On 7.16.2024 the following were the remarks as prepared by L. A. “Tony” Kovach were delivered to the Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac “listening session.” 7 minutes were allocated, which is about 1050 words and that is the word count for what follows in Part I. While the Warren Buffett video recorded statements about implementing the Duty to Serve (DTS) for manufactured housing could not realistically be played during that listening session, his remarks were referenced and linked. That video is posted at the end of Part I.
Part II are prior listening session remarks from 3.21.2021. Note how the two fit together, because there has essentially been no discernable progress in getting DTS support for mainstream HUD Code manufactured homes. The role that some of the larger firms involved in the Manufactured Housing Institute (MHI) and MHI itself are outlined and linked form factually accurate observations linked in both sets of expert views. Part III will be more focused than is typical but will provide some additional context and insight into the importance of these issues not only for the manufactured home industry, but for affordable housing in general, and the ripple effects that this has socially and economically.
Part I
Loper Bright’s Light on FHFA-Fannie Mae-Freddie Mac-the Duty to Serve Manufactured Housing and “a Pimple on an Elephant’s Ass”
Left-leaning CBS News said that roughly half of the country is struggling with housing costs.
Like it or not, there is a sense among tens of millions of Americans that the federal government has not been responsive to the will of the people, nor to the rule of law.
Like it or not, most Americans believe the federal bureaucracy is responsive to corporate and special interests rather than the needs of stressed affordable housing seekers, as arguably notorious Manufactured Housing Institute (MHI) member Frank Rolfe asserted.
“So don’t tell me “we can’t solve affordable housing” because the correct statement is “we don’t want to solve affordable housing,” said Rolfe.
MHI member and manufactured home lender Triad Financial Services recently bragged to investors about the ‘Significant Barriers to Entry’ into manufactured home lending.
Barriers of entry and moats have become more common thinking to the point that DOJ’s top antitrust official, Jonathan Kanter, specifically cited “moats” as an area of concern.
It’s been over 5 years since Warren Buffett said in remarks captured on a Yahoo News video at a Berkshire Hathaway annual event that “I think it would be a good thing to do” for Fannie and Freddie to implement DTS on manufactured housing.
The context of Buffett’s remarks are in this quote from the video transcript:
“Well it may not help profits but it would definitely is good if the Freddie and Fannie are authorized to do more lending against manufacturing homes…manufactured homes are a very reasonable way…to get people to get decent housing and have a home…they are hard to finance to some degree [at] the local bank, frequently…big lenders haven’t wanted to do [manufactured home loans]…It would be very good for America in my view if Freddie and Fannie did more in that area. Obviously, we would sell some more homes, but we would lose financing and we might come out behind, we might come out ahead, but…I think it would be a good thing to do.”
I’m not sure what more ought to be said after the supposed “Oracle of Omaha” says it would be good, doable, and more Americans could buy affordable manufactured homes?!
Kevin Clayton has said that Buffet is a “genius.”
I don’t think that Fannie, Freddie or FHFA officials would argue with Buffett’s financial expertise, wouldn’t everyone listening and reading this agree?
My name is L. A. “Tony” Kovach. I’ve been working in manufactured housing for most of my adult life, starting in the early 1980s. Besides stints in the RV industry and trade show marketing, well over 3 decades have been invested mostly in management and consulting work in manufactured home retail sales, communities, financial services with lenders or insurance companies, production, associations, and others. We’ve been publishing MHProNews.com for approaching 15 years. Based on the known information, MHProNews remains the runaway most read trade media serving manufactured housing. We have been publishing MHLivingNews.com for about a dozen years and our accuracy-expertise has been praised.
That video of Buffett’s remarks along with this commentary will rapidly be posted on the MHProNews website, including previous and related material that won’t fit the 7 minute time limit for these comments. MHProNews cites and links sources.
“The notion that the U.S. economy is “rigged” to benefit the wealthy and special interests” said Pew Research “resonate with many Americans. Seven-in-ten U.S. adults say the economic system in their country unfairly favors powerful interests, compared with less than a third who say the system is generally fair to most Americans.”
“The expansive administrative state Chevron deference encouraged has undermined our system of government, overburdening our citizenry and threatening to overwhelm the founders’ system of checks and balances. Thankfully, the [Supreme] Court in Loper Bright has now corrected its Chevron error…the Committees are compelled to underscore the implications of Loper Bright and remind you of the limitations it has set on your authority.”
– Congressman James Comer (KY-R) Chairman, Committee on Oversight.
Perhaps it is just a governmental glitch, but my well-read comments to the 2021 FHFA listening session on 3.25.2021 entitled “A Pimple on an Elephant’s Ass” have been moved or removed from its original link. Those remarks are and others are posted and linked from the MHProNews.com website. Citizens should know the history of this issue. I’m hereby asking that the FHFA and GSEs swiftly implement DTS as intended by a bipartisan Congress but also that the FHFA restore my remarks and that of others that day to their original web address.
Buffett admitted in those video recorded comments that Clayton’s affiliated lenders would lose money if DTS is implemented. That’s an apparent reference to 21st Mortgage Corporation and Vanderbilt Mortgage and Finance.
MHARR’s President/CEO Mark Weiss, J.D. said MHI CEO Lesli Gooch’s remarks on DTS were “inexcusable and a major problem.”
Doug Ryan while at CFED/Prosperity Now accused MHI and Clayton of thwarting DTS implementation.
Isn’t it troubling that corporate interests get DTS credits for financing land lease communities? George McCarthy with the Lincoln Institute said consolidators of manufactured home communities are making living in manufactured home communities less affordable after those loans are made.
Paltering, posturing, deception and misdirection have all been addressed before. What matters aren’t mere words which aren’t followed up with measurable performance. I don’t think the IRS would give me 15 years to get something done if they asked.
I grew up in an era when we learned the Constitution, the Declaration of Independence, and their meaning.
So I get it why members of Congress are starting to address SCOTUS’ Loper Bright decision with federal agencies. I certainly hope and pray appropriate letters to HUD and FHFA are among those which will be forthcoming. It would be great if public servants actually did what they’re supposed to do without being forced into doing it.
The charade about DTS is over. Buffett spoke. It’s doable. There are no good excuses for not having a robust chattel lending program for mainstream single family manufactured home loans facilitated by the GSEs. See MHProNews for these and prior remarks, linked evidence, and details. ##
Part II – Additional Information with More Masthead on MHProNews Analysis and Commentary
The remarks as prepared that have been moved/removed from the FHFA website referenced above that were delivered by L.A. “Tony” Kovach on 3.25.2021 are as follows. As is mentioned below, A Pimple on an Elephant’s Ass is a quotation from a manufactured housing industry professional.
Enterprise Housing Goals FHFA Listening Session 3.25.2021
By L. A. “Tony’ Kovach
“A Pimple on an Elephant’s Ass.”
That’s how a Manufactured Housing Executives Council (MHEC) member described to MHProNews the comparative losses on manufactured homes to losses incurred in conventional housing during the 2008 housing-financial crisis. He compared those trillions in losses on houses to the far more modest losses experienced by lenders operating in HUD Code Manufactured Homes in the late 1990s into the early 2000s.
Despite that comparative pimple, Fannie Mae, Freddie Mac, and others periodically point back to that problematic so-called “GreenSeco era.” That’s 2 decades in the rearview mirror. How can that be an excuse for treating manufactured homes so differently than conventional housing in access to lending?
The FHFA website says that Enterprise Housing Goals are supposed to “FOSTER competitive, liquid, efficient, and resilient (CLEAR) national housing finance markets that support sustainable homeownership and affordable rental housing…”
Before and after passage of the Housing and Economic Recovery Act (HERA) of 2008 and the
Congressional mandate of Duty to Serve (or DTS) for manufactured housing by Fannie Mae, Freddie Mac – FHFA and other regulators have paid lip service to supporting manufactured homes. That negatively impacts millions. Who says?
HUD Secretary Marcia Fudge spoke recently about the tragedy of increased homelessness in America.
HUD’s sad report is fascinating because James Schmitz Jr. – a researcher for the Minneapolis Fed, and three colleagues – published reports accusing HUD and builders of collusion in deliberately undermining manufactured housing.
Schmitz and those researchers argued that collusion between HUD and builders is a case of “sabotage monopoly.”
They said that sabotaging collusion between HUD and builders increased homelessness, harmed minorities, and cut off the lower income class of all backgrounds from the benefits of affordable manufactured home ownership.
Schmitz and his colleagues wrote positively about the manufactured home option.
Scholastica “Gay” Cororaton’s research for the National Association of Realtors also praised modern manufactured homes.
What makes Schmitz and his colleagues’ charge of HUD’s role in “sabotage monopoly” more compelling are comments from Bill Matchneer. Attorney Matchneer is the former HUD administrator for the Office of Manufactured Housing Programs (OMHP).
Matchneer said HUD’s Office of General Counsel consistently failed to enforce the enhanced preemption clause made law when the Manufactured Housing Improvement Act of 2000 (MHIA or 2000 Reform law) was enacted.
Jim Gray, formerly with the FHFA Duty to Serve program, said in his exit message that FHFA and GSEs – “[W]e have not made as much progress [toward meeting the Duty to Serve mandates] as many of us would have liked; so much remains to be done to reach these [DTS] markets.”
In December 2019, I made two different listening session presentations on the DTS mandates; one virtual and another live in Washington, D.C.
In both presentations, I made the evidence-based case how disgraceful it was that the FHFA and GSEs have ignored the law to the harm of millions.
GSEs and FHFA failures arguably included key corporate members of the Manufactured Housing Institute or MHI.
Several scheduled to present today are aware of the issues I’m raising. Because some worked for HUD, FHFA, GSEs, or are otherwise connected to the manufactured housing industry.
For instance. Lesli Gooch, Ph.D., with the Manufactured Housing Institute (MHI) made statements in her filed EHG comments letter that sound supportive of manufactured homes.
But upon closer examination, Ms. Gooch focused on an unproven plan that Berkshire Hathaway (BRK) owned Clayton Homes – which supports MHI – in their push for their branded CrossModTM homes scheme.
Where was Gooch’s similarly robust support for all other mainstream manufactured homes?
- Fannie calls CrossModTM MH Advantage®.
- Freddie calls their version of CrossModTM CHOICEHome®.
- The known data reveals that these programs are market failures.
Supposedly there have been double-digit sales nationally of CrossModTM – under whatever name – in the last few years. That’s in a market producing some 95,000 HUD Code manufactured homes annually.
Attorney and manufactured home finance veteran Marty Lavin – an MHI award winner – did consulting for Fannie Mae. Lavin told MHLivingNews that MHAdvantage ® was likely to be as successful as MH Select®. Lavin said MH Select® was also a virtual goose egg.
David Dworkin, CEO of the National Housing Conference in federal comments said that manufactured housing was necessary for affordable housing.
Dworkin was fully confident that the GSEs could successful do manufactured home loans. Dworkin previously worked for a GSE as a Vice President.
Edward Golding worked for HUD and the FHA.
In 2018, Golding and 3 colleagues did a post for the Urban Institute. It was a entitled “Manufactured homes could ease the affordable housing crisis. So why are so few being made?”
Citing FHFA data, Golding and his co-authors in that Urban Institute report said manufactured homes appreciated in value. They said manufactured homes could appreciate even more given access to affordable sustainable GSE loans.
What that Urban Institute post didn’t disclose on that specific page is that Berkshire chairman Warren Buffett is a lifetime trustee of the Urban Institute.
The applied logic of Golding, Dworkin, MHARR’s Mark Weiss, and others should make it plain that the GSEs could and should be doing robust lending in manufactured housing.
Oxford Bank has made personal property loans on manufactured homes for some 2 decades. Oxford reportedly loans with credit scores that mirror those of Berkshire owned 21st Mortgage. Oxford purportedly does so profitably and sustainably and at lower interest rates than 21st.
Given those facts and legal mandates, what possible excuse can FHFA and the GSEs give for not robustly making mainstream manufactured home loans for both personal property as well as mortgage lending?
- Why did the GSEs and MHI hold closed door meetings some years ago and never released those meeting minutes?
- How did the MHAdvantage ® CHOICEHome® and CrossModTM magically come to be so similar?
- Why is it that MHI postures support, but has backed or tolerated plans that leave Berkshire owned 21st and Vanderbilt Mortgage and Finance as the 2 runaway largest lenders in manufactured housing?
I am consultant L.A. “Tony” Kovach. I’ve worked in the insurance, RV, trade show, and other professions. But all told, I have some 30 years’ experience in manufactured housing retail, communities, with financial service firms, and builders of HUD Code manufactured homes.
Keep in mind that I was an MHI member for years. I was elected by my peers to sit on the MHI Suppliers Division board.
For a time, I was arguably fooled by the purported paltering and posturing of the MHI flim-flam that has undermined manufactured housing.
That paltering pattern harms millions of Americans while thousands of independent retailers, producers, and others went out of business or sold out at discount.
- Is it mere coincidence that this history fits the Warren Buffett “castle and moat” methodology that Kevin Clayton himself bragged about in a video interview?
- Have you viewed or read the transcript of Kevin Clayton saying that Buffett preaches that Moat to make it hard on Clayton’s competitors?
Applying the “Iron Triangle” notion and Schmitz’s “Sabotage Monopoly” principles suggest that insiders rigged the market in ways that undermine the interests of various competitors.
The late Democratic Senator William Proxmire said that in Washington, two things shed light on what occurs.
- There are no coincidences.
- The other is follow the money.
I encourage all to Google each of these topics yourself!
—-
For instance, Google “Sam Strommen from Knudson Law” on manufactured housing research.
Strommen’s report called what is happening in manufactured housing a case of “Felony” antitrust violations with possible RICO aspects involved.
Strommen has no axe to grind in our profession.
Strommen concluded that manufactured housing was being subverted from within and mentioned Clayton, MHI, other MHI members, plus the Buffett “castle and moat” method too.
Given the degrees, evidence, and experiences of those involved, I have a hard time making the argument for incompetence causing the status quo.
The Rev. Martin Luther King Jr said:
“He who passively accepts evil is as much involved in it as he who helps to perpetrate it. He who accepts evil without protesting against it is really cooperating with it.”
What comes next should include a full and proper implementation of federal laws that include the
- Manufactured Housing Improvement Act of 2000,
- and the Duty to Serve Manufactured Housing as part of the Enterprise Housing Goals.
- It should also include enforcing antitrust and RICO laws too.
Those good laws need to be fully and properly implemented to restore the free market and liberate millions who want affordable home ownership made possible by mainstream manufactured homes. Pax et bonum. ##
Part III – Additional Information with More MHProNews Analysis and Commentary in Brief
1) According to multiple sources, including Senator Sheldon Whitehouse (RI-D), the lack of affordable housing in the U.S. creates a $2 trillion dollar drag on the economy annually.
2) The Manufactured Housing Association for Regulatory Reform (MHARR) is also frustrated with the “nearly two decade” lack of DTS implementation. Their recent and some of their prior comments by MHARR President and CEO Mark Weiss, J.D., are linked below.
3) Prominent MHI member Cavco Industries pointed to the $2 trillion-dollar annual economic loss suffered by the U.S. economy, not unlike Senator Whitehouse and others have done. While there are differences in the data claim as to how many new housing units are needed, Cavco’s statement that it is about 6 million units may be conservative, as the collage below reflects.
To see this image below in a larger size, depending on your device,
click the image and follow the prompts.
4) Last year, MHProNews’ Kovach connected the dots on what has changed since 2021 with respect to DTS. Not much.
5) This writer has been addressing listening sessions, live in Washington, D.C. at the FHFA HQ building, as well as virtually, since 2019. What exactly has all the listening by FHFA-Fannie Mae and Freddie Mac leadership accomplished? It is apparent that the program is not operating as it was intended by Congress. But certain special interests seem to like it this way, which helps explains why the status quo has been so stubborn.
6) The consolidators of manufactured housing apparently like the status quo, which harms residents in hundreds of land-lease manufactured home communities (MHCs) from coast-to-coast.
7) What happened to government of, by and for the people? Why has government become the plaything of special interests’ groups with the deepest pockets, the most nonprofits and lobbyists that money can buy donating to politicians as they see fit and giving cushy jobs to those who exit from their roles in the federal government? This form of soft corruption may be ‘legal’ in some sense, but that doesn’t make it moral, nor does it mean that the will of Congress – which is supposed to reflect the will of the people – is being carried out.
8) If there was any wiggle room that FHFA, or HUD and DOE for that matter, might have claimed under the Chevron deference doctrine, SCOTUS’ Loper Bright has cleaned that issue up.
9) Warren Buffett made it clear that DTS was for the good of the home buying public. If it wasn’t doable, Buffett would have said so. Any serious or sincere debate should have ended years ago. The law is what it is. Congress must use the power of the purse and its oversight authority to push federal agencies into implementation of the issues that have kept the affordable housing crisis raging as millions of citizens from an array of backgrounds and age groups are effectively being denied their shot at the American Dream. Elections loom. Obama-Biden and now Biden-Harris has had approaching 12 years in power. If the Trump-Vance ticket means what it says about being re-aligning the Republican Party into a party for working class, retirees, and the middle class – vs. the ultra-wealthy and their corporate interests – they should make the pivot to enforcing laws already enacted so that the American Dream becomes a reality instead of a nightmare. ###
PS: to be clear, the Masthead on MHProNews editorially supports bipartisan (or nonpartisan) efforts to implement existing laws that were supposed to fix affordable housing by providing a more level playing field for HUD Code manufactured homes. That said, Bush-Cheney Republicans failed to do the job, and Obama-Biden-Harris Democrats have too. It seems that the way to shake up the playing field is to put Trump-Vance MAGA or “America First” backers into office. Test them to see if they will ‘enforce the law’ as they said they would do.
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Stay tuned for more of what is ‘behind the curtains’ as well as what is obvious and in your face reporting that are not found anywhere else in MHVille. It is all here, which may explain why this is the runaway largest and most-read source for authentic manufactured home “News through the lens of manufactured homes and factory-built housing” © where “We Provide, You Decide.” © ## (Affordable housing, manufactured homes, reports, fact-checks, analysis, and commentary. Third-party images or content are provided under fair use guidelines for media.) (See Related Reports, further below. Text/image boxes often are hot-linked to other reports that can be access by clicking on them.)
By L.A. “Tony” Kovach – for MHProNews.com.
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.
Connect on LinkedIn: http://www.linkedin.com/in/latonykovach</s
