MHMSM.com presents Factory Built Housing Industry News at Noon with Erin Patla.
We begin with these stories:
BANKING EXECUTIVES WERE IN WASHINGTON Tuesday to weigh in on the future of Fannie Mae and Freddie Mac. Reports indicated the group overwhelmingly advocated the government should maintain a large role propping up the nearly $11 trillion mortgage market. Bloomberg’s headline from the event focused on comments by Bill Gross, Co-Founder of the bond group PIMCO saying Gross “Urges Full Nationalization of Housing Finance.”
Gross said that to suggest that there’s a large place for private financing in the future of American housing finance is unrealistic. “The only way to bring housing back and to create liquid, financeable mortgage finance going forward would be to provide a government guarantee.”
Secretary Timothy Geithner said the administration will side with those who want fundamental change. “It is not tenable to leave in place the system we have today. We will not support returning Fannie and Freddie to the role they played before conservatorship, where they fought to take market share from private competitors while enjoying the privilege of government support.” Geithner explained that amid the general race to the bottom in credit standards across the private sector, Fannie and Freddie lowered their underwriting standards, providing guarantees for increasingly risky types of mortgages, without charging enough to cover the risks. Mark Zandi, Chief Economist at Moody’s Analytics commented that the Government’s role in housing needs to be pulled back quite significantly, certainly compared to where it is today, but also compared to where it was prior to the crisis. “The void is still quite large,” Zandi said. “The private market is dormant and it can’t step in if the government steps out in the near future.” Critics of the panels have raised concerns that consumer and community groups were excluded from the discussions.
THE NATIONAL ASSOCIATION OF HOME BUILDERS reports nationwide housing starts inched up 1.7 percent to a seasonally adjusted annual rate of 546,000 units in July from a downwardly revised figure in the previous month, according to U.S. Commerce Department figures released Tuesday. The gain occurred entirely on the multifamily side, with single-family housing production falling 4.2 percent to 432,000 units.
Manufactured Housing in the News…
MANUFACTURED HOUSING INSTITUTE of South Carolina Executive Director Mark Dillard told The Times and Democrat in Orangeburg, South Carolina, that statewide manufactured home sales there are running about 30 percent higher compared to this time last year.
“I think people are looking for value when times get a little tighter,” Dillard told the paper. “When they start realizing they can get more square footage for the money, they start looking at manufactured homes.” According to Dillard, manufactured home buyers save $15 per square foot over a site-built home.
EARLIER THIS WEEK the Lula City, Georgia, Council imposed a 90-day moratorium on new manufactured homes in the city. Mayor Milton Turner asked for the moratorium until he and City Attorney Brad Patten better understood a recently enacted state law concerning R-3 development.
A MONTGOMERY COUNTY, PENNSYLVANIA MAN has been charged with insurance fraud for allegedly filing a $1.3 million false claim on storm-damaged modular homes, Pennsylvania Attorney General Tom Corbett announced Tuesday. Corbett said the criminal charges involve a 2008 insurance claim for water and wind damage to eight modular townhomes owned by Kevin Kollar. The vacant homes had been stored at an open lot, and Kollar allegedly claimed they suffered extensive damage during a storm in March of 2008. According to the criminal complaint, Kollar claimed the homes were in [1] “as new” condition, [2] had been wrapped in protective materials and [3] were personally inspected by him on a regular basis during the weeks leading up to the purported storm damage – which Kollar allegedly valued at $1,399,000. Corbett said that Kollar’s claims about the good condition of the homes prior to the storm were directly contradicted by observations and photographs taken by an employee of the business that sold the homes to Kollar.
“Up next, MARKET NEWS”
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In Market News…
MINNEAPOLIS FED PRESIDENT Narayana Kocherlakota [Nah-rah-YAH-na Ko-chur-la-KO-ta] said in a speech to business leaders Tuesday that hints of a recent move by the Federal Reserve to begin reinvesting cash from maturing mortgage bonds to buy more government debt does not indicate the economic situation in the United States is worse than feared. “My own interpretation is that the Federal Open Market Committee action led investors to believe that the economic situation in the United States was worse than they, the investors, had imagined,” he said. “In my view, this reaction is unwarranted.”
[That name is a duzy when you look at it, but really nice sounding when you say it – Eric]
A day of green on Wall Street meant “back in black” for the year, at least momentarily. The Dow closed up 103, but had been up nearly 200 points mid-day. Most manufactured housing stocks were up for the day, including Skyline Corp up more than ten percent, Deer Valley up almost eight percent and Cavco up almost four percent. Palm Harbor Homes was down modestly for the day. The Manufactured Housing Composite value was up 4.5 percent for the trading day.
“On behalf of Production and IT Manager Bob Stovall, Editor L.A. ‘Tony’ Kovach, Associate Editor Catherine Frenzel, INdustry in Focus reporter Eric Miller, and the entire MHMSM.com writing and support team, this is Erin Patla. G’day!”