Scaring professionals is never the point in our news stories or OpEds. In fact, my gripe about some writers or speakers is that all too often their commentary pointed out problems without proposing sound – or any – solutions. Problems exist, but they are often opportunities in disguise once solved. News is news, but in OpEds, my goal is to shed light that leads to profitable progress, rather than spread darkness or fear that leads to loss.
Solutions are profitable in the mid-to-long run, sometimes, even in the short run.
A lack of applying solutions may be profitable in the short run, but can prove costly in the mid-to-long run.
The reason for sharing this intro to this multi-layered column is because of emails with an an attorney involved in manufactured housing. This attorney told me about conversations with MHIndustry owners and pros. Those listeners think said lawyer is using scare tactics, when what he/she is trying to do is inform. That attorney is not alone. We hear similar thoughts expressed regularly.
LASIK, Cracked Windshields and Manufactured Housing
When an eye specialist describes Laser-Assisted in situ Keratomileusis (LASIK), it is done in the context of doing refractive surgery for the correction of myopia. It may be that when a glass shop talks about fixing a nick in the windshield before it gets worse might have an element of 'scare' to it from the perspective of a driver who has the chipped windshield. But no doubt when the driver later hits a bump and watches as their chipped glass becomes a big crack before their eyes, they wish they had listened.
Cooler Heads Prevail
So too when an attorney or any other expert in manufactured housing (or other fields) describes an issue, it should be considered without emotion, objectively. First, to gain understanding and then to decide what opportunity, impact or risk – if any – the issue holds for the listener. Only then can good decisions be made.
Found Money!
If a penny saved is a penny earned, then $25,000 saved is just as surely $25,000 more to the bottom line than you would otherwise have. That $25,000 is the potential fine PER INCIDENT should the Feds or a state regulator do an audit on a non-compliant retailer or manufactured home community owner/operator. 10 incidents at 25k each, is a cool quarter million dollars. Ouch…
I don't sell insurance and I'm no attorney, so my desire to spotlight this issue is purely to help some good souls avoid the pain of the punishment for crossing a line when it is avoidable. The pain is avoidable, just like the chip becoming a crack is avoidable.
'It will never happen to me'
Way too many pros and owners think it will never happen to them. There are reasons the mid-size and up operators strive hard to be compliant. Before dealing with that issue, let's return to the comments by the attorney who wanted to remain anonymous. Quoting:
"I was actually thinking about your captive finance story last week. I went out…and visited with some (industry members) and some local government officials…What surprised me is that so many people I talked with are financing the homes they sell and think that because it’s a "lease purchase" transaction, that they are okay.
I try to explain to them that they are likely operating as an unlicensed lender, but there is a tremendous amount of denial in the industry right now."
The article the attorney is referring to is linked here. It is being read a ton, and while there are those who get it, some are indeed reacting just as the lawyer said, "there is a tremendous amount of denial in the industry right now."
I'm not an expert in this subject, but I have retail and community clients plus readers who have to navigate these waters. My hope is to see them do so successfully. My personal take is similar to the attorney's. Some are simply hoping to fly under the radar. Others think their lease purchase (or other non-compliant program) will help them escape the regulators.
My sincere concern is that we will wake up one day to headlines that XYZ manufactured home retailer or community got tagged and tagged hard. For goodness sakes, to those sleeping, please wake up! Most of the experts we spoke with tend to believe that the mom-and-pop operator can't be legally compliant today, even if they try. Which is one of the reasons why in our column we see there are lenders who can help you operate compliant in a fashion that is reasonable and legal,and/or you can escape up.
Isn't it wiser to modify and profit than to bury head one's head in the sand and risk having 25k chunks – or worse – taken out of your wallet?
That's not fear tactics, its a wake up call to reality.
Year three of our Upturn!
We are always pleased to report the good news, which includes that we are well into the third year of modestly rising shipments. Our opportunities in MH may never have been better, which means there is room to grow even more.
That said, there are hundreds if not thousands of owners and professionals who are skating on ice so thin that it could give way in a moment in the late summer heat.
Since we are not selling a program, so my hopes are three fold:
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That the widest possible number of industry readers turn to solutions that will actually work for them and;
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that we see more grass roots efforts while Congress is on recess to get your representative on board with HR 1779. We have good momentum going, but we need more. If we can add a 2a) then…
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Or 2a ;-) that you then touch base with your U.S. Senators or their staff and let them know that the Senate version of HR 1779 will be filed soon, that it will look a lot like HR1779 and that you want their support. Make sure you let them know that millions of manufactured home owners ability to sell or refi is at stake, because that is a strong motivating factor for them. The fact that one of the most liberal Democratic Senators is good with the pending bill, as is one of the most conservative Republicans, makes this pretty logical.
Getting Everything You Want!
A thoughtful client sent me the following:
"If you can dream it, then you can achieve it.
You will get all you want in life if you help
enough other people get what they want."
— Zig Ziglar
So true! So why not cut through the decades or miasma and provide our customers with ALL of the quality, affordable housing solutions that they want and need?
More and more main stream media articles are touting the many pluses for manufactured homes. The timing is right to Escape Up! That's good, but we must have the courage and discipline to address the handful of concerns that still exist.
Doing so would pay handsome rewards, because we would be putting Zig's maxim to work.
A handful of relatively modest moves would transform manufactured homes from third or fourth choice housing to the first choice in homes for millions. They are, in no particular order of importance:
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Remarketing. We have to give lenders and home buyers an exit strategy in par with conventional real estate. Failure to do so is a huge and costly mistake, while providing the solution would be wildly profitable. Check out this guest column by a solution oriented industry veteran Dan Rinzema linked here.
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Image. No one judges a Mercedes by the 35 year old Pinto or 20 year old Yugo in the junk yard. Why are modern manufactured homes judged by pre-HUD Code mobile homes that in many cases were not properly maintained or installed?
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Financing. The above two points on image and remarketing are arguably among the two biggest factors that keep us from jumping past conventional housing. Wait, what about financing? We have financing and it will remain available. The question is, at what level and rates? When remarketing cuts a lender's losses and turn time on repos improves significantly and image improves, we will be awash in financing. You have to look past lending to the root causes of the current dynamics.
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Best Practices Professionalism. The 700+ credit score customers – about half of all adults and three times more in numbers than those with sub-600 credit scores – routinely need a more professional approach to get them to buy today's manufactured homes. Companies and associations need to promote a higher degree of best practices professionalism, across the spectrum of Industry roles at the point of customer contact. As one example, please consider this guest column by industry retail legend and community owner Dick Moore's point man, Bob Crawford.
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Regulatory environment. Over-reach and "unintended consequences" are the twins that could, once changed, free us to do lease purchase, captive finance or a host of either things that were once legal but now are risky or not legal.
Paraphrasing another recent comment, well intentioned people are killing the goose that laid the golden egg. We need to work incrementally – and in broad strokes – to stop the regulatory over-reach that is killing jobs, depressed home values and harms investment.
Masthead #400!
While your faithful scribe and commentator has done hundreds (thousands?) of articles besides those you find here on this specific blog, this post is Masthead #400.
A regular reader who stays in touch said, “Tony, I don't know how you do it all.” A client said similarly, knowing we have their work, others, plus publishing here and on MHLivingNews.com to juggle. Others share the labors, we have lots of other very fine featured writers and guest columns, plus our Cup of Coffee series that make this anything but a one man operation! My routine thanks and appreciation to our sponsors and all who make this possible.
That said, for our part of what is needed, we are able to scale our operations rapidly. When enough industry leaders step up and say, "We WILL do what it takes to make these changes happen!" the additional steps on ManufacturedHomeLivingNews.com for image building or by others to make cost effective remarketing a reality can be out into place.
Louisville and Tunica are both up in 2013, so was MHI's Congress. Shipments are up. The timing is right for break through changes that will result in break through profits.
But until we reach critical mass need to break through need for ours to become first choice housing, we will continue to work diligently to advance the current progress in our industry.
The word 'radical' comes from the Latin, and it means to 'get to the root' (of the problem). All true solutions are radical. Band-aids are not solutions.
Be a sober, clear thinking, goal oriented radical! Everything else that is 'status quo' may prove over time to fail.
Remember, seeing is believing. ##
PS: Check our many Exclusive and Red HotFeatured Articles for August and see the other new stories at MHLivingNews.com too.
L. A. 'Tony' Kovach
ManufacturedHomeLivingNews.com | MHProNews.com |
Business and Public Marketing & Ads: B2B | B2C
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