Blog Posting # 621 @ 15 January 2021; Copyright 2020: EducateMHC
Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing!’
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INTRODUCTION: You a ‘woke’ citizen? Content in Part I is a leading indicator of one’s wokeness.
Part II? During a time when we should be enjoying record levels of monthly new manufactured housing shipments, we continue to lag at and behind last year’s performance – and I see no encouraging recovery signs on the economic horizon for our industry and realty asset class!
What concerns me the most is the imminent implementation of massive tax increases to pay for the $600 & $2000 stimulus packages ‘enjoyed’ during year 2020 and now, 2021. Parenthetically, I’ve wondered all along why such monies should even be going to folk who’re already receiving social security checks each month, as well as those who are gainfully employed.
I.
“Amen & Awoman”
Given the remote chance you haven’t heard or read, “Amen & Awoman” is how the opening prayer to the new session in Congress was ended last week. But I suppose we should not be surprised, given the rules package for the 117th Congress includes a proposal to use gender-inclusive language and pronouns, eliminating terms such as ‘father, mother, son, daughter’, and much more.
Terms to be excluded include ‘father, mother, son, daughter, brother, sister, uncle, aunt, first cousin, nephew, niece, husband, wife, father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, stepfather, stepmother, stepson, stepdaughter, stepbrother, half sister, grandson, granddaughter.’
These terms would be replaced with ‘parent, child, sibling, parent’s sibling, first cousin, sibling’s child, spouse, parent-in-law, child-in-law, sibling-in-law, stepparent, stepchild, stepsibling, half-sibling, and grandchild.’
Sure hope this woke nonsense isn’t a precursor of what to expect during year 2021 and beyond, as more liberal policies and practices almost surely will be implemented.
II.
Here We Go Again – & Again….
MHI, to date, says it best in NEWS & UPDATES correspondence to members, dated January 6, 2021. (I’m expecting far stronger language & pointed criticism from MHARR on this matter!)
In recent correspondence, from MHI to the Federal Housing Finance Agency (‘FHFA’), relative to their ‘2021 Underserved Market Plans for Fannie Mae & Freddie Mac (‘the GSEs’), under the Duty to Serve Program, they had this to say:
“…MHI acknowledge(s) the progress GSEs have made in increasing volume of land-home loans and creating new financing optio0ns for the industry’s new CrossMod™ homes, but call(s) for more progress in the development of a secondary market for chattel lending. MHI also discussed GSEs’ financing for land-lease communities for Duty to Serve (‘DTS’) credit.”
The actual DTS Plans make for interesting – and revealing reading. A few examples:
In the Fannie Mae Plan. “The key characteristics of chattel financing for manufactured housing compared with non-chattel financing include:
• Shorter loan terms (typically 20 years instead of 30)
• Higher interest rates (at least two to five percentage points)
• Fewer rights when in default; and
• A more limited pool of lenders, due to the lack of a secondary mortgage market”
Did you know? “Manufactured housing titled as personal property (chattel) makes up the majority of manufactured housing in the U.S. (but) financing options are limited” due to:
• Lack of overall market transparency (making) it difficult to understand risks which discourages Enterprise, lender and investor participation in the market.
• Market data and information on chattel is largely unavailable
• Lack of understanding on how chattel loans perform.
Read those three bullet points again, and ask yourself: ‘Are today’s independent third party chattel lenders’ of home-only loans, members of the Manufactured Housing Institute?’
Answer? YES. Then, why are those three bullet points still questions in search of answers?
Why the disconnect? Think about it. Might it be the chattel lending (home-only) niche is so profitable for a very few firms, that they’re reluctant to provide statistics and information to the GSEs, which would likely lead to greater competition for them?
Fannie Mae’s DTS Plan proposal for measurable Action ‘way back in 2018’? Form an advisory council “…to include at least five lenders (as the industry is dominated by a small number of lenders….), one industry trade association, two manufactured housing retailers, one industry data services company, two chattel loan servicers, one consumer advocacy group, and three (housing) manufacturers….” Two quick observations: First, why no inclusion of land lease community owners in this eclectic mix? After all, by year 2015, 40% of all new homes shipped from factories were going directly into this unique, income-producing property type. A grave oversight – in my opinion. And second; it appears ‘so little progress has been made’ in this Action area, relative to aforementioned bullet points; the year 2020 (i.e. 2021 report) lists only two perfunctory measures:
• “Communicate pilot progress and industry updates
• Identify opportunities for research and collaborative engagements to further the future of a sustainable chattel secondary market”
That’s not much in the way of progress after three years of, what now appears to be ‘lip service’ to Duty to Serve, where manufactured housing chattel lending for home-only loans is concerned.
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George Allen, CPM, MHM
EducateMHC