As you are already aware, the House of Representatives Subcommittee on Insurance, Housing and Community Opportunity held an oversight hearing on February 1, 2012 specifically focusing on HUD’s implementation of the Manufactured Housing Improvement Act of 2000. The hearing, which has been a key objective of MHARR’s intensive engagement with Congress for more than a year (together with budgetary oversight and accountability achieved during 2011), provided the Association with an opportunity to present detailed written and verbal testimony on HUD’s failure to fully and properly implement the 2000 law -- and its extremely damaging impact on the industry and consumers -- directly to the members of Congress who are responsible for oversight of the program and the law itself. This led to sharp questioning of HUD’s witness by subcommittee members on a variety of matters, including the program’s failure to act on MHCC standards recommendations, its re-codification of installation outside of the construction and safety standards, its treatment of the MHCC and the impact of all these issues on the availability of consumer financing -- and this is just the first step for MHARR.

To begin with, it is clear that there will be follow-up by Congress on these matters as: (1) HUD was directed to provide the subcommittee with specific additional written information on the status of MHCC recommendations; (2) the subcommittee noted the pending investigation by the Government Accountability Office (GAO) on the implementation of the 2000 law; and (3) a key subcommittee member voiced a need for additional hearings to focus on regulatory issues. Needless to say, MHARR will be fully involved in all three of these areas (and has already met with the GAO investigation team) to be certain that they stay focused, on target, and are not sidetracked.

Conversely, the only setback at the hearing, as has been the case before (and is becoming even more of a problem in Washington, D.C.), is that post-production issues raised by the one consumer witness could not be authoritatively addressed or refuted because there was no post-production sector witness at the hearing to respond and maintain a clear and factual record. As MHARR’s effort to promote an industry recovery in Washington, D.C. – by hammering the link between HUD’s failure to fully and properly implement the 2000 law, leaving manufactured homes in the status of “trailers” – and major post-production issues such as financing, installation, placement and others gains more traction and more positive results, this absence of a strong, independent voice for the post-production sector becomes an ever greater handicap for the industry.

Set out below, therefore, for your review and information, are copies of the verbal hearing testimony of MHARR’s two witnesses, MHARR Chairman, John Bostick and MHARR Immediate-Past Chairman, Edward Hussey. Yesterday, we provided you with a copy of MHARR’s comprehensive written testimony detailing HUD’s failure to fully and properly implement key reforms of the 2000 law (without attachments, due to their volume – in excess of 260 pages, including copies of the Majority and Minority Reports of the National Commission on Manufactured Housing). The MHARR written testimony and supporting attachments will be discussed in greater detail (including their use as a base document for other non-legislative approaches) at the Association’s upcoming meeting in Tunica, Mississippi, this coming March.

cc: MHARR State Affiliates

Manufactured Housing Association for Regulatory Reform

1331 Pennsylvania Ave N.W., Suite 508

Washington, D.C. 20004

Phone: 202/783-4087

Fax: 202/783-4075

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(Image Credit: RV/MH Hall of Fame)

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Verbal Testimony of John Bostick, Chairman

Manufactured Housing Association for Regulatory Reform

Before the House of Representatives’ Subcommittee on Insurance, Housing and Community Opportunity Hearing on the Implementation of the Manufactured Housing Improvement Act of 2000

Washington, D.C., February 1, 2012

Good morning, my name is John G. Bostick. I am appearing today in my capacity as Chairman of the Manufactured Housing Association for Regulatory Reform (MHARR). I am also President of Sunshine Homes, Inc., headquartered in Red Bay, Alabama.

Sunshine Homes is a producer of manufactured homes built in accordance with federal construction and safety standards enforced by the U.S. Department of Housing and Urban Development (HUD). MHARR is a national trade association, founded in 1985 and based here in Washington, D.C., which represents the views and interests of mostly smaller, independent producers of federally-regulated manufactured housing, including Sunshine Homes. Also with me here to testify today is my colleague, Edward J. Hussey, my predecessor as Chairman of MHARR, who was chosen by Congress to serve on the National Commission on Manufactured Housing and has been involved in congressional efforts to reform the HUD manufactured housing program over the course of three decades.

Sunshine Homes is proud to be a producer of manufactured homes. Manufactured homes, at an average purchase price (without land) of $62,800, are the nation’s most affordable source of home ownership, available to almost every American. We are a non-subsidized industry, which means no financial burden is placed on American taxpayers.

Historically, manufactured homes have accounted for more than 20% of the new single-family homes sold in the United States. As recently as 1998, more than 370,000 manufactured homes were produced and sold in a single year. Since then, however, the industry has experienced a decline that is unprecedented in its severity and its length, that has seen production and sales decline by nearly 90%. Thus in both 2010 and 2011, total industry production was barely 50,000 homes.

While manufactured housing, like other segments of the housing industry, has been affected by the 2008 financial crisis and subsequent recession, the steep decline of our industry began long before either of those developments and has been much more severe than the downturn in the broader housing market. These facts point to the existence of other factors, unique to the manufactured housing industry, that have worked to unduly suppress the manufactured housing market, to the detriment of millions of American consumers of affordable housing.

Boiled-down to its essence, the decade-plus decline of the industry is a result of entrenched discrimination against both the product and the market segment that it primarily serves – discrimination that has festered and grown in recent years – due to intentional policy decisions by federal regulators and as an unintended consequence of other decisions within the federal sphere.

This discrimination, which affects everything from the regulation of manufactured homes in the factory, to consumer financing of manufactured home purchases, to the placement of manufactured homes within communities, was supposed to have been a thing of the past by now. More than a decade ago, Congress enacted the Manufactured Housing Improvement Act of 2000. That landmark law, which amended the original National Manufactured Housing Construction and Safety Standards Act of 1974, was designed -- based on 12 years of congressional study and the findings of a National Commission on Manufactured Housing – to complete the transition of manufactured homes from the “trailers” of yesteryear to legitimate “housing” at full parity with other types of homes. Congress, in that law, not only acknowledged the importance of the affordability of manufactured homes -- making the maintenance of that affordability an express purpose of the Act -- but also enacted specific reforms to the HUD manufactured housing program designed to end past abuses and transform the program into a housing program that would ensure the equal treatment and role of manufactured housing for all purposes within HUD and elsewhere.

The reality, though, as the industry statistics suggest, has been much different. As is thoroughly detailed in MHARR’s comprehensive written testimony, HUD has failed to fully and properly implement the vast majority of the key program reforms that Congress deemed necessary in the 2000 law.

Whether it is HUD’s failure to appoint a non-career administrator for the program to ensure its visibility within HUD and the equal participation of manufactured housing in all relevant HUD programs, or its efforts to undermine the role and authority of the Manufactured Housing Consensus Committee, the centerpiece reform of the 2000 law, HUD has resisted or ignored most of the key program reforms that Congress wisely enshrined in the 2000 law.

The result has been continuing and worsening discrimination against manufactured housing based on the ongoing “trailer” orientation of the HUD program. In the regulatory arena, HUD continues to view manufactured housing as a deficient product, in need of constant “improvement” through increasingly more complex and costly regulatory practices implemented outside of the MHCC consensus process with no showing of need or benefit to consumers. In the financing arena, HUD’s own Federal Housing Administration (FHA) Title I program for government-insured manufactured housing personal property loans, which averaged approximately 20,000 manufactured housing loan endorsements per year between 1980 and 1993 has, since 1996, plummeted to approximately 1,000 endorsements per year, based partly on a Government National Mortgage Association (GNMA) moratorium on the securitization of Title I manufactured home loans and, more recently, discriminatory securitization criteria that have excluded most lenders from the market and have allowed the FHA Title I market to be effectively dominated by one or two large companies. Similarly, in the private financing sector, manufactured home loans, in recent years, have constituted less than 1% of the business of the Government Sponsored Enterprises (GSEs) even though manufactured housing accounts for more than 20% of all the new single-family homes sold since 1989.

As is shown by MHARR’s written testimony, these examples are just the tip of the iceberg in illustrating the many ways that continuing and worsening discrimination against manufactured housing -- stemming from HUD’s institutional resistance to the reforms of the 2000 law -- are hurting the industry and the millions of consumers who want to buy and own a home of their own that they can truly afford. This is waste in its worst form – waste of an outstanding, well-conceived federal law, waste of a federal program that could help the private sector meet the growing need for affordable housing, and waste of a product and an industry that simply needs an even playing field in order to meet that demand and grow stronger, providing thousands more jobs across the heartland of America in the process.

After 12 years, Congress needs to send HUD a clear and unmistakable message that the 2000 law means what it says and that HUD must change course and implement that law in accordance with its express terms and its full intent and purpose. The 2000 law is not in need of change, it is HUD’s implementation of that law which has to change.

Chairperson Biggert and Ranking Member Gutierrez, I thank you for holding this hearing and for the opportunity to appear here today and address the subcommittee. MHARR has already submitted comprehensive and detailed written testimony addressing all of these issues, which we would appreciate being included in the record of this hearing. We also look forward to answering any questions that you or your colleagues may have.

Thank you.

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Verbal Testimony of Edward J. Hussey, Past-Chairman

Manufactured Housing Association for Regulatory Reform

Before the House of Representatives’ Subcommittee on Insurance, Housing and Community Opportunity Hearing on the Implementation of the Manufactured Housing Improvement Act of 2000

Washington, D.C., February 1, 2012

Good morning, my name is Edward J. Hussey. I am appearing today in my capacity as Immediate-Past Chairman of the Manufactured Housing Association for Regulatory Reform (MHARR). I am also Vice President of Liberty Homes, Inc., headquartered in Goshen, Indiana, a manufactured and modular home builder.

Over the course of more than fifty years, I have been involved in nearly every aspect of the production and marketing of manufactured homes and the federal regulation of manufactured home construction and safety. I have had the privilege of testifying before Congress previously about the benefits and advantages that manufactured homes provide to families seeking the American Dream, and I was honored to serve as a House of Representatives appointee to the National Commission on Manufactured Housing (1993-1994) which developed the conceptual blueprint for reforms to the federal manufactured housing program at the U.S. Department of Housing and Urban Development (HUD) that were ultimately enacted by Congress as part of the Manufactured Housing Improvement Act of 2000 (2000 law).

The enactment of the 2000 law was a major watershed event for the manufactured housing industry. From humble origins nearly 80 years ago as a type of quasi-vehicle, “mobile homes,” in the 1960s and 1970s, experienced a period of rapid growth and evolution that pointed to the need for federal regulation to assure quality and protect homeowners, while ensuring their affordability and acceptance nationwide. As a result, Congress adopted the National Manufactured Housing Construction and Safety Standards Act of 1974, which established the current HUD regulatory program based on three inter-related principles – (1) uniform, performance-based federal construction and safety standards to allow innovation and take advantage of the efficiencies of factory-based construction; (2) robust federal preemption to avoid a multitude of non-conforming state and local standards that would unnecessarily increase costs; and (3) uniform federally-based enforcement of the standards.

While the original 1974 law fostered major technological advancements that saw the “trailers” of the post-World War II era become legitimate “housing” that, in almost all instances, remained at the original home-site once installed, the HUD program established by that law was effectively a program for “trailers,” complete with recall provisions. As the industry progressed, it became evident by the 1990s that both the federal manufactured housing law and the federal program needed to change in order to keep pace with the industry, allow manufactured housing to reach its full potential and remedy HUD program deficiencies that had become evident since the inception of federal regulation in 1976.

Following 12 years of study and analysis, including the recommendations of the National Commission and the submission of its majority and minority reports, Congress enacted the 2000 law, making what were supposed to be major changes to the HUD manufactured housing program. Those changes were designed, in part, to ensure the continuing affordability of manufactured housing and, more importantly, to complete the final transition of manufactured homes from the “trailers” of yesteryear to legitimate “housing” at parity with all other types of homes.

Among the centerpiece reforms of the 2000 law were – (1) the creation of a strong, independent consensus committee – similar to those used to develop every other American building code – to consider new and revised standards, enforcement regulations, interpretations and changes to enforcement policies and practices; and (2) an appointed, non-career administrator for the HUD program to finally bring manufactured housing into the mainstream of HUD programs, policies and initiatives, after decades of neglect and second-class status (at best) at the Department.

Unfortunately, it has not worked out the way that Congress intended. Instead of fully implementing the 2000 law as Congress and the National Commission intended, HUD has done everything in its power to maintain the old status quo and either ignore or materially alter the changes that Congress sought to bring about. The result is that manufactured housing, as far as HUD and other governmental and quasi-governmental agencies are concerned, stands essentially where it did when Congress convened the National Commission in 1993 – a semi-vehicular “trailer” in need of “improvement” through constantly expanding regulation and enforcement. This outdated and indefensible orientation has had a domino effect on the entire industry and its consumers, subjecting both to ever-worsening discrimination that, among other things, has virtually eliminated public and private consumer financing for manufactured home purchases and has negatively impacted the placement and acceptance of manufactured housing.

Thus, instead of advancing the acceptance, use and availability of manufactured housing as the nation’s leading source of inherently affordable home ownership -- as Congress intended -- HUD regulators, for the past 12 years, have devoted their energies to nurturing their own regulatory fiefdom, circumventing and negating the 2000 law, while unnecessarily expanding regulation and unnecessarily increasing the cost of manufactured housing to the public. The end result has been that despite a unique industry model providing affordability combined with quality within the economic reach of nearly every American, the manufactured housing industry, over the past decade, has declined dramatically.

As is detailed in our MHARR written testimony, manufactured housing production, since the enactment of the 2000 law, has declined by more than 86% (from 373,143 homes in 1998 to 50,046 in 2010 and 50,000 +/- in 2011). Over the same period, nearly 75% of the industry’s production facilities have closed (from 430 to fewer than 110), as have more than 7,500 retail centers. This represents a devastating loss of affordable housing opportunities for lower and moderate-income American families, while tens, if not hundreds of thousands of jobs throughout the manufactured housing industry have simply disappeared. And this has occurred, in no small part, due to HUD’s refusal to embrace manufactured housing and the clear directives that Congress set out in the 2000 law.

Manufactured housing can and should be a private sector solution (in conjunction with other programs) to meeting the housing needs of Americans on all rungs of the economic ladder without the need for subsidies that needlessly burden taxpayers and increase the federal deficit and federal debt. Manufactured housing can fulfill this role and provide the American Dream for millions of families that would otherwise be excluded from homeownership, but to do so, it must be treated as legitimate “housing” for all purposes by its federal regulator and not fodder for discrimination that hits hardest at the lower and moderate-income families which rely on the quality and affordability of their manufactured homes. The way to accomplish this transition, as Congress correctly concluded 12 years ago, is for HUD to fully and properly implement all the reforms of the 2000 law.

Just to be clear, there is nothing wrong with the 2000 law. It does not need to be altered or amended. The issue is its implementation by HUD. As Mr. Bostick just indicated, Congress needs to send HUD a clear and unmistakable message that the 2000 law means what it says and that HUD must change course and implement that law in accordance with its express terms and its full intent and purpose.

Chairperson Biggert and Ranking Member Gutierrez, we thank you for holding this hearing and for the opportunity to address the subcommittee. We also look forward to answering any questions that you or your colleagues may have.

Thank you.

Manufactured Housing Finance Relief Legislation Unveiled

MHI Praises Efforts to Preserve Financing for the Purchase of Affordable Manufactured Housing

(Arlington, VA – February 1, 2012) - During a hearing of the Financial Services Subcommittee on Insurance, Housing and Community Opportunity evaluating the effectiveness to which the Department of Housing and Urban Development (HUD) has implemented key provisions of the Manufactured Housing Improvement Act of 2000, Rep. Gary Miller (R-CA) formally unveiled legislation (H.R. 3849) to reduce regulatory burdens impeding access to affordable manufactured housing financing.

In detailing challenges facing the manufactured housing industry, Congressman Miller cited a number of difficulties the industry has suffered over the past decade, including: a decline in new manufactured home construction of roughly 80 percent; the closure of more than 160 plants; and the loss of over 200,000 jobs. He specified that “Congress must address the problems with regulatory overreach that impedes the ability of consumers to obtain mortgage financing for manufactured homes.”

The bill (titled the Preserving Access to Manufactured Housing Act) was developed on a bipartisan basis by Reps. Joe Donnelly (D-IN), Stephen Fincher (R-TN) and Gary Miller, in consultation with the Manufactured Housing Institute (MHI), to address two significant issues impacting the manufactured housing industry:

• Reducing the threshold by which small balance manufactured home personal property loans are considered High-Cost Mortgage Loans under provisions within the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203) and thereby subject to punitive and onerous liabilities.

• Clarifying that those selling manufactured homes—who are not fundamentally engaged in the business of mortgage origination —are not to be considered mortgage originators under the federal SAFE Act and thereby better able to provide adequate technical assistance to consumers throughout the manufactured home buying process—similar to the SAFE Act treatment of real estate brokers.

Upon introduction of the legislation, MHI Chairman and Cavco Industries Chairman and CEO Joe Stegmayer stated “we are truly grateful for the dedicated leadership and work of Representatives Joe Donnelly, Stephen Fincher and Gary Miller on this very important issue. Serving the financing needs of the manufactured housing market has always been a unique challenge. It has grown more challenging by the establishment of new federal guidelines that do not adequately account for the complexities and realities facing the industry and consumers alike. The legislation is an essential step in preserving the affordability advantage of manufactured housing and protecting the equity that 19 million existing manufactured home residents have built in their homes.”

During the hearing, several members of the subcommittee reaffirmed the important role manufactured housing plays as an affordable, high quality housing source and the need for improved access to financing, including Rep. Robert Hurt (R-VA) who stated that the manufactured housing industry has been “hindered by a lack of financing availability.” Rep. Sean Duffy (R-WI) highlighted the valuable role manufactured housing plays as an “important source of affordable housing” that is “threatened by a lack of financing options.”

In his testimony, Cavco Industries Director of Engineering Manuel Santana, P.E. - testifying on behalf of MHI - reinforced these points and stated that “the single most important issue impacting the manufactured housing market remains the availability of accessible and affordable financing for those seeking to purchase manufactured housing.” Mr. Santana added that “lack of a viable secondary market for manufactured home loans coupled with growing regulatory burdens threaten to further constrict the limited financing options that currently exist within the manufactured housing market.”

MHI will continue to work on a bipartisan basis to educate Members of Congress and develop solutions to the financing crisis within the manufactured housing market. For a copy of the legislation, visit http://thomas.loc.gov/cgi-bin/t2GPO/http://www.gpo.gov/fdsys/pkg/BILLS-112hr3849ih/pdf/BILLS-112hr3849ih.pdf. A description of the bill’s impact on SAFE Act and the Dodd-Frank Act is available at http://www.manufacturedhousing.org/webdocs/qandaManufhomeslegs.pdf.

MHI is the preeminent national trade association for the manufactured and modular housing industries, representing all segments of the industry before Congress and the Federal government. From its Washington, D.C. area headquarters, MHI actively works to promote fair laws and regulation that will help provide quality, affordable housing for homebuyers. For more information on MHI, visit www.manufacturedhousing.org.

Washington, D.C., February 1, 2012 – A House of Representatives subcommittee, reacting to a nearly 90% decline in manufactured housing production over the past decade, questioned officials of the Department of Housing and Urban Development (HUD) at a February 1, 2012 hearing on the Department’s failure to fully and properly implement the Manufactured Housing Improvement Act of 2000, a law designed to increase the availability of manufactured homes and ensure their status as “housing” on an equal footing with all other types of homes. Hearing testimony addressing HUD interpretations of the 2000 law that have paved the way for worsening discrimination in manufactured housing regulation, financing, placement and other issues leading, in turn, to the worst decline in industry history, was provided by the current Chairman of the Manufactured Housing Association for Regulatory Reform (MHARR), John Bostick, and Immediate-Past MHARR Chairman, Edward Hussey.

Other hearing witnesses included Dana Roberts, former Chairman (2002-2008) of the Manufactured Housing Consensus Committee (MHCC) established by the 2000 law, HUD program manager Henry Czauski and MHCC members Ishbel Dickens and Manuel Santana.

This oversight hearing, focused on HUD’s failure to fully and properly implement major reforms to the federal manufactured housing program enacted by the 2000 law -- and the negative impacts of that failure on the manufactured housing industry and consumers -- follows a more general hearing by the same subcommittee on November 29, 2011 regarding the state of the manufactured housing industry and a joint request by Housing Subcommittee Chairperson Judy Biggert (R-IL) and House Financial Services Committee (FSC) Chairman Spencer Bachus (R-IL) for a Government Accountability Office (GAO) probe of specific aspects of the HUD program, including the Department’s implementation of the 2000 law.

Thorough and effective congressional oversight of the HUD program and its impact on the industry, potential homebuyers and consumer financing has been, and remains, the centerpiece of MHARR’s intensive engagement with Congress since the elections of November 2010.

In comprehensive written testimony supported by extensive documentation, as well as verbal presentations to the subcommittee, MHARR’s witnesses emphasized that the overriding objective of the 2000 law – to change the program culture at HUD and ensure the equality of manufactured homes as “housing” – has not been met and, in fact, has been undermined by institutional resistance from regulators over the course of multiple administrations, with disastrous consequences for the industry and American consumers of affordable housing. (Copy of MHARR’s written testimony - without attachments - is attached).

As a result, more than a decade after the enactment of the 2000 law, nothing has changed in the way that the HUD program views and treats manufactured homes. Instead, the program remains mired in the same outdated culture, regulatory model and perspective that prevailed 35 years ago at the inception of federal regulation – even though manufactured housing, as recognized by Congress in the 2000 law, long ago evolved far beyond the mobile “trailers” that the program first regulated in the mid-1970s. This has led, over the past decade, to an industry decline that has cost nearly 200,000 jobs in manufactured housing production, retailing, communities and related industries, the virtual elimination of public and private manufactured home consumer financing and, with that, the elimination of affordable home ownership opportunities for millions of American consumers – especially lower and moderate-income families.

While, as in the past, consumer concerns expressed at the hearing centered largely on post-production matters, the witness panel did not include a representative of the post-production sector.

In his testimony, Dana Roberts, the first and longest-serving MHCC Chairman, stressed that the “number one problem facing the [manufactured housing] industry today is HUD’s administration and interpretation of the 2000 Act.” He emphasized that HUD’s misinterpretation of the 2000 law, legally separating installation standards and regulations from construction standards and regulations (i.e., re-codification) – contrary to the 2000 law and the express recommendations of the National Commission on Manufactured Housing -- has led to numerous other HUD misinterpretations of the 2000 law that “deviate” from its intent and purposes. These include, but are not limited to, HUD’s emasculation of the role and authority of the MHCC, including stripping it of authority to develop and recommend changes to the federal installation standards, even though the 2000 law directed the MHCC to write – and it did write -- those standards in the first place.

In Washington, D.C., MHARR Chairman, John Bostick, stated: “We thank Chairman Bachus and Chairperson Biggert for holding this oversight hearing and for embracing the issue of HUD’s compliance with the 2000 law. We now await the results of the GAO investigation and still further work with Congress to ensure that the 2000 law is implemented in accordance with its express terms and Congress’ full intent. Congress deserves great credit for crafting the 2000 law, which is remarkably comprehensive and forward-looking. The 2000 law simply needs to be correctly implemented by HUD.” Similarly, Immediate-Past MHARR Chairman, Edward Hussey, stated: “Although manufactured housing has changed dramatically over the past 35 years, from pseudo-“trailers” to full-fledged housing, the regulatory model and program culture of the HUD manufactured housing program remains frozen in the 1970s. This is ironic, given the fact that today’s high-quality, affordable manufactured homes should be the centerpiece of HUD programs to foster and promote affordable non-subsidized housing for Americans at all income levels. Congress passed the 2000 law to jumpstart needed reforms to the HUD program, but regulators have only become more entrenched.”

In separate remarks following the subcommittee hearing, former MHCC Chairman Dana Roberts stated: “HUD has not interpreted the 2000 law as Congress intended, by declaring major portions of the work to build a house as not part of the home’s construction, even though the law defines ‘construction’ as ‘all activities relating to assembly and manufacturing’ [i.e., re-codification]. This has allowed HUD to distort the meaning and intent of the law in ways that severely limit the role and independence of its centerpiece reform, the MHCC, ultimately hurting both the industry and consumers. Hopefully, strong congressional intervention and direction to HUD to change their interpretations of the 2000 law will cause HUD to change the program and implement the law as Congress intended.”

The Manufactured Housing Association for Regulatory Reform is a Washington, D.C.-based national trade association representing the views and interests of producers of federally-regulated manufactured housing.

MHARR's 2-1-2012 congressional hearing news release

MHARR's 2-1-2012 written congressional testimony

MHI Members Urged to Contact District Congressional Offices – Energy Efficiency Home Tax Credit Expired on December 31, 2011

The federal tax credit for manufacturers who build energy efficient homes (Section 45L) expired on December 31, 2011. After extending the Social Security payroll tax cut, unemployment benefits and Medicare payments to physicians, Congress adjourned for the holiday recess. A host of important temporary tax incentives, frequently called “tax extenders” — including the New Energy Efficient Tax credit for manufactured and modular homes was not included in the year-end tax deal. Specifically, manufacturers who build ENERGY STAR homes were eligible to receive a $1,000 tax credit and modular home builders were eligible to receive a $2,000 tax credit by exceeding the International Energy Conservation Code (IECC) by 50 percent.

MHI, along with its broad-based coalition of energy efficiency and environmental organizations, housing associations, public interest groups and corporations sent letters to Members of Congress urging them to extend the New Home Energy Efficient Tax Credit. Stimulating the economy will be high on the priority list for Congress. Senate Finance Committee Chairman Max Baucus (D-MT) vowed to continue working in January to extend tax cuts for individuals and small businesses. Baucus has been quietly working with his colleagues and fighting to find a bipartisan path forward for these tax extenders, including the research and development tax credit and job-creating clean energy tax incentives.

The House of Representatives returns to Washington, D.C. on Tuesday, January 17th while the Senate reconvenes on Monday, January 23rd. Upon the return of our elected officials, MHI would like to be well-positioned to advocate for the passage of the extension of the ENERGY STAR tax credit for manufactured and modular homes.

MHI members are encouraged to call their representative’s district office. Contact information for congressional offices is available by clicking here. Click here for the issue paper.MHI members can contact Rae Ann Bevington at 703-558-0675 or  This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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President Supersedes Congress with CFPB Recess Appointment, Poised to Regulate Non-Bank Financial Institutions Immediately

On January 4th, in what many predict will be a constitutional test of the President’s authority, the White House bypassed Senate objections and appointed Richard Cordray as Director of the Consumer Financial Protection Bureau (CFPB).

The recess appointment sparked an immediate backlash among Senate Republicans who had previously been successful in preventing the nomination from reaching the Senate floor for an up-or-down vote.

The Senate has technically remained in session, on a pro-forma basis, due to the unwillingness of House Republican leaders to approve a procedural motion that would allow the Senate to formally go on recess for periods in excess of three days. House Republicans had used this tactic in an attempt to prevent the White House from making a recess appointment. Under the constitution, each chamber needs the other’s permission to go on recess. It is expected that the legality of the appointment will be tested in court.

The recess appointment is significant. The designation of an official director allows the agency to assume full authority to regulate non-bank lenders, which the CFPB defines as a company that provides consumer financial products or services but lacks a bank, thrift or credit union charter.

The CFPB has indicated that it will adopt an approach to examining non-bank institutions similar to the one it uses for bank examinations. In October, the CFPB released its field guide that examiners will use for its examinations. Click here to view the guide.

In moving forward to implement this program, the CFPB has indicated it will:• Expand its ongoing supervision of mortgage servicers to nonbank mortgage servicers

• Publish additional examination procedures tailored to the types of consumer financial products and services offered by nonbanks
• Propose an initial rule to begin defining who meets the test for “larger participants” in certain nonbank markets
• Publish rules to establish procedures to supervise a nonbank company where the CFPB has reasonable cause to believe it poses risks to consumers
• Continue ongoing communications with state and federal regulators with a more specific focus on examination planning
• Continue to obtain feedback on its supervision program from nonbank financial services companies, banks, thrifts, and credit unions, federal and state agencies, consumer and community groups, and the public.

Payday lenders, private education lenders and non-bank mortgage servicers have been part of a class of financial institutions characterized as the “shadow banking industry,” which has been criticized by consumer advocates for their predatory practices resulting from the lack of oversight at the federal level. Non-bank manufactured home lenders could potentially be included in this class of institutions and potentially subject to the examination of the CFPB.

For more information on the CFPB’s plan, click here.

MHI members can contact Jason Boehlert at 703-558-0660 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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CFPB Releases Several Requests for Comments

Prior to the holidays, the Consumer Financial Protection Bureau (CFPB) unveiled a number of requests seeking comments on rules. The Dodd-Frank Act transferred rulemaking authority for a number of consumer financial protection laws from seven federal agencies to the CFPB as of July 21, 2011. The agency is in the process of republishing the regulations and implementing those laws with technical and conforming changes to reflect the transfer of authority. Click here to view.

Of particular concern to MHI members, is a request for comments seeking input on the streamlining of existing regulations. Click here to view the request. MHI is in the process of developing comments for submission, which the agency must receive by March 5, 2012.

Since the Dodd-Frank Act passed in July 2010, 21 percent of the act’s 400 rulemaking requirements have been finalized, but 74.5 percent of rulemaking deadlines have been missed to date. This is according to data compiled by the Davis Polk & Wardwell Dodd-Frank Regulatory Tracker. To view click here.

MHI members can contact Jason Boehlert at 703-558-0660 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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DOE Seeks Comments on Enforcement of Energy Efficiency Standards for Residential Furnaces, Air Conditioners and Heat Pumps

On December 16th, MHI staff and several supplier members participated in a Department of Energy (DOE) public meeting on three possible approaches to enforcement of regional standards to residential furnaces, central air conditioners and heat pumps. DOE plans to propose rulemaking to establish an enforcement framework for compliance with the new energy efficiency standards for these appliances.

Effective May 1, 2013, all non-weatherized furnaces must meet new regional energy efficiency standards. Weatherized furnaces, central air conditioners, and heat pumps must meet new regional standards by January 1, 2015.

The enforcement and compliance options under consideration will impact appliance manufacturers and distributors of these appliances including manufactured and modular homebuilders, retailers, and contractors who install them on site. Depending on the enforcement option ultimately adopted, appliance manufacturers would be required to certify product efficiencies, inform distributors about appropriate regions, and track shipments to distributors. Distributors would be required to inform installers about appropriate regions, track unit sales to contractors, and collect information from contractors. Contractors would be required to install units in the appropriate region, maintain records and paperwork about installation location, and provide information to appliance distributors.

The majority of meeting participants expressed concern about the increased costs and paperwork and recordkeeping required to comply with the new standards, particularly for small distributors and contractors. Given the current distribution market for heating and cooling equipment and the prevalence of internet purchases, several participants said it would be virtually impossible to enforce compliance with regional energy standards without sophisticated and costly software and database systems.

MHI plans to comment on DOE’s proposed enforcement framework and will solicit input from suppliers manufacturers and retailers. Click here to view a copy of the enforcement framework.

MHI members can contact Lois Starkey at 703-558-0654 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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MHI-PAC Thanks Industry Members for a Great Year

Thanks to all 2011 MHI-PAC contributors who have stepped up to the plate on behalf of MHI’s government affairs efforts through your contributions to the MHI-PAC.

MHI-PAC continues to be a crucial ingredient in the Manufactured Housing Institute’s work to represent our industry in Washington. Our ability to have sufficient resources to provide political help to those lawmakers who demonstrate an understanding and support of our issues is extremely important. Thanks to our members, MHI-PAC is working to help the Manufactured Housing Institute make the case for our industry on Capitol Hill.

To those who helped make 2011 a success - thank you. Together we can build upon our success and make 2012 a banner year!

MHI members can contact Rae Ann Bevington at 703-558-0675 or  This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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Washington, D.C., January 5, 2012 – The Manufactured Housing Association for Regulatory Reform (MHARR) reports that according to official statistics compiled on behalf of the U.S. Department of Housing and Urban Development (HUD), the manufactured housing rebound evident in recent months continued and strengthened during November 2011, posting its fourth increase in 12 months. Just-released statistics show that in November 2011, HUD Code manufacturers produced 5,332 homes, up from the 3,459 HUD Code homes produced in November 2010, representing a corresponding-month increase of 54%. This increase brings 2011 cumulative industry production, through the end of November, to 47,820 homes – now 1% higher than corresponding industry production of 47,301 homes over the same period in 2010.

This continuing production rebound is consistent with MHARR’s conviction that a manufactured housing industry recovery would begin with its lower-priced, most affordable homes. This view is – and has been – based on several inter-related factors, the most important of which are: (1) a large and still growing inventory of higher-priced homes resulting from foreclosures; (2) an increasing number of available sites within existing manufactured home communities and developments; (3) a gradual expansion of domestic energy production sites and facilities, particularly in the upper Midwest and West; but, most importantly (4) a continuing sluggish economy with relatively high unemployment and under-employment, as well as significantly more restrictive requirements for consumers to qualify for higher-priced home loans. All of these factors are now working in tandem to drive increasing demand for the type of affordable, flexible housing options that manufactured housing can uniquely provide.

Such expanding demand, however, highlights the urgent need for additional sources of both private and public consumer financing for manufactured homes, especially personal property (chattel) financing for less expensive manufactured homes, which provides the most affordable path to home ownership for lower and moderate-income consumers. Without more sources of such financing and genuine competition in the manufactured housing finance market,

A recovery and even a further expansion to significantly higher production levels may difficult to sustain … which should be unacceptable to industry members. Therefore, the industry, but most importantly its post-production sector (i.e., retailers, communities, finance companies, etc.), which deals directly with consumer financing, should be focusing on opening the door for new and additional sources of personal property financing, both private and through Federal Housing Administration (FHA) Title I-insured loans.

In 2008, MHARR took the lead in pressing for the inclusion of the “Duty to Serve Underserved Markets” (DTS) in the Housing and Economic Recovery Act of 2008 -- as a means of expanding the availability of private manufactured home financing -- and has worked since then to have DTS implemented by the Federal Housing Finance Agency (FHFA). Although FHFA, in the current economic and political climate has been able to avoid final action on DTS (even proposing to exclude chattel financing from a final DTS rule), and although the two Government Sponsored Enterprises (GSEs) may not survive in their current form, it is important that DTS apply to – and be fully implemented – either by the GSEs or their successor entities.

At the same time, MHARR has expanded its efforts to increase the pool of FHA Title I- insured loan originators by directly meeting with top Government National Mortgage Association (GNMA) officials and pressing them to address restrictive GNMA securitization requirements that have effectively prevented entry into the FHA Title I-insured personal property loan market by other than one or two lenders. Aside from expediting an industry recovery, the industry and consumers, quite simply, cannot and should not tolerate the domination of this important segment of the consumer financing market by only one or two companies. Thus, at a December 14, 2011 meeting, MHARR was able to secure the commitment of those officials to re-examine the GNMA criteria and their de facto suppression of competition and loan originations within the FHA Title I-insured loan program, where originations have been stagnant at historically low levels. Having opened this window of opportunity, it is now crucial that the industry’s finance companies, retailers and communities follow-up by providing GNMA the information needed to support a relaxation of those criteria.

Expanding the availability of manufactured home financing should be a top priority for the industry, but more so for its post-production sector. An MHARR analysis of this important issue will be published in the February 2012 “MHARR Viewpoint” column in The Journal of Manufactured Housing.

The Manufactured Housing Association for Regulatory Reform is a Washington, D.C.-based national trade association representing the views and interests of producers of federally-regulated manufactured housing.

by Eric Miller

Rent control isn't such a hot topic in California anymore, except when it comes to 'mobile home' and manufactured housing communities. That's because most communities in the state don't have vacancy control. When an apartment turns over, rents revert to a market rate. Manufactured home communities are an exception.

Read more...