The Case for Dodd-Frank Reform for Manufactured Housing Consumers

MHI’s Lesli Gooch has written an excellent piece in Roll Call on the need for modest reforms that will benefit manufactured housing consumers.

Here is a part of her on-point assessment:

While the law’s intent was to protect consumers, it is currently forcing many credit-worthy families to opt for less optimal housing alternatives and pay higher housing costs. Current manufactured home owners are losing equity as home values drop because potential buyers can’t get financing. In the midst of a national affordable housing crisis, it is unconscionable that federal rules are limiting access to credit for affordable, quality housing.

You should click through to read the rest of this great summation of the case for Dodd-Frank reform.

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The 2016 Election and Affordable Housing

Here is an interesting Washington Times article on the affordable housing issue.

From the article:

The J. Ronald Terwilliger Foundation, a new nonprofit comprising some top names in the housing industry, is aiming to get presidential candidates to commit to solutions to the affordable housing “crisis” afflicting the country, which it sees getting far worse as the nation’s demographics change.

That is great to hear that folks are taking this issue head on. They correctly point out the following:

The J. Ronald Terwilliger Foundation laid out the facts in a recent paper: More than a third of U.S. households, almost 41 million in total, pay more than 30 percent of their income on housing. The government sees anything at 30 percent or lower as affordable.

And, they point out the following:

Part of the blame, according to Patenaude, goes to the government’s response to the financial crisis. First, regulators have made banks wary to make home loans for fear of government lawsuits or penalties if those loans go bad. Second, the 2010 Dodd-Frank law put new regulations on lending while also failing to overhaul the mortgage-backers Fannie Mae and Freddie Mac. The result has been an uninterrupted decline in the homeownership rate.

Now, let us just hope that they will correctly recognize that manufactured housing, the nation’s best source of unsubsidized workforce housing, can and should be a significant part of the solution.

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2015 Convention and Annual Meeting Recap

Over 120 VAMMHA members and families attended the 2015 VAMMHA Convention and Annual Meeting last week in Virginia Beach.

The VAMMHA Hall of Fame added another worthy member with the induction of Norton retailer Lesia Estep (Horizon Homes) into the VAMMHA Hall of Fame.

Outgoing VAMMHA Chair Stan Rush (VBS Mortgage) was named Board Member of the Year.

The following persons were elected officers for 2015-16:

  • Chair – Jimmy Russell (Valley Custom Homes, VBS Mortgage, Round Hill Estates)
  • Vice-Chair – Alex Montagnet (Schult Homes-Rockwell)
  • Treasurer – Randy Grumbine (Clayton Homes of Roanoke)
  • Secretary – Joe Manis (Manis Custom Homes)

In the Board of Directors elections, two new members were elected: Matt Lawson (Tidewater Mortgage) and Mark Pressley (Oakwood Homes of Wytheville). In addition, three Board members were re-elected: Randy Grumbine (Clayton Homes of Roanoke), Shawn McCavanagh (Wimbledon Properties) and Alex Montagnet (Schult Homes-Rockwell).

Thank you to the following convention sponsors:

Clayton Homes

Triad Financial Services
VBS Mortgage

21st Mortgage
Cascade Financial Services
CU Factory Built Lending

Atlantic Bay Mortgage Services
Park Lane Finance

Fleetwood Homes

MH Transit Authority

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Great Article on Factory Built Housing

Be sure to check out this excellent article on factory-built housing from the Akron Beacon Journal.

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Are You a Factory-Built Housing Customer? You Should Be!

Every industry must decide who comprises its target market so that it can be clear about who it serves. Doing so saves a great deal of time and effort because consumers can concentrate on who serves them, and producers can concentrate on those whom they serve.

So, that leads to this important question: “Who is a factory-built housing customer?”

The answer is here.

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Mother May I?

So, you have decided that you want to purchase a manufactured or modular home, and you begin to think about how beautiful your new home will look. But, there is one other thing you need to make sure you address up front, or you might be in for an unpleasant surprise later on.

Read more here.

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But I Won’t Do That…

Factory-built housing retailers and contractors want to do whatever it takes to satisfy your housing needs and to make sure that you have the best home-buying experience you can.

But, did you know that there are some things they just won’t do?

That’s right!

In some parts of the home buying process, no matter how much you want help, no matter how helpful retailers and contractors could be, and no matter how nicely you ask, there are some things they just will not do.

So, do they really want to be that unhelpful to you, the customer? After all, isn’t the customer always right?

The fact of the matter is that there are some ways in which you might want or expect a factory-built housing retailer or contractor to be helpful to you, but they are prohibited by federal and state law from doing so. The government has decided who can help you navigate certain parts of the home-buying process, and in most cases, that list does not include retailers or contractors working with you as a new home buyer.

Specifically, in years past, it was customary to help new home buyers navigate the process of financing their new manufactured or modular home. In a nutshell, new state and federal laws that were enacted in the wake of the housing downturn prevent folks who are not licensed mortgage loan originators (MLO’s) from helping with even some of the most basic things that would have been common practice in years past.

So, while our members will do many things to help you, unless they are licensed MLO’s, here are some things they cannot do:

• Complete your loan application
• Take your mortgage loan application
• Offer or negotiate loan rates
• Suggest a specific lender who might finance your new home
• Advise you on loan terms or discuss particular credit terms
• Present loan terms to you

There are some administrative things they can still do, such as faxing in the loan application that you complete, but what they can do is severely limited.

So, what should you as a homebuyer do?

Here are some tips:

1. Recognize that the retailer or contractor from whom you are purchasing a new home is very limited in what they can do to help you finance your home. Don’t expect them to do more than they can.
2. Ask lots of questions. Retailers and contractors CANNOT steer you to a lender or discuss specific terms and rates with you. But, they can discuss the loan process and provide you with general information.
3. Seek out a lender or mortgage broker with who you feel comfortable and ask them lots of questions, too. Like your retailer or contractor, you need to be very comfortable working with your lender or mortgage broker. Clear communication by all parties will make the transaction go much smoother.

Yes, retailers and contractors want to bend over backwards to please you, the customer. But, because of federal and state law, there are some things they just won’t do.

Cross posted to VBS Mortgage Blog.

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What is Factory-Built Housing?

If you have shopped around for a new home, you have no doubt seen various types of factory-built housing. But, just what are the different types, and what distinguishes them from each other?

In a nutshell, factory-built single family housing can be broken down into two types: manufactured housing and modular housing. The legal difference between the two is the code to which the homes are built.

Manufactured homes are built to a federal building code that is administered by the Department of Housing and Urban Development (HUD). It is not uncommon for these homes to be referred to as “HUD homes.” Based on the number of sections, they may also be called singlewides (one section) or doublewides (two sections). By rule, these homes are shipped to the building site on metal frames that are used for transportation and then remain under home after it is sited.

Modular homes are homes that are built in factories to the locally prevailing building code. In Virginia, that is the Virginia Uniform Statewide Building Code, the same code that applies to site-built homes. There are number of variations among modular homes. For example, modular homes may also be shipped on frames that remain under the home (on-frame modular) or they may be shipped on flatbeds and not have a frame under them when sited (off-frame modular). Some homes may only consists of two sections, and others may consist of a few more.

While all purchasers of factory-built housing can be assured of quality because these homes undergo a number of rigorous inspections, it bears stating that just as is the case with site-built housing, there is a great deal of diversity among different types of factory-built homes. And those differences – manufactured or modular, what kind of manufactured or modular home, and where and how the home is sited – will affect the home’s initial cost, appraisal value and financing availability. Just like site-built housing, there is no “one size fits all” approach for factory-built housing.

The best advice is to speak with retailers and builders of factory-built housing so that you can decide for yourself which type of factory-built housing best meets your short and long term needs. That conversation should also involve lenders, such as VBS Mortgage, who can tell you what loan products are available for the type of home you wish to purchase.

Cross posted to VBS Mortgage Blog

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Culpeper County and Town of Culpeper Impose New House Tax

Live in Culpeper County? Thinking about doing business there? Take note that tax increases are set to take effect there on July 1, 2012. Culpeper County and the Town of Culpeper have imposed new taxes on a number of folks, including new home buyers, according to this story.

In addition to a tax increase on new home buyers, the County and Town have also heaped new taxes on other land uses. Want to build a bank? It will cost you over $12,000 in new taxes according the County website.

Oh, and the other irony? You go to the County website, and right before the section on the new taxes they have imposed, there is a post about an affordable housing needs survey.

You really cannot make this stuff up.

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Federal Reserve Survey Says Housing Market Improving

According to this story from the Washington Post, a survey of real estate agents conducted by the Federal Reserve states that a majority of those survey expressed optimism about the Virginia housing market.

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