Wall Street calls this a “revenue cliff.” A sudden drop in cash flow. Dodd-Frank regulations that are set to take effect in mid-January 2014 will result in major changes in guidelines for most of our industry’s major Manufactured Home (MH) personal property lenders.
Among the non-captive lenders, the hardest hit will likely be 21st Mortgage Corp. This lender is expecting a decline of up to 47% in loan volume.
MH Retailers who rely on 21st Mortgage should brace for a sudden revenue loss of 50% – 75% including overall loan volume and an adjustment in origination fees.
This will be devastating for many.
An informal survey of our four credit facilities who primarily bankroll the MH chattel financing aide of the MH industry has revealed major changes expected by most, and business as usual for one lender.
Our lender headquartered in San Antonio, CU Factory Built, is at present reviewing their loan products and origination fee policies. Committees have been assembled, reviewing the new regulations and their guidelines.
Informed industry sources tell MHProNews, who advised us, that CU’s very popular “Step Rate” loan product will likely remain intact, surviving the new regulations.
However, this lender’s origination fee schedule could be cut by up to 50%, more closely resembling the origination fee guidelines of their competitor, Triad Financial Services. The final outcome is yet to be determined.
Thus MH reatailers and loan officers who rely upon CU as their primary lender need to brace for a “revenue cliff.”
Our office has learned that Triad, based in Jacksonville, FL, is expecting “business as usual.” Apparently their loan products and origination fee guidelines have been in compliance with the expected changes in regulations.
Our industry’s other major lender, US Bank, with their regional office based in San Diego, is being very tight-lipped about any changes. Their spokesperson recently declined to comment to us.
The anticipated changes in loan products and origination fees will impact everyone in the MH industry. As loan brokers, quite a few of our employees will be devastated.
Analyzing the changes at this juncture is like shooting a bullet at a speeding train. The best advice we can give you is to dig in and redouble your efforts in support of HR 1779 and related.
If each of us contacts our Congressional Representative and two U.S. Senators in favor of HR 1779 and its planned companion bill, there is still time to avoid this fiscal/financial cliff our retailers and communities who sell are heading towards. ##
Dave Shanklin
Loan Consultant
Empire Homes, Inc.
Santa Rosa, CA
800 – 401 – 3372
NMLS ID # 314463
(Editor's Note: All views expressed on MHProNews are those of the author, and may or may not represent those of publisher or our sponsors. We recommend that you contact the representatives of the lenders you work with and see for yourself what they expect. Take Action! You may also find this related article of interest.)
Karl Radde – TMHA, MHI, Southern Comfort Homes – Addressing Bryan City Leaders, Letter on Proposed Manufactured Home Ban
To All Concerned [Bryan City Officials, Others]: As the retail location referenced by Mr. Inderman, I would like to take a moment to address the …