroots, and fundraising initiatives at the state level. 

Jennison also discussed MHI’s newly agreed upon partnership with MHARR to work together on three industry goals: 1) to have a non-career administrator appointed at HUD to oversee the manufactured housing program; 2) to have two non-lobbyist association representatives appointed to the MHCC; and 3) to work on GSE reforms that would provide more financing opportunities for manufactured homes. 

Jennison also communicated that a Dues Restructuring Task Force will be appointed that will consist of the chairman of each MHI division and will also include MHI’s Treasurer, Phyllis Knight and MHI’s Controller, Laura Lee. The task force will examine dues for all member segments and make recommendations to the Board of Directors at the Annual Meeting in the Fall. 

Discussion was held on proposed changes to MHI’s bylaws. It was noted that the non-voting member of MHEC has never been officially added to the bylaws and discussion was also held about allowing electronic communication by the board for conducting business. 

The Federated States Division recommended that MHI consider protection of retail sales centers from the CFPB definition of a loan originator through commercial speech laws. It was noted that the Finance Lawyers Committee is exploring options at this time. The Dodd-Frank/CFPB Task Force recommended that MHI’s financial services policy priorities be focused on reforming three key areas of CFPB regulation that would, both individually and collectively, significantly limit the availability of credit in the manufactured housing market. They are: 1) HOEPA High Cost Mortgage Triggers; 2) HPML Appraisal Requirements; and 3) Loan Originator Compensation Exclusion for Manufactured Home Retailers. The Board members heard a report from the Suppliers Division Chairman regarding membership recruitment and research regarding the development a consumer oriented Web site. The MHI-PAC Chairman reported on contributions and donations as well as changes made to the MHI-PAC bylaws to have the sitting Chairman of MHI sit on the MHI-PAC Board of Directors.

Federated States Division

The Federated States Division discussed several issues that are currently having an impact on states. The Uniform Law Commission’s (ULC’s) Uniform Manufactured Housing Act was discussed. Several states report that the model act has been considered for introduction at the state level by state legislators and/or state members of the ULC. At this time, most states have decided not to consider the model act. Members also discussed the CFPB’s definition of a loan originator and loan originator compensation. MHI is concerned this definition creates unintended and unwarranted regulatory and compliance risks. The final rule’s definition of loan originator does not fully equate with the business model of the manufactured housing industry, including lending and retail sales practices. The division approved a motion to be presented to the MHI board to explore protection of retailer activities in the sale of a home under court rulings related to commercial speech.

Financial Services Division

During the meeting of MHI’s Financial Services Division, attendees received a briefing on several key mortgage finance rulemakings that were unveiled by the Consumer Financial Protection Bureau (CFPB) in January. Presenters provided detailed summaries and analysis of regulations governing appraisals for Higher-Priced Mortgage Loans (HPMLs), Qualified Mortgages (QMs), High-Cost Mortgage (HCM) guidelines, and Loan Originator Compensation. Copies of the presentations are available to MHI members at:

• Qualified Mortgage Rule Overview 

• High-Cost Mortgage Rules Analysis 

• Loan Originator Compensation Guidelines 

In light of recent CFPB rulemakings, the Financial Services Division adopted a formal measure recommending the MHI Board of Directors formally establish three key priorities for reform within Dodd-Frank that would guide the advocacy activities of MHI’s staff. The specific issue areas include:

• HOEPA High-Cost Mortgage Triggers: Final CFPB rules fail to provide the manufactured housing industry relief from the APR, or points and fees triggers outlined in the Dodd-Frank statute. The task force recommends MHI continue efforts begun in the 112th Congress to enact legislation amending HOEPA’s High Cost Mortgage triggers, and that additional outreach to the CFPB be conducted to seek regulatory relief.

• HPML Appraisal Requirements: Rules developed by the CFPB exempt loan transactions (both personal and real property) on new manufactured homes and mobile homes (pre-1976 and non-HUD Code homes) from these appraisal requirements. CFPB is in the process of developing a supplemental proposal to potentially exempt existing manufactured homes. The task force recommends MHI continue its work with regulatory agencies developing these rules to extend this exemption to transactions on existing manufactured homes.

• Loan Originator Compensation Exclusion for Manufactured Home Retailers: Legislation is needed to definitively exclude retailers from the CFPB definition of Loan Originator, as long as they are only compensated for the sale of the home, and neither the retailer nor their employees received compensation from a lending institution, broker or loan originator as part of the home sales transaction.

Click here to view the recommendation endorsed by the Financial Services Division.

Manufacturers Forum

Fred Hallahan, Hallahan Associates, reported on 2012 modular shipments. In 2012 the shipments for residential modular homes were 13,325, up 9.2 percent from 2011 shipments of 12,202. 

This 9.2 percent increase in modular shipments in 2012 compares to a 22.9 percent increase in conventional single family residential permits in 2012, demonstrating that modular home construction may be losing market share to the conventional single family housing market. 

Modular shipments through December 2012 represents five consecutive quarterly year-to-year increases in activity, following four consecutive quarters of year-to-year decreases from 2010 third quarter through 2011 third quarter. The current quarterly trend appears to be an indicator of forthcoming quarterly increases in modular activity. 

Conventional residential building permit activity in all states indicate that the precipitous annual decreases from 2005 peaks have ended and recent annual permit activity has changed from relatively constant levels in 2009 through 2011 to a growth-recovery level in 2012. All but five smaller states actually show an increase in annual permit activity for the past several years. According to Hallahan’s analysis of modular production trends:

• Most states will experience increases in single family residential permit activity in the next few years.

• Modular activity in most states will increase accordingly with increases in permit activity in the next few years; consistent with historical relationships between conventional permit activity and modular activity. 

• Based on 2012 modular activity, thirty one states are showing signs of sustainable or increased modular activity. Only five states have experienced recent growth in modular home volume, and are also growing in modular market share.

• Based on current information available relative to economic conditions, modular shipments for 2013 are projected to range from about 14,500 homes to 16,000 homes; a nine percent to 20 percent increase above 2012.

Click here for a copy of Fred Hallahans’s presentation.

Suppliers Division

The division received an update on the Suppliers Division Membership Recruitment Initiative. The members were provided with the background materials, list of current members, lists of potential supplier and manufacturer members and a sample letter to non-members that had been sent by e-mail to Suppliers Division and Manufactured Housing Division members to aid in their membership recruitment efforts. The division members were asked to review the non-member lists and choose at least one potential non-member to recruit. The division also discussed researching the development of a consumer oriented Web site. 

Members were encouraged to display the new "Proud Member of MHI" logo in marketing materials, websites, and on display in their business locations. Members can download the logos in various formats by clicking here. 

Government Relations Committee

During a meeting of the MHI’s government relations committee, MHI Vice President of Government Affairs Jason Boehlert provided an overview and update on the association’s key legislative and regulatory policies for the 113th Congress. 

Over the coming year, MHI will be working with Congress and the administration to:

• Provide industry members relief from provisions within Dodd-Frank that restrains credit available for the purchase of affordable manufactured housing.

• Require the Department of Energy (DOE) to collaborate with the Department of Housing and Urban Development (HUD) in developing energy efficiency standards for manufactured housing and utilize HUD to enforce and update any standards.

• Preserve and extend the New Energy Efficient Home Credit (I.R.C. 45L) for manufactured and modular housing, which is currently slated to expire at the end of calendar year 2013.

• Require that any new secondary mortgage finance mechanism developed by Congress and the administration as part of their efforts to reform Fannie Mae and Freddie Mac provide equal and open access to manufactured home loans, including those secured by personal property.

• Urge Representatives to show their support for manufactured housing by joining the Congressional Manufactured Housing Caucus.

Members can learn more about these issues by viewing the following MHI issue briefs:

• HOEPA Triggers 

• Loan Originator Compensation 

• DOE Energy Efficiency Standards 

• 45L 

• GSE Reform 

• Congressional Manufactured Housing Caucus 

For more information, contact MHI Vice President of Government Affairs Jason Boehlert at (703) 558-0660 or  This e-mail address is being protected from spambots. You need JavaScript enabled to view it . 

Manufactured Housing Institute-Political Action Committee

MHI-PAC Chair Rick Rand, Great Value Homes, introduced Gay Westbrook, recently hired by MHI, as the primary MHI staff responsible for obtaining contributions and identifying other fundraising efforts for MHI’s PAC and Administrative Fund. In addition, Gay will work closely with the state associations to reach out to key members of Congress in advancing MHI’s advocacy efforts.

The agenda for the meeting focused on a review of the 2012 financial statements for both the PAC and the Administrative Funds. In addition, the 2013 budget for both the PAC and Administrative Fund were presented for the Board’s approval. Chairman Rand noted that this was the first time a budget has been prepared for these funds. Finally, the Board briefly reviewed the 2014 Election Cycle Budget denoting planned campaign contributions by candidate noting that this document will change during the election cycle as a result of changes to Congressmen’s assignments and interest and willingness to support the manufactured housing industry. The Board will receive updates to the schedule on a quarterly basis with conference calls to discuss as necessary.

The meeting concluded with the unanimous approval to add Mr. D.J. Pendleton, Executive Director of the Texas Manufactured Housing Association, to the MHI-PAC Board of Trustees.

Manufactured Housing Educational Institute Board of Directors

The Manufactured Housing Educational Institute (MHEI) board of directors met Sunday evening, February 24th and reviewed the educational offerings for the 2013 Congress & Expo for Manufactured and Modular Housing. The Board also discussed the changes MHEI is making to its online training system. Courses are being moved to a new Web site which will require adjusted course pricing to pay for the use of the system. MHEI’s online system is now located at www.mhei.myicourse.com. 

Lastly, the Board members reviewed the MHEI/MHI published document, "Play it Safe" and discussed having the document reviewed for updating and posting as a PDF on MHI’s Web site.

MHI thanks the following sponsor for their generous support of this event.

Gold Sponsors

CIS Home Loans 
Hometown America 
Triad Financial Services, Inc. 

Silver Sponsors

Assurant Specialty Property 
McGlinchey Stafford PLLC 
RADCO 
Style Crest, Inc. 
TRA Certification, Inc. 
U.S. Bank

House Passes Continuing Resolution to Avoid Government Shutdown, Sequestration Still in Effect

The House voted Wednesday, March 6th to pass a continuing resolution and fund the federal government through the end of the fiscal year (September 30th), making a shutdown later this month doubtful. The continuing resolution (CR), is subject to sequestration levels, setting the overall rate of spending at $982 billion, down from $1.043 trillion the previous fiscal year.

Sequestration is a series of automatic, across-the-board cuts to government agencies in an attempt to control the growth of U.S. national debt, which has exploded since the 2007 recession. Total U.S. national debt currently stands around $16 trillion. The sequestration cuts will total about $1.2 trillion over 10 years. The sequester has been coming for more than a year, and Congress pushed it back to March 1st as part of the fiscal cliff deal which passed at end of the last session.

The vote on the CR passed with a vote of 267 to 151, supported mainly by Republicans. Fourteen Republicans and 151 Democrats opposed the bill.

"Today, the House has taken the first step towards assuring the American people that the federal government will stay open, which President Obama agrees should be our shared goal," House Speaker John Boehner, R-OH, said after the vote. "This legislation is straightforward and reasonable, protecting national defense and helping our veterans while maintaining the president's sequester, which Republicans continue to support replacing because there are better ways to cut spending."

"This CR does nothing to address the irrational cuts to defense and non-defense that the sequester will require. It could be very harmful to our economy and to our national security and place the most vulnerable in America at great risk," said House Minority Whip Steny Hoyer, D-MD. "I want to vote for appropriations bills that enable us to limit the negative impact of sequestration on our defense community and the most vulnerable in our society, but this CR does not do that. This vote will do nothing to lessen the effects of the sequester."

Now the Senate must pass or amend the CR before March 27th, when the current funding runs out, in order to avoid a government shutdown. 

Overall, sequestration cuts will equal about five percent of FY 2013 non-defense discretionary spending. Sequestration is expected to have a minimal impact on FHA and other federally backed mortgage finance programs (as the loan authority funding is not impacted by the sequester), but processing may slow to a crawl, as federal workers are laid-off or furloughed. U.S. Secretary of Housing and Urban Development Shaun Donovan told a Senate panel last week that for this reason the sequester will be "deeply destructive" to the housing market. 

Federal Housing Finance Agency Says Fannie Mae & Freddie Mac Will Build a New, Joint Securitization Platform to Shrink Government’s Role in the Mortgage Market

Government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac will build a new joint company for securitizing home loans as a stepping stone toward shrinking the government's role in the mortgage market, said Edward DeMarco, acting director of the Federal Housing Finance Agency (FHFA). On March 4th, DeMarco told the National Association for Business Economics that "the overarching goal is to create something of value that could either be sold or used by policymakers as a foundational element of the mortgage market of the future.” 

Fannie Mae and Freddie Mac were bailed out by the government in 2008, and together help finance about two-thirds of all new U.S. home loans. DeMarco is seeking to shrink their footprint, as well as reduce risks to the taxpayers that currently support the mortgage giants. Since they were seized by the government, Fannie Mae and Freddie Mac have drawn nearly $190 billion from the U.S. Treasury to stay afloat. 

By creating a new securitization company, FHFA intends to pave the way for a single securitization platform and force the two enterprises to abandon their separate systems - shrinking the role they play in the overall housing system in the absence of legislation from Congress or direction from the Obama administration on their future. The new company will be structured as a joint venture that is owned by both Fannie Mae and Freddie Mac shareholders. 

DeMarco said the new venture is not expected to begin securitizing loans next year. Instead, the focus will be to create the business and hire staff. The company will have a separate chief executive and board. Congress will ultimately have the authority to decide how the securitization platform is operated and whether it should be privatized. 

Republicans and Democrats agree that Fannie Mae and Freddie Mac should eventually be wound down, but they have yet to find common ground on how to replace them.

HUD Announces Appointments to the Manufactured Housing Consensus Committee

On January 28th HUD announced new appointments to the Manufactured Housing Consensus Committee (MHCC). The MHCC is a 22 member Federal Advisory Committee that includes seven voting members in each of three categories. The three categories are Producers; Users; and General Interest and Public Officials. In the producer category, MHI member Manuel Santana, P.E., Cavco Industries, Inc. and Gregory Scott, ScotBilt Homes, Inc. were reappointed for a second two-year term. Dominic C. Frisina, of RoMar Homes, Inc., a retailer from Pennsylvania, was selected for a one-year appointment to fill a vacancy left by the departure of Bill Stamer from Champion Home Builders, Inc. 

In the User Category, Michael Lubliner, Washington State University, was reappointed to a third two-year term. Timothy O’Leary with the Idaho Office of Energy Resources was appointed as a new member in the User category. A new member, Debra Blake, with the State of Arizona’s Office of Manufactured Housing, was appointed to serve a two-year term from the General Interest-Public category. 

MHI members Leo Poggione, Craftsman Homes; Michael Wade, Southern Energy Homes; and Theresa Desfosses, a community owner and former manufacturer, with State Manufactured Homes, Inc., continue to serve on the MHCC with terms that expire December 2013, and December 2014. 

According to HUD, two face-to-face meetings are planned for the MHCC in 2013, one in the spring, and one in the fall. A spring meeting has not yet been scheduled.

Click here for a complete list of the members of the MHCC.