Volume Buyers

Keeping you informed and updated!

Julian Castro & Doug Ryan

In recent news two fairly exciting things have happened for the manufactured housing industry.  Manufactured housing has begun to escape its dated reputation for being poor in quality, dangerous, and vulnerable to predatory lending practices.  Through the hard work of manufacturers in the development of new production methods, materials, and technology the industry has taken great strides to compare with and now exceed the quality and visual appeal of their site-built counterpart.  At the same time retailers, affordable housing advocates, and consumers have worked to educate politicians, lenders, and other potential home owners of the new realities in manufactured housing.

Recently the U.S. Secretary of Housing and Urban Development, Julian Castro, gave a speech praising the manufactured housing industry not just for offering a more affordable alternative to site-built homes, but for creating safe and energy efficient homes as well. Clearly manufacturers have made enormous strides in the quality of their product if they have gone from being shunned by the general public to being the center of praise and great admiration by a man whose job is to help Americans have access to quality and affordable housing.

In conjunction with Julian Castro, Doug Ryan, a man who has been at the forefront of lending reform with the Federal Housing Finance Agency is trying to make changes that would affect roughly 35% or manufactured housing consumers.  Currently manufactured home buyers who are putting homes on land they own are able to take advantage of conventional mortgage specifications because they are able to borrow money for the homes as real estate while most people who are borrowing to purchase a home that will be in a community or other form of leased land must classify the loan as chattel or personal property.  Doug is proposing to make lending changes that would allow for better lending treatment for leased land buyers by creating incentives for Fannie Mae and Freddie Mac to become involved in leased land lending.

Without getting into too much detail about the extreme financial differences between chattel loans and real estate loans, it is appropriate to state that those difference can be a deciding factor as to whether a person decides to buy or not.  When we see Doug Ryan making strides to increase borrowing opportunities for a group of people that make up 35% of our consumers, it gives all of us a reason to be excited.

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December 17, 2015 Posted by | Financial Information, General Information | , , , , , , , , , , , | Leave a comment

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”.

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