MFH News and Views: Sensible Actions By CFPB Could Provide Millions Quality Manufactured Housing
Still recovering from the economic meltdown of ’08 and the recent petroleum fueled housing crisis, which simultaneously priced out the well heeled and struggling alike, many believe the CFPB could hold the key to more American’s obtaining their ultimate goal of homeownership.
There is a widespread view that today’s contemporary manufactured homes could easily be the solution for the lack of today’s quality housing options, potentially helping millions of families that struggle to afford even the lowest priced site built homes. However, the “solution” lies with our elected officials and the regulatory agencies in Washington D.C., namely the Consumer Finance Protection Bureau — a.k.a., the CFPB.
Currently, the nation’s financing system is far from meeting the needs of manufactured home borrowers; thanks to vast inequities in the types of loans available with government backing, provisions and regulations governing small balance loans, and the definitions of a loan originator add to the cost of the home.
While the 2008 Housing and Economic Recovery Act included a “duty to serve” provision, only now has a proposal been made by the CFPB for the possibility of a secondary market for chattel loans with Fannie Mae and Freddie Mac. Unfortunately, after further review … it doesn’t appear to be a very serious proposal that addresses the stark gaps for manufactured home financing.
The following is a recent narrative by PR Rocket News regarding the role of manufactured housing in the affordable home ownership crisis, entitled: Affordable Housing Crisis Generates Surprising Consensus, Baffling Roadblocks to Manufactured Home Ownership Solution
“We need to remove the shackles that the Dodd-Frank Act and the CFPB rules have placed upon our industry.”
–Dick Jennison, president and CEO of the Manufactured Housing Institute
“They are ending up paying more for rental housing than they would end up paying by actually purchasing a lower cost home.”
–Sen Bob Corker, R-Tennessee
“That doesn’t sound optimal from anybody’s standpoint…We should be thinking about whether the (lending) thresholds are exactly right.”
–Richard Cordray, director of the Consumer Finance Protection Bureau
It isn’t often that stakeholders come to agree on any issue, much less one as controversial as the affordable housing crises that has robbed many Americans of their dreams of home ownership.
Yet federal officials, industry leaders and financial experts have found a rare consensus in the role of manufactured housing as a solution–a “vital solution for folks of modest means,” according to Julian Castro, head of the U.S. Department of Housing and Urban Development.
The Impact of Lending Restrictions on Manufactured Housing offers a brief but powerful glimpse into the remarkably diverse voices who have weighed in on manufactured homes (MH) as a solution to affordable housing, and who also seem to clearly grasp the problems posed by misguided regulations.
Access to credit is being denied to those who would have qualified prior to current CFPB regulations; that dampens sales, which reduces resale values, says Marty Lavin, an expert on MH lending.
“We’re taking away the free choice of people without good cause.” Lavin says.
The cascade of effects unleashed by the implementation of Dodd-Frank, which Barney Frank said at one time was never meant to be applied to manufactured homes, undermines the very fabric of American life.
The impact is felt by prospective buyers of modest means, who cannot find financing; and by more affluent homeowners who are ready to step up to a new home, but who all-to-often cannot sell their older MH unless they can find a cash buyer.
This, in turn, suppresses new manufactured home sales, hurting not only retailers, but also employment for tens of thousands of workers who would otherwise find work crafting new homes.
MFH footnote: The above perfunctory quote by Richard Cordray of CFPB reminds us of a remark by Ronald Reagan at Jan 20, 1981 Inaugural Address, “In this present crisis, government is not the solution to our problems, government is the problem.”