Volume Buyers

Keeping you informed and updated!

Doug Ryan, CFED & CFPB

With the Preserving Access to Manufactured Housing Act moving through the legislative bodies lending is a hot button issue in our industry.  Recently MHLivingNews has brought Doug Ryan under fire, building a case that the CFED (Corporation for Enterprise Development) is currently engaged in a conflict of interest with the CFPB (Consumer Protection Financial Bureau).  Both the CFPB and the CFED claim to be consumer advocates.  The CFPB aims to protect consumers from predatory lending while the CFED aims to make sure lending does not become regulated out of existence.  The case for the conflict of interest with Ryan is built on questionable funding. CFED receives a portion of their funding from the CFPB and Ryan refuses to disclose how large of a portion that funding is.

In the article by MHLN the CFPB is quoted as stating that the largest MH lenders are predatory and that the producers are greedy.  It would make sense that suspicion would arise when an organization accepts essential funding from another organization that is in direct philosophical opposition.  Though the article’s purpose was to discuss Doug Ryan and MHLN’s frustration with his actions, what I found most striking was the immense difference between funding for new homes and funding for used homes.  My business deals in new MH and the lending we use is a traditional mortgage, the same as a person would seek when buying an existing or site-built home. Conventional loans are a common occurrence with our new homes.  Hearing that regulation has become so tight that lenders who once helped consumers purchase used homes in the $20K and lower range have backed out of the market because originating smaller loans has become unprofitable is unfortunate.  The CFED makes the argument that sub-prime lending for used homes is not a danger to America’s financial infrastructure the way sub-prime lending led to the most recent housing collapse.   Even though this sub-prime lending does not pose a danger to society, on an individual basis, the structure of a sub-prime loan can still create a lot of stress and potential risk toward the borrower.

The arguments on both sides of the issue are compelling and each hold merit.   Predatory lending and putting profits ahead of ethical behavior is harmful to the society an institution serves.  Likewise, if an institution is unable to generate profits it cannot operate efficiently and will then fail to be capable of serving society.  Forcing people to conduct themselves ethically is a sticky tar pit, but as James Madison wrote in the Federalist Papers #51, “If men were angels, no government would be necessary”.

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July 7, 2015 Posted by | Financial Information | , , , , , , , , , , , , , , | Leave a comment

Saving the Middle Class

Affordable Housing has been a hot-topic issue since before the housing crisis and has become even more of a burning issue since the fall out.  Affordable Housing has always had its share of the housing market but demand is on the rise.  Overall home purchases are down for the ninth straight year in a row and home ownership has dropped to 65%, the lowest it has been since 1995.

Since the housing crisis there has been a strong trend toward apartment rentals, friends rooming together, and moving back in with mom and dad.  The percentage of 25-35 year olds living with their parents is at 36%. This was a slow and steady trend for the least four decades that jumped from 32% to 34% in just the two years of the 2007-2009 recession, and reached its peak in 2012.

Bill Matchneer, a lawyer and former council member for the CFPB, states that manufactured housing is a dire need in the affordable housing market and that its increase in market share is inevitable.  As most of us know the mobile home industry has had a stigma against it from historical quality issues and the disparity of land leased communities.  Due to the HUD code, set in place in 1976 and revised in 1994, the quality standard of manufactured homes has taken tremendous strides in both structural and environmental impact quality.  Bill Matchneer is quoted, “The modern manufactured home is equivalent to site-built at about half the price”.  On the topic of land lease communities, Paul Bradley of ROC USA and organizations like it are helping to increase the quality and appraisal value of homes in land lease communities by assisting residents in the purchase of the community.  ROC USA consults with residents, helping them to form a co-op to purchase the community as well as lending the co-op the necessary funds to purchase at affordable rates.  These co-ops are also given some preferential treatment such as being allowed the first offer when their community is put up for sale.  Studies have shown that communities owned by residents have higher property value, more stable rental fees, and maintain a higher quality of living than their counterparts.  Megan Neff of NextStep, an organization that works through a channel of non-profits, is also helping to increase structural and lending quality by creating a connection between the needs of buyers and the vision of manufacturers.

Datacomp Appraisal Systems, having conducted an appraisal study comparing manufactured homes to site-built homes, came to the conclusion that the old adage of “location, location, location” equally applies to both housing categories.  Datacomp, with no bias toward either industry stated, “When properly sited and maintained, manufactured homes will appreciate at the same rate as other homes in surrounding neighborhoods”.  This revelation of appraisal values is important to understand as the majority of middle-class wealth is comprised of home ownership.  Studies from the Federal Reserve show that homeownership is the cornerstone of middle-class wealth.  The average middle-class home owner has a net-worth of $194,000.00 about 36x that of their renting counterparts who have an average net-worth of $5,400.00.

This information poses some serious questions about the manufactured housing industry.  The first and most obvious question is, “Can manufactured homes save home ownership?”  The second question, only visible when examining what home ownership in America truly represents, “Can manufactured homes save the middle-class?”

June 3, 2015 Posted by | General Information | , , , , , , , , , , , , , , , | Leave a comment

H.R. 1779 Update

HR1779 Preserving Access to Manufactured Housing Act was introduced in the House of Representatives by Representatives Stephen Fincher(R-TN), Bernie Thompson (D-MS) and Gary Miller (R-CA) to reduce regulatory burdens that impede access to affordable manufactured housing finance.  The bill would remedy provisions of the Dodd Frank Wall Street Reform and Consumer Protection Act (Dodd Frank) that impact the consumer’s ability to obtain the mortgage financing needed to purchase a manufactured home.

Bi-partisan Cosponsors are needed!!!

As of 7/26/13, there are 42 cosponsors, 9 Democrats and 33 Republicans.  The House is in recess for the month of August.  The goal is to get 120 cosponsors by the time they return in September. 

We need relief from regulations coming from the CFPB and effective January 14, 2014 without relief, the regulatory burdens to manufactured home loans will impact all facets of the industry and every homeowner.

 MHI appreciates the dedicated assistance from industry members and the national network of state associations to secure co-sponsors to this important bill. For more information on the legislation, visit the MHI Web site or contact MHI Vice President of Government Affairs Jason Boehlert at jboehlert@mfghome.org or (703) 558-0660.

MHI continues to work with Sens. Sherrod Brown (D-OH) and Pat Toomey (R-PA), who respectfully serve as chairman and ranking members of the Senate Banking Subcommittee on Financial Institutions and Consumer Protection, to introduce companion legislation in the Senate.

Please take the time to contact your U.S. Representative and request they co-sponsor the legislation, Preserving Access to Manufactured Housing Act (H.R. 1779).

August 7, 2013 Posted by | Legislation | , , , , | Leave a comment

Agencies Set Mortgage-Servicing Rules for Military Members

On June 21st, 2012 the Consumer Financial Protection Bureau (CFPB), Federal Reserve, Federal Deposit Insurance Corp., National Credit Union Administration and The Office of the Comptroller of the Currency issued that mortgage servicers to provide servicemembers with guidance about information that they need to sell their homes.  This guidance also extends to modifying their loans when they must relocate.  For additional information click here for the press release.

The goal here is to provide the servicemembers who are receiving permanent change in station orders are obtaining “Clear, accurate, and timely information about available options such as loan modification or short sale,” declared the CFPB director, Richard Cordray.

According to the CFPB, approximately one-third of active duty servicemembers get these orders each year and the Department of Defense figures about 180,000 members of the military are homeowners.

The guidance also addresses two specific practices: asking servicemembers to waive their rights under the servicemembers Civil Relief Act as a condition for assistance or skip mortgage payments to become eligible for assistance.

June 26, 2012 Posted by | Financial Information | , , , , , , , , | Leave a comment