MHMSM.com presents Factory Built Housing Industry News at Noon with Erin Patla.
We begin with these stories:
REUTERS REPORTS that Warren Buffett will be played by Ed Asner in Too Big to Fail, an upcoming television movie about the financial crisis. Reuters says the movie will be based on a book of the same name by New York Times journalist Andrew Ross Sorkin. “Too Big to Fail” looks at the men and women on Wall Street and in Washington who managed the U.S. economy as it went into a tailspin in 2008 fueled by toxic mortgages.
THE OBAMA ADMINISTRATION has rejected calls for a nationwide moratorium on housing foreclosures amid fears that such a move could cripple an already slow recovery of the U.S. housing market, Reuters reports. “There are a series of unintended consequences to a broader moratorium,” White House spokesman Robert Gibbs told reporters. Industry experts warn it would create a backlog of homes that would later come to the market, depressing prices and further hobbling the economy. Senate Majority Leader Harry Reid and other Democratic lawmakers are pushing for the largest mortgage lenders to suspend foreclosures in all 50 states.
THE WASHINGTON POST reports that a breakdown in the nation’s foreclosure process threatens to create billions of dollars in losses for federally-controlled mortgage finance companies Fannie Mae and Freddie Mac. In letters and in a conference call Thursday, Fannie and Freddie told lenders they would be on the hook for any losses the two mortgage companies might suffer as a result of flaws in the foreclosure process. Bank of America and others have put a freeze on foreclosures, and experts say if these freezes turn into a prolonged delay, Fannie and Freddie would face “billions” of dollars in losses because foreclosed properties couldn’t be sold.
BLOOMBERG reported Tuesday that recovery for the housing market is being restrained by the overhang of foreclosed properties. Douglas Kass, equity fund manager at Seabreeze Partners, told news service that “Housing is haunted by a large shadow inventory and certainly low interest rates have done little to improve that situation.” With low interest rates and falling housing prices, the ingredients for a recovery would be in place under normal circumstances, Kass said. “It’s different this time in housing.” Also from Bloomberg, Morgan Stanley estimates as many as nine million U.S. mortgages in the foreclosure pipeline or already through the process may face legal challenges because of questions about the validity of documents.
“Our stories continue…”
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Now, back to our stories.
THE MORTGAGE PICTURE would seem to go downhill from here. CNBC reported that during a conference call Citibank had with investors, Georgetown University Law professor Adam Levitin said the documentation problems involved have the potential “to cloud title on not just foreclosed mortgages, but on performing mortgages.” According to the article, real estate law requires real paper transfer of documents and titles, and a lot of the system went electronic without much regard to that rule when a note was transferred from one holder to another. For example, one potential result, as explained by Levitin, could be this: a mortgage is still owed, but there’s going to be a problem figuring out who actually holds the mortgage, and they would be the ones bringing the foreclosure. You have a trust that has been getting payments from borrowers for years that it has no right to receive. So you might see borrowers suing the trusts saying, “Give me my money back, you’re stealing my money.” You’re going to then have trusts that don’t have any assets that have been issuing securities that say they’re backed by a whole bunch of assets, and you’re going to have investors suing the trustees for failing to inspect the collateral files, which the trustees say they’re going to do, and you’re going to have trustees suing the securitization sponsors for violating their representations and warrantees about what they were transferring
THAYER LONG AT MHI told MHMSM.com earlier this week that in a normal recession, manufactured housing has tended to do well. It seems clear this recession is anything but normal. Still, if it’s true that the outlook for manufactured home sales improve when the larger markets and economy are in turmoil, the continuing turmoil in the general housing market could bode well for the manufactured housing Industry.
Factory-built Housing in the News
THE KNOXVILLE NEWS SENTINEL recently ran a story about Clayton’s i-house indicating designers are aggressively seeking feedback from potential customers. The paper says the new version features a larger floor plan with an extra bedroom and bath, a more notable front entrance, more natural exterior materials, more windows and expanded outdoor living space. It’s essentially the multi-section version of the dwelling concept that grabbed headlines – and a new, hip, more affluent market niche for Clayton – after its introduction in the spring of 2009. Within a couple of weeks, about 700 respondents filled out a survey about the home, known as i-house 2.0, on the company website. The i-house 2.0 is tentatively slated for introduction in the second quarter of 2011.
Manufactured Housing News
MHMSM.COM, a leading publication of the manufactured and modular housing industry, has created and released an important resource for reporters and editors. The Manufactured Home Fact Sheet for Reporters can help standardize use of industry terms and foster greater understanding of modern manufactured and modular homes. The resource also covers zoning issues, energy efficiency, financing and other areas and is now available at MHMSM.com in the left-hand navigation column.
In Market News…
AFTER DECLINING more than 90 points early in the trading day, the Dow recovered to close up ten points, or just under one percent. Some manufactured housing and related stocks outperformed the broader index. Nobility Homes was up just under four percent and Skyline Corp. rose nearly three percent. Palm Harbor Homes declined nearly nine percent. The manufactured housing composite value was up .9 percent, on par with the Dow.
“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!”