Clayton Homes’ “Racist” Lending-Credit Unions, ABA React–MHI Mute on Manufactured Home Loan Exposé-Greater Risks to “Black, Indigenous, and Hispanic families, as well as rural and lower-income families of all races and ethnicities” – CFPB’s Uejio
Facts always are whatever they may be. Facts are either elevated or obscured in a variety of ways. But facts – carefully followed, said Mark Weiss, J.D. – can prove to be stubborn things. The “Color of Change” nonprofit previously called Clayton Homes’ lending practices “Racist.” Color of Change claimed to have collected over 30,000 signatures demanding the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) to investigate Warren Buffett-led Berkshire Hathaway-owned Clayton Homes and their affiliated lending. On Thursday afternoon, 5.27.2021 – prior to the Memorial Day Weekend – the CFPB released the following summary of their 55 pages of data in a press release to MHProNews. The CFPB report is a slam on manufactured home lending practices. It highlights the disproportionate harm caused by lending that includes those made by Berkshire Hathaway brands affiliated with Clayton Homes. Those Berkshire-Clayton lenders are 21st Mortgage Corporation and Vanderbilt Mortgage and Finance (VMF). The new CFPB report has drawn attention from CUToday, a national credit union trade group-connected publication. The American Bankers Association (ABA) trade journal has reported on it too. Perhaps true to form, the Manufactured Housing Institute (MHI) – whose members are among those being discussed – has been thus far been publicly silent.
The CFPB report below will be followed by additional information that includes those other trade groups, the scathing Color of Change comments, plus more MHProNews facts, evidence, analysis and commentary.
FOR IMMEDIATE RELEASE: May 27, 2021
MEDIA CONTACT: Office of Communications
Tel: (202) 435-7170
Manufactured Housing Loan Borrowers Face Higher Interest Rates, Risks, and Barriers to Credit, New CFPB Report Finds
Consumers tend to be rural and lower income, and those who do not own the underlying land have the greatest challenges
WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) published a report that provides new insights into manufactured housing financing, a vital source of lending for millions of manufactured housing homeowners. Manufactured housing is a small segment of the overall housing supply, but it is one of the most affordable types of housing available to low-income consumers and makes up 13% of the housing stock in small towns and rural America. Those low acquisition costs, however, often come coupled with higher interest rates and limited opportunity to refinance. Consumers who do not own the underlying land are more likely to see their homes depreciate and have fewer protections if they fall behind on payments. These factors combined can make this affordable housing a potentially risky avenue for homeownership. The CFPB’s report uses new information collected under the Home Mortgage Disclosure Act to shed light on the experiences of these often-overlooked families.
“This report shows the power of the expanded Home Mortgage Disclosure Act data collection to understand the path to homeownership for some of our most vulnerable families, including Black, Indigenous, and Hispanic families, as well as rural and lower-income families of all races and ethnicities,” said Acting Director Dave Uejio. “Much more work needs to be done to understand the options available to these families and how best to help ensure that manufactured housing homeownership can be a path to financial stability for the rural and lower-income families who depend on it.”
The CFPB’s report is based on new information about manufactured housing that was added in 2018 to the list of HMDA data collected. This new HMDA data is the only national level dataset that directly tracks the different types of financing options for manufactured housing. Among the findings in this report:
Overall, around 42% of manufactured home purchase loans are “chattel” loans, which are secured by the home but not the land. In general, chattel loans have higher interest rates and fewer consumer protections than mortgages. Consumers may choose to get chattel loans to avoid putting the underlying land at risk if they default on the loan.
Most manufactured home loan applications are denied, and less than 4% of chattel originations were for refinances. Homeowners seeking a loan on a site-built home are approved more than 70% of the time, but less than 30% of manufactured home loan applications are approved. At the same time, even during 2019’s low interest rates, very few manufactured housing loans were refinance loans.
The top five lenders account for more than 40% of manufactured housing purchase loans, and nearly 75% of chattel lending. The four largest originators are specialty lenders that primarily offer chattel loans to manufactured housing owners. Over time, nonbank lenders have played an increasing role in the manufactured housing lending market, while banks have decreased their activity or exited the market altogether.
Hispanic, Black and African American, American Indian and Alaska Native, and elderly borrowers are more likely than other consumers to take out chattel loans, even after controlling for land ownership. Black and African American borrowers are the only racial group that are underrepresented in manufactured housing lending overall compared to site-built, but overrepresented in chattel lending compared to site-built.
Manufactured housing is an issue of major importance for rural Americans and an important option for affordable housing. The two new manufactured housing data points available in HMDA data have helped fill significant gaps in the understanding of manufactured housing finance that the Bureau faced in its 2014 report on manufactured housing. The CFPB’s report today illustrates the importance of the expanded HMDA data for addressing critical research questions regarding consumer finance for all Americans, even as more work remains to be done to understand manufactured housing lending and the options available to manufactured housing homeowners.
The Consumer Financial Protection Bureau is a 21st-century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.
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Additional Related Information from Third-Party Sources
On May 28, 2021, Inside Mortgage Finance ran a story on the CFPB study above. They ran it with this headline and subheading.
CFPB Sees Stark Differences in the Manufactured Home Lending Market
Refinances are a rarity among manufactured housing loans, according to the study.
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MHProNews note: We will circle back to this point above about refinancing with a comment made by Kevin Clayton and Warren Buffett.
Then, “The ABA Journal is a monthly legal trade magazine and the flagship publication of the American Bar Association. It is now complemented online by a full-featured website, abajournal.com and its various enewsletters and apps.” That is per Wikipedia. On May 27, 2021, the ABA Journal online edition said the following about the CFPB’s published findings about the manufactured home lending market.
Approval rates for manufactured housing and chattel loans lagged behind those for site-built homes, according to a new report released by the CFPB today. About 35% of manufactured housing applications resulted in a loan being originated, while 32% of applications were denied. The remaining percentage of applications were either withdrawn by the applicant, closed due to incompleteness, or were approved but not accepted by the borrower.
Site-built homes, meanwhile, had approval rates around 73% and denial rates of around 7%. The report acknowledged that “borrowers of site-built mortgages have higher median income and credit score than manufactured housing borrowers.” Manufactured home loans, especially for homes on leased property, have generally been considered riskier and thus receive different treatment for underwriting purposes—for example, the Federal Housing Administration guarantees manufactured home loans under a different program than it does for traditionally built houses.
Chattel loan applications—those made for the purchase or refinance of mobile homes where borrowers do not own the underlying land—had an origination rate of about 20% and a denial rate of around 50%, though the CFPB noted that this could be due to the fact that “borrowers may not know which lenders offer chattel loans and, therefore, apply for chattel loans from lenders that do not offer them, which leads to higher denial rates.”
The report noted that “compared to mortgages for site-built homes, [manufactured housing] mortgages tend to have smaller loan amounts, higher interest rates, fewer refinances, and less of a secondary market, patterns that are even more acute for chattel loans. Additionally, chattel loans have shorter loan terms than mortgages for either [manufactured housing] or site-built homes.”
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CU Today describes itself saying their “singular goal is to help credit unions to grow and better serve their member-owners.” Among their listed sponsors and collaborators are the Credit Union National Association, or CUNA. “CUNA is the only national association that advocates for the entire credit union movement.”
Much of the CU Today report on 5.27. 2021 was a repeat of the bullets of the CFPB report. That said, doing so allowed them to publish their initial brief on the topic by 7:36 PM on the same day that the CFPB released their report.
Here is how CU Today reported the CFPB’s findings.
Mortgage Borrowers on Manufactured Homes Paying Higher Rates, CFPB Report Finds
05/27/2021 07:36 pm
WASHINGTON–A new report from the CFPB says borrowers who take out mortgages on manufactured homes are paying higher interest rates and often have fewer opportunities to refinance.
The CFPB said manufactured housing finance is a “vital source” of lending for millions of homeowners and that while it is a small segment of the overall housing supply, it is also one of the most affordable types of housing available to low-income consumers, comprising up 13% of the housing stock in small towns and rural America.
“Those low acquisition costs, however, often come coupled with higher interest rates and limited opportunity to refinance,” the CFPB said. “Consumers who do not own the underlying land are more likely to see their homes depreciate and have fewer protections if they fall behind on payments. These factors combined can make this affordable housing a potentially risky avenue for homeownership.”
The CFPB said its report is based information collected under the Home Mortgage Disclosure Act.
‘Power of Data’
“This report shows the power of the expanded Home Mortgage Disclosure Act data collection to understand the path to homeownership for some of our most vulnerable families, including Black, Indigenous, and Hispanic families, as well as rural and lower-income families of all races and ethnicities,” said Acting Director Dave Uejio. “Much more work needs to be done to understand the options available to these families and how best to help ensure that manufactured housing homeownership can be a path to financial stability for the rural and lower-income families who depend on it.”
The CFPB’s report is based on new information about manufactured housing that was added in 2018 to the list of HMDA data collected.
The Findings
According to the CFPB, among the findings in the report:
Overall, around 42% of manufactured home purchase loans are “chattel” loans, which are secured by the home but not the land. In general, chattel loans have higher interest rates and fewer consumer protections than mortgages. Consumers may choose to get chattel loans to avoid putting the underlying land at risk if they default on the loan.
Most manufactured home loan applications are denied, and less than 4% of chattel originations were for refinances. Homeowners seeking a loan on a site-built home are approved more than 70% of the time, but less than 30% of manufactured home loan applications are approved, according to the CFPB. At the same time, even during 2019’s low interest rates, very few manufactured housing loans were refinance loans.
The top five lenders account for more than 40% of manufactured housing purchase loans, and nearly 75% of chattel lending. The four largest originators are specialty lenders that primarily offer chattel loans to manufactured housing owners. Over time, nonbank lenders have played an increasing role in the manufactured housing lending market, while banks have decreased their activity or exited the market altogether, the CFPB said.
Hispanic, Black and African American, American Indian and Alaska Native, and elderly borrowers are more likely than other consumers to take out chattel loans, even after controlling for land ownership, the CFPB said. Black and African American borrowers are the only racial group that are underrepresented in manufactured housing lending overall compared to site-built, but overrepresented in chattel lending compared to site-built.
Note that the 3 examples above are sufficient to demonstrate that the Manufactured Housing Institute (MHI) – which has been identified by some as working on behalf of Berkshire Hathaway-owned Clayton Homes and their corporate affiliates and allies – could have done a post on 5.27 or 5.28.2021. But a check of the MHI website on 5.31.2021 indicated that no such post by the Clayton-backed trade group in the form of a response to the concerns raised by the CFPB.
Next, will be two posts from the Color of Change, from which the “Racist” allegation tagged onto Clayton Homes and their related lending has been made. First, a few words of introduction about the Color of Change nonprofit group will shed light on why sharing these comments, vs. an array of others that have occurred, matters.
On the Color of Change nonprofit and issue-advocacy website, claims they have 7 million members. InfluenceWatch says the group is mainly online. Among the co-founders is Van Jones, who worked in the Obama-Biden Administration and has been a CNN commentator for some years. In an undated post, the Color of Change has a page that says the following. Note too that InfluenceWatch pegs the Buffett-backedNoVo Foundation as one of the Color Of Change donors or funding sources. The NoVo Foundation is operated by Warren Buffett’s son Peter and his wife. Actor Danny Glover has sat on the NoVo Foundation board of directors, as MHProNews has previously reported. The NoVo Foundation has also funded the leftist Tides nonprofit, which in turn has supported MHAction as well as other organizations that have been used to influence commentary by lawmakers, public officials, and the media regarding manufactured housing industry business practices. A primary donor to the NoVo Foundation for years has been Warren Buffett, who as was previously noted, is the Chairman of Berkshire Hathaway (BRK), which owns Clayton Homes, and its lending affiliates, 21st Mortgage Corporation and Vanderbilt Mortgage and Finance.
Keep in mind that the link below from the text pulled from Color of Change points to a document cloud item found linked here is a hit on Clayton Homes and their affiliated lending, per the Seattle Times and BuzzFeed News.
With that background, the following, per Color of Change.
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After collecting 30,000 petition signatures urging the CFPB and the DOJ to launch an investigation into Clayton Homes’ discriminatory lending practices, we’ve still received no response from either of these agencies. Among the concerns we are calling them to point out is the fact that “federal data shows that Vanderbilt typically charges black people who make over $75,000 a year slightly more than white people who make only $35,000.” Meanwhile, when asked about the issue, Warren Buffett just shrugged it off with appalling apathy.
Now, we must raise our voices to stand with the Black homebuyers who found themselves robbed of their savings and trapped in debt after bad deals with Clayton Homes. Will you call the DOJ today and demand an investigation into Clayton Homes?
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In another undated post from Color of Change that may have preceded the one above, is this, under the heading “Clayton Homes Is Selling a Lie.” Keep in mind that this nonprofit is being funded in part by Buffett-bucks, as the dark money-trail noted above per InfluenceWatch stated. It is useful to know that donations to organizations from corporations or other nonprofits often come with strings attached and reporting requirements. See the illustration below as evidence for that statement. That said, note that these two Color of Change posts above and the one that follows should beg the question: what is Buffett doing funding nonprofits that are attacking manufactured housing lending by attacking their own brands? Once more, the full text of their post will follow the screen capture of the image.
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Clayton Homes Is Selling a Lie
Clayton Homes abuses all of its customers, but Black homebuyers may have it the worst. With ridiculous interest markups and racist insults hurled at customers by collections agents, we can’t afford to have this manufactured home conglomerate dominating the market.
Warren Buffett owns Clayton Homes, a multi-company conglomerate that dominates the manufactured home industry and is quickly becoming known for lying to its customers and cheating them out of money and their homes. In 2014, the company financed 72 percent of the Black people in the United States who took out a loan to pay for manufactured homes.
This targeting is problematic because Clayton is also relentlessly discriminatory in its lending practices. A Black homebuyer making $75,000 a year could expect to pay more interest on their home loan than a white homebuyer making $35,000.
Low-income Black communities can’t afford to keep falling prey to Warren Buffet’s manufactured home empire. Tell government officials to investigate Buffett and his company so that more people don’t lose their homes.
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Additional Information, MHProNews Analysis and Commentary
In no certain order of importance, are the following inputs and observations – often from third-party experts who have studied the issues that directly and/or obliquely apply to this topic.
From a long-time MHEC member came this emailed comment.
“This is a huge indictment of Fannie, Freddie and FHFA for not fully and properly implementing DTS[i.e. Duty to Serve manufactured home lending made law in HERA 2008],and actually fully ignore the centerpiece of it, CHATTEL financing which was supposed to avert such disasters. The report clearly speaks for itself. It should be exposed and blasted all over, and more so hammered over the head of these 3 corrupt entities who have literally got away with murder by bribing half of the industry with bullshit loan programs (you know the alphabet names programs CrossMod, etc.) that nobody uses, but which helps the big companies, and by not implementing DTS, they are driving the homebuyers to the predatory lending, which again helps the big companies…one can write a book about this report and knock the hell [out] of the bad guys, demand an investigation, etc., etc., etc.”
Recall this other MHEC member comment. These are different, but complimentary comments.
There are several voices, including this writer, that have publicly called for an investigation of manufactured home lending practices, so long as it includes an examination of federal agencies such as the FHFA and HUD/FHA to see what role they may be playing in what Minneapolis Federal Reserve researcher James A. “Jim” Schmitz Jr. and his economic colleagues have called “sabotaging monopoly” practices at play used to hobble manufactured housing industry performance.
You may or may not have been a Joe Biden supporter, but either way, the Joe Biden 2020 campaign website made a factually accurate statement. While it applies to other groups too, that assertion arguably applies to the financing issues that trouble our industry and manufactured housing in general. The Biden-Harris campaign site said that access is currency in Washington, D.C.
More specifically, the Biden-Harris 2020 website said the following.
“In Washington, the ability to schedule a meeting with an elected official or his or her staff is a form of currency.” Something similar could – and should – be said about the ability to meet with regulatory agencies. In fact, Biden’s campaign site indicated the same, claiming “Executive Branch officials will be required to develop and disclose to the public any policies that their office has instituted on when to accept or prioritize appointments.”
Now, it is an open question if that is in fact taking place or if it is a form of paltering, a factually true statement that aims at a misleading goal. But the above quotes are part of a lengthy all caps “GUARANTEE” that the Biden campaign pledged to start on “day one” if he were to take control of the Oval Office. MHLivingNews put that claim to the test, see the report linked below.
Keep that in mind for the special report linked here about HUD and MHI, built around their own respective statements.
But it bears repeating that several of the same fingerprints keep coming up with regards to manufactured home lending. For now, let’s simply note that Color of Change, Buffett and his ally Bill Gates have been supporting candidates for years. Where money and endorsements flow, influence routinely follows. That is the view from the left and right, from George Soros-funded Open Secrets on the left, to more right-of-center Influence Watch. So, in unpacking these lending and manufactured home-related issues, we should follow the money trail and pay attention to their apparent goals and benefits. Rephrased, think of the 4Bs. Buffett, Bill [Gates], Barack, and Biden.
Lest someone jump to the incorrect presumption that this is about slamming Democrats, MHProNews has very specifically critiqued Brian Montgomery, a Republican, in saying his Trump Administration appointment was an apparent conflict of interest. It’s head-fakes, conflicts of interest, and wink-and-a-nod deals with regulators that are being called into question by Schmitz, MHARR, and others.
More specific to manufactured housing lending, this writer in his personal capacity rapped the FHFA, Fannie, Freddie, with MHI, MHARR, and Director Mark Calabria, who were among those in attendance. MHLivingNews then reported and documented the reasons for that disgraceful behavior by public officials and the Government Sponsored Enterprises (GSEs or Enterprises) of Fannie and Freddie. Rephrased, once our publications began to unpack the various elements of how the game is played in our industry, our publications have for years called our the facts and evidence out as known and warranted. We also corrected the record on prior misreads as needed, per the Society for Professional Journalism Code of Ethical Conduct.
The Dodd-Frank Act that created the CFPB was passed in 2010 under the Obama-Biden term of office. It was part of their response to conventional housing lending sins. Thus, it must be stressed that the ills in manufactured home lending in the late 1990s that came to an end in the early 2000s were but a “pimple on an elephant’s ass” to borrow the colorful phrase of an industry insider noted in the highly relevant report linked below, as well as in the opening comments found in a Listening Session address found on the FHFA website at this link here.
Note that manufactured housing largely cleaned up its own act years before the CFPB came into existence in terms of liar loans and document fraud, etc. Says who? Marty Lavin, J.D., a manufactured home lending expert and an MHI award winner. Tim Williams, President and CEO of 21st Mortgage made a similar statement about the industry having cleaned up its own lending sins of fake down-payments and fake documents that occurred in the late 1990s and early 2000s. New procedures were put in place by the remaining industry lenders.
The CFPB referenced its 2014 research report. MHLivingNews was referenced as a footnote in that research. When the search for the CFPB and manufactured home lending was entered into Google, it yielded another report on MHLivingNews.
Sabotaging or Subverting the Manufactured Home Market from Within
It is not just Schmitz, Cochrane, and others that have been sounding the alarm about collusion between builders, trade groups, and federal officials. Several mainstream media outlets have pointed their finger at Clayton Homes, Warren Buffett, so-called predatory and more costly lending, and Buffett-Clayton’s arguably diabolic “moat” methods.
The Kevin Clayton comment is from the video with transcript found at the link below. That report details the market changing impact of these arguably illegal and unethical business practices, which includes the letter from Tim Williams at 21st Mortgage Corp that cut off lending to thousands of independents, many of which went under. When Kevin said he plans to make it hard on competitors with the Buffett moat methodology, he was not kidding.
Bill Gates has been referenced several times by this publication for the statement below because it happens to fit time and again. Gates has said that Buffett’s methods are parasitic. The CDC defines a parasite as something that feeds off its host. The quote that follows the one by Gates is from a self-proclaimed Buffett admirer Robin Harding for the Financial Times. Note that Harding also stresses that Buffett has a reputation not for creating but for undermining a market to the benefit of one or more of his own brands. That lines up with the Gates comment.
Harding has called for antitrust enforcement. Where is that in manufactured housing? Where is the DOJ? The FTC? While the CFPB has fined Clayton’s lending, where is there serious enforcement efforts? <?i>
Now, keep in mind that Kevin Clayton had the following to say about Buffett’s insight into manufactured home lending.
The CFPB’s new report has said that refinances on manufactured homes are only about 4 percent of the total market share of such chattel, personal property, or “home only” loans being made.
The Urban Institute said that to the extend that manufactured housing has fewer lending options, it hobbles resale values. That too fits with the CFPB’s new data. The possible take-aways from these concerns about manufactured home lending are many. But among them is – with all of this evidence, from federal as well as private sources – where is the federal or state enforcement of existing laws?
Manufactured housing is operating at a lower level today as measured in total new HUD Code manufactured housing shipments than when Buffett entered the industry. Note that the claims made are facts, backed by the evidence, and then applying common sense to what those facts, quotes, and evidence reveals.
Ironically, Skyline Champion’s (SKY) own investor pitch-deck provides ample evidence for manufactured housing industry underperformance. That same SKY pitch-deck further provides evidence that Mergers and Acquisitions are a key part of their business model.
MHProNews reported in 2018 in a fresh light the Buffett comment that the problem with the manufactured home industry is resale.
Resales routinely require financing. If the goal for manufactured housing has been parity of treatment with conventional housing, as MHARR has advocated for years, then hobbling resales is an obvious “moat” move. For conventional housing, resales are no problem. Why is it so with HUD-Code manufactured homes? The facts and evidence – along with third-party reports that look in – routinely point back to Buffett, Clayton, and limited lending. MHI is part of that moat, in this thesis, says third-parties like Sam Strommen at Knudson Law.
Knowing of the industry’s lending woes, prior to the Berkshire entry into the manufactured housing market MHI’s literature previously pointed to Eric Belsky, then with the prestigious Harvard Joint Center for Housing Studies (JCHS). Now, Belsky’s name has been purged from the public side of the MHI website. That noted, Belsky apparently thought the lending would recover, and manufactured housing’s other obvious strengths would propel it beyond new conventional housing in total sales.
Clearly, Belsky was mistaken. But why? One factor was also mentioned by Belsky, without perhaps realizing how it would be applied to our industry’s current and corruption-riddled mess.
It’s a statement that most every manufactured home retail or community professional who experienced the slide from 1998 to 2008 know all too well.
The low level of performance caused by lack of lending and other factors act as a barrier of entry. It bears mention that along with lending, the most commonly mentioned issues around manufactured housing that keeps sales at historically low levels during an affordable housing crisis are the following.
Financing, which an array of sources beyond the CFPB has mentioned. Some of the reports linked from this article go into deeper detail about the facts and evidence regarding specific aspects of the lending money trail. Not to be overlooked is this linked report, wherein Buffett is quoted early on as saying he would have Berkshire owned Clayton Homes portfolio their loans. That strategy would only be an effective moat if the laws that regulate and regulators FHFA, Fannie Mae, Freddie Mac, and FHA Title I and Title II lending somehow resulted in curtailed, limited, or no lending – especially on personal property loans. Why especially chattel/home only loans? Because they make up the biggest share of lending on manufactured homes, as the CFPB and others have stated. Not every company can afford to portfolio – keep the loans on their books, as opposed to securitizing loans. In fact, very few could. Berkshire is one of those. Keep in mind too that allegations have been made for years that 21st and VMF undermined the FHFA/Fannie/Freddie process. For instance, when asked by MHProNews, Fannie Mae’s Paul Barretto flatly stated at Tunica Show discussion that other lenders provided performance data to them, but that 21st and Vanderbilt had not done so. Given that loan performance was one of several excuses, valid or not, being used to slow-walk implementation of the Duty to Serve Manufactured Housing, that admission was critical. Perhaps far more revealing was 21st’s Tim Williams comment to MHI members that he was glad that the DTS pilot project for personal property loans had failed. That was months prior to the recent announcement by Fannie and Freddie that they were not planning on pursuing their planned pilots for DTS lending. Given the totality of the evidence, isn’t that Williams comment presaging the Fannie and Freddie announcement one more smoking gun of apparently corrupt insider practices that benefit Berkshire and key MHI insider brands? Meanwhile, they are hobbling the bulk of manufactured home industry independents. That issue of lending alone begs investigation by officials using subpoena powers and taking testimony in public and under oath.
Nonprofits and Image. Buffett and Berkshire bucks flow to a dizzying array of nonprofits, advocacy organizations, and trade associations. One must also bear in mind that Buffett stock flowed to the Gates Foundation. From the Gates Foundation, where Buffett has been a trustee for years, money goes to various causes that are often thinly-veiled advocacy that routinely seems to benefit a Buffett or Gates investment. They also benefit candidates and political stances which also benefit Buffett and/or Gates. The entire philanthro-feudalism industry merits its own probe, but in the context of manufactured housing, what Peter Buffett has said has provided several useful admissions from the standpoint of launching a serious investigation with subpoena powers and taking statements under oath. MHAction is but one of several examples of a group getting Buffett bucks. Then, those groups in turn target problematic manufactured housing business practices that are then used as a cudgel that limits industry image in the public mind, and thus limits sales performance. While the negative reporting issues routinely trace back to Clayton or a Berkshire brand, they also often involve other MHI brands too. Investigators take note – these are arguably parts of the moat method – “sabotaging monopolies” – at work.
The “racist” charge by Color of Change is hardly new. MHProNews and MHLivingNews have reported on those previously too. While that could merit its own investigation, could be either stand-alone or part of a broader probe into Buffett-Berkshire Hathaway-Gates and their influencing methods on manufactured housing. Some examples of the racial charges are linked below.
That apparent racial bias plays into the industry’s image too. Note what Frank Rolfe, Havenpark Capital, RHP Properties and others have demonstrated in manufactured housing. Namely, that by stirring up negative news and more regulations, they are benefiting themselves in their goal of consolidation of the industry’s independents, who are often MHI members or members of a state affiliate. Marty Lavin called the predator practices a “witches brew.”
The regulatory burdens that are erected to purportedly address the problem in effect become one more barrier of entry, persistence, and exit. Examples of outsiders who have made those comments are Carol Roth and Richard Rahn, which can aptly be applied to manufactured housing. That in turn also is part of the apparent “iron triangle” behaviors that Schmitz and his colleagues have dubbed – specifically citing the example of the manufactured home industry – “sabotaging monopolies.
Perhaps as important, in some ways more pointedly than Schmitz’s work, is that of Samuel “Sam” Strommen at Knudson Law. Strommen used over 120 footnoted references to illustrate his claims about manufactured housing firms connected with MHI undermining the industry during an affordable housing crisis.
Not least for the purpose of this report are the years of efforts by MHARR to expose the corruption and “shell game” that has occurred in limiting manufactured housing.
But to demonstrate that this is not just outsiders throwing stones at MHI, Clayton and their ilk, are comments that at the time seemed innocent enough. They often came from MHI staff, or MHI members.
Boehlert, by accident or design, let the proverbial cat out of the bag with this comment. He was later replaced by Lesli Gooch, who is now their CEO. A slide in a presentation by Williams to MHI. It was provided by Williams to MHProNews. The opposition to the “progressive ideology,” in hindsight, is contradicted by Buffett partner’s Charlie Munger’s law firm bragging about how progressive they are. Buffett and Munger share such views. This quote was posted on the Munger, Tolles & Olson website. Munger and Olson both serve Warren Buffett led Berkshire Hathaway.
Then, there has been years of research – decades! – that ,time and again, debunk the claims of those that want to diminish manufactured housing as a good quality, affordable home option.
What is fascinating about these is that MHI routinely ignores on their own website such good news reports that media, public officials, or others might find that could lead to positive action. The screen capture above is but one of numerous examples that MHProNews has done to document the purported subtle subterfuge of Berkshire-dominated MHI.
Summing Up
Because of the pernicious and subtle ways that Buffett-Gates-Berkshire and their respective nonprofit cash flows can influence matters, it is not always easy to discern which attacks are authentic and which are stage managed methods to stir up public officials, media, or others. But the money trail can be, and some of it already has been documented by MHProNews using publicly-available materials. That should be sufficient to induce sincere (vs. posturing) public officials and others who want to act to investigate, expose, and prosecute as needed those who have manipulated the most affordable part of the American housing industry.
Freddie Mac data was recently cited by Mark Weiss, J.D., President and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR). That data points to the lack of affordable housing that the GSEs – and by extension, FHFA, FHA, et al – are responsible for because they have failed to implement existing federal laws.
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MHI has ironically admitted to stage-managing aspects of a recent U.S. Senate hearing. That is hardly new in Congress, but what makes the admission stunning is because it revealed how MHI is using “Razzle Dazzle” tactics to impress those who do not pay sufficient attention to the details. MHI could have used that same method of planting questions in a hearing to achieve a far more important purpose.
But instead, what MHI did was simply give relatively inane questions that they then used to posture once again for their members and other industry professionals who may get their information from affiliated state association or by other means. That demonstrated the following keen observation by former MHI VP and founding MHARR CEO, Danny Ghorbani.
It is no big leap of the imagination to say that when MHI has admitted in writing to stag- managing some things, that they have arguably been involved in doing so previously too. If there is a delicious irony to the various forms of stage managing, it may be that a series of quotes can be assembled that point out these facts.
MHI admits that lending is being thwarted. MHI CEO Lesli Gooch, in her own words, has said as much.
MHI denies that they are colluding with Clayton to manipulate the marketplace. But MHProNews has assembled years of carefully researched evidence, buttressed by third-party information, that makes their denial ring hollow when examined in the light of the facts. But there is more than enough information to open state and federal level inquiries. While the federal inquiry should be obvious, because violations of federal laws are involved, why should states get involved too? Because there is apparently corrupt practices at the federal level, as Schmitz, Strommen, and others have claimed, based on their research. Affordable housing is a critical topic at the state and local levels. If a viable option is being subverted – and production/shipment data plus years of third party university or similar expert level research makes it clear that such is the case – then, states or sufficiently large local jurisdictions could get the ball rolling with subpoenas, FOIAs, and gathering testimony under oath.
MHLivingNews has given MHAction and others they have reported on the opportunity to respond to the charges of collusion – stage managing – their concerns in a manner that may appear to attack Clayton, Buffett, or other MHI members – but de facto has the end result of harming the industry as a whole. They have routinely declined that opportunity. Ishbel Dickens, formerly with the National Manufactured Home Owners Association (NMHOA) claimed in an email to MHProNews that if this publication exposed the underside of the industry, she would enter into a discussion. Yet after years of exposing industry subterfuge, Dickens declines.
Before MHAction, the older NMHOA trade group filled a similar role. Funding to NMHOA can also be traced via so-called dark money channels back to Warren Buffett connected nonprofits/foundations. This playing both sides off against each other may or may not have been known to those carrying out their ‘duty’ to their donors. This merits its own investigation and or be part of the broader investigation into manufactured housing industry woes.
But the many disconnects that exist have their own benefit, when the numerous puzzle pieces are properly laid out and are carefully examined. The picture that emerges is one that leads to the causes of the industry’s underperformance during an affordable housing crisis. Yes, part of that is financing. But there are clearly other factors. It matters not, perhaps, for what reason investigators dig into these issues.
Possible next steps?
Sincere and solution-oriented public officials could probe giants like Berkshire, Clayton, 21st, VMF, and MHI, et al for racial bias reasons.
Public officials could probe Berkshire, Clayton, 21st, VMF and MHI, et al for financing and related market manipulation allegations. That financing is undermining residents living in communities that several MHI member firms are accused of ‘jacking up site rents’ to unaffordable levels. Financing manipulation has been named as the cause for thousands of manufactured home independent retailers going out of business when Tim Williams at 21st ordered lending to them be cut off if they did not sell Clayton Homes or 21st
Public officials could probe Berkshire, Clayton, 21st, VMF and MHI, et al because affordable housing is in crisis. If the housing market is not stabilized there are those who say that another – perhaps worse – version of 2008 could occur, only this time the triggers may be different. The term “unsustainable” is used often by media in reporting on the overheating of the housing market.
Public officials could do such investigations because HUD, FHFA and other federal regulators have been accused of being the sock puppet for the big companies that they claim to regulate.
While media are independent and have certain constitutional guarantees, it may bear fruit to ask certain media outlets about the reports that they have done, and why they may not have done obvious follow-ups? One must keep in mind that Buffett owned dozens of newspapers that failed to properly report on manufactured housing. That only makes sense if the goal was to limit the marketplace. Buffett’s board – and Berkshire advertising dollars – make clear connections between them and several large media conglomerates. But just as mainstream media at first punted and deflected from COVID-Wuhan Institute of Virology claims, and has more recently begun looking at that, something similar may happen if public officials bring specific light on these issues.
While NPR, PBS, and CSPAN have clearly public and private ties that may cause reporting to be somewhat agenda-driven, nevertheless, public hearings are one of several ways that these issues might be brought to a broader public attention on CSPAN or elsewhere.
State and local level cable access shows can also be used to probe these issues and make the broader public aware of the full picture of what has occurred in federally regulated manufactured housing. What does matter is that public officials do open authentic investigations that probe these giants in a manner that is utterly transparent.
The CFPB report fails to mention the Buffett moat, Clayton Homes, 21st and VMF by name. But in as much as they are the largest lenders, producers, and sellers, they are lurking in the details that CFPB has documented.
When slammed by Democratic lawmakers and an array of others, what did Buffett say in reply?
But the evidence-based claims – direct and/or implied – that federal and GSE officials have colluded with the Berkshire brands and others at MHI is only growing. Given the opportunity to debunk those claims, Berkshire attorneys, Clayton’s attorney, MHI and their inside/outside counsel have all repeatedly demurred.
There have been several embarrassing exchanges for would-be defenders of Berkshire and MHI. To be clear, they are “Embarrassing” for those who tried – and failed – to disprove any of the evidence based concerns raised by MHProNews and others exploring these concerns.
Arguably the most thoughtful attempted defense of Berkshire and MHI’s leading brands was from MHI member Andy Gedo. Yet, at the end of the interesting public back-and-forth debate, Gedo made several useful admissions, and landed no blows in defense of those who he attempted to give cover.
Why would MHI member firms work for an underperforming market? Ironically, they have demonstrated that themselves. It is consolidation and acquisitions at a discounted valuation.
These 4 quotes and slides above are from MHI member brands. Once the basics are understood, the initially murky picture becomes clear. The industry is underperforming in several ways that evidence and experts say can be traced back to Warren Buffett bucks and Berkshire Hathaway brands and nonprofits that they support. By getting and keeping the industry underperforming, it acts as a barrier for entry, persistence and exit. That means prices are often lower than they would be otherwise for consolidators.
The bottom line should be this. All of the evidence points in one direction. There is no serious voice, including those accused, that has raised any defense that fits the known facts.
These are not just manufactured housing issues, as important as that is for the 22 million living in a manufactured home. These impact renters. There are 111 million Americans living in rentals, that Scholastica “Gay” Cororaton’s research for the National Association of Realtors proved that many could be paying less for manufactured housing than they do for their rentals.
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While MHI attempted to say what MHProNews, MHLivingNews, and MHARR has for years, namely, that racial equity would be supported if more minorities and other lower and modest income Americans owned a manufactured home. Sure. But what MHI neglected to say was that they and their key members are accused of causing that disconnect.
Ironically, the Obama-Biden administration research recently re-examined by MHProNews itself debunks most of the concerns that have for too long been held by the public about manufactured homes.
Rephrased, there has been a tapestry of lies, an array of deception and misdirection, to borrow those phrases, spun about manufactured housing. There are only two trade publications that are dealing with those issues. Who says? Our would be rivals.
MHProNews has invited MHVillage’s top people to respond to concerns and claims made against them, they have so far declined to comment.
The CFPB research is just the latest evidence-based nail that needs to be driven home by sincere public officials and advocates so that more can own a home with a more affordable payment. For the factual and evidence-based details, examined in the linked and related reports herein.
MHProNews was for a time missing some puzzle pieces, but as tips and insights began to clarify the issues, MHProNews reported – even though MHI, 21st, and Clayton were for a time advertisers. Restated, our reports were based on evidence, not on influence. This is just one of several reasons that the powers that be in manufactured housing have a tactical challenge in dealing with MHProNews’ reporting. Frankly, the powers that be have rattled the sabers numerous times in writing. MHProNews advised inside and outside attorneys as to what would follow.
Evidence and voices from inside and outside of manufactured housing, when carefully examined, points to the need for objective federal, state, and other investigations. After years of lip service, the time for such a serious probe with subpoena powers is now.
Minneapolis Federal Reserve Researcher cited the Seattle Times, which named Clayton Homes and their lending, in pointing out the inequities that plague minority borrowers in manufactured housing,
As to the issues raised in this report, a 500-word executive summary of the pattern and ways they can be solved are found in the WND column linked below. Don’t just read it, share it with your circle. That’s for your benefit and for that of others.
To Roosevelt’s point, complaints without plans and action is whining. By documenting the challenges and then laying out legal solutions, that is how winning gets done. https://www.wnd.com/2021/05/solution-big-tech-oligarchs/
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We are happy to work with members of both major parties and independents to accomplish what is needed for ethical manufactured housing professionals and millions of current and potential manufactured homeowners. Note: MHI loves photo and video ops, but they don’t always mean what they might seemingly imply. Look at Dr. Calabria’s body language. Then click the report linked here. We believe in accountability. Compare and contrast. MHI has proven access. But how do they use it? For photo ops. What positive results have those photo ops produced?
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing.
For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.
This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.
