CFPB Opposes 20 Percent Down Payment, Won’t Abuse Powers: Cordray
The Consumer Financial Protection Bureau (CFPB) will not mandate a 20 percent down payment in new underwriting rules for low-risk loans, agency head Richard Cordray testified before the Senate Banking Committee on Sept. 13. The declaration was in response to a question about the CFPB’s ‘qualified mortgages’ (QM) proposal, but it was unclear if he also would oppose a 20 percent down payment as part of a separate plan to designate certain loans as QMs. Cordray also said the bureau does not believe it has the power to ignore or rewrite the Dodd-Frank financial reform law.
From “CFPB Opposes 20 Percent Down Payment, Won’t Abuse Powers: Cordray”
American Banker (09/17/12) Berry, Kate
Shrinking Household Debt Is Good Sign for 2013 Economy
Moody’s Analytics reports that Americans entered the recession carrying debt of almost twice the U.S. gross domestic product. That is now down to under 85 percent and on pace to near 75 percent by late 2013. Economists say falling debt loads, combined with a stabilizing property sector and improving job market, could boost consumer spending growth to 3.5 percent by the end of next year — double the rate this past April through June.
From “Shrinking Household Debt Is Good Sign for 2013 Economy”
USA Today (09/17/12) P. 1B Mullaney, Tim
Federal Reserve Unveils Sweeping Stimulus, Counts on Low Rates to Spur Hiring
Last Thursday, the Federal Reserve launched an aggressive program to spur the economy through open-ended commitments to buy mortgage-backed securities and a promise to keep interest rates low for years. The most significant of its new moves entails the central bank purchasing $40 billion of mortgage-backed securities every month and continuing to buy them until the job market improves — an unusually strong commitment by the Fed. Chairman Ben Bernanke remarks, “We want to see a stronger economy that can cause the improvement to be sustained.”
From “Fed Acts to Fix Jobs Market”
Wall Street Journal (09/14/12) Hilsenrath, Jon; Peterson, Kristina
How the Candidate Who Wins This House Could Affect Your House
Regardless of whether Democratic incumbent Barack Obama or GOP nominee Mitt Romney wins the upcoming presidential election, experts say the housing market will be affected by the economic and employment policies of the next administration. Consumer Federation of America housing policy director Barry Zigas says the next president will have to address questions about the government’s role in housing finance and whether mortgages will be available at affordable rates. Both Obama and Romney have proposed shrinking Fannie Mae and Freddie Mac’s portfolios, but neither has said which model they would prefer to replace the two companies. Obama would continue to promote existing programs for foreclosure relief, support easier refinancing, and implement new housing finance rules and consumer protections under the Dodd-Frank Act — a law that Romney would repeal and replace with streamlined regulations to increase the private sector’s role in the mortgage market. Both candidates support plans to sell government-owned foreclosures to investors that would rent them out; but it is uncertain how Romney would handle consumer finance regulation under the Consumer Financial Protection Bureau, an agency he opposes. Experts believe how the next administration handles federal budget deficits and the national debt will determine the future of foreclosure prevention and homeownership initiatives, and efforts to bolster the economy and create jobs will determine whether underwater homes can be absorbed by the market. According to Mark Willis of New York University’s Furman Center for Real Estate and Urban Policy, “The outcome of the election could affect what price you pay, whether you have such a product as a 30-year mortgage at a reasonable price, whether you have access, and whether the entire mortgage market is going to be served rather than just higher-income individuals.”
From “How the Candidate Who Wins This House Could Affect Your House”
Washington Post (09/01/12) P. E1 Lewis, Katherine Reynolds
Industry News
UMH Properties Announces Acquisition of Two Manufactured Home Communities in Ohio for $5.9M
UMH Properties has completed its purchase of two manufactured home communities in Ohio. The $5.9 million acquisition added 280 homesites to UMH’s portfolio, which now boasts an estimated 10,400 developed sites in 55 manufactured home communities. “We believe the prospects for the MH sector are very favorable and consequently with this new acquisition we have grown our portfolio by 53 percent over the previous three-year period,” UMH President Samuel A. Landy stated.
From “UMH Properties Announces Acquisition of Two Manufactured Home Communities in Ohio for $5.9M”
Benzinga (09/13/2012) Staley, Eddie
Buying a Manufactured Home in Boise? Put It on Layaway
Clayton Homes of Maryville, Tenn., now offers a layaway option that allows residents in Boise, Idaho to save for a down payment while locking in a purchase price and mortgage rate on a manufactured home. Lack of inventory of existing homes for sale in the Treasure Valley has helped buoy the region’s manufactured housing sector. “Right now, business is as good as it’s been in five or six years,” according to Adam Hiaring, assistant manager at Clayton’s Boise location. “Sales are up 300 percent over last year.” The company’s three- and four-bedroom, two-bathroom dwellings range from 1,200 to 3,600 square feet. Working with Clayton Homes, it is possible for buyers to purchase both the land and the home itself as well as to have the home set on a foundation for a total of about $120,000. Rates for a 30-year fixed mortgage can be locked in at near 4 percent without a fee and with a down payment contribution of only 3.5 percent. Additionally, buyers who purchase Energy Star-rated Clayton homes are eligible for a $500 rebate from Idaho Power.
From “Buying a Manufactured Home in Boise? Put It on Layaway”
Idaho Statesman (08/21/12) Forester, Sandra
NECAC Offers Modular Home Program
The North East Community Action Corporation (NECAC), a Missouri-based nonprofit serving 12 counties, is offering aspiring homeowners the chance to purchase energy-efficient modular housing. “Not everyone can build a traditional house,” notes NECAC’s Carla Potts. “But there are other options, and this is one of them. It’s one of the best programs I’ve seen.” Under the initiative, the agency will work up estimates for land, a foundation, and other costs. Qualified applicants who satisfy lenders’ credit requirements will receive purchase financing, after selecting one of four possible floor plans — each with three or four bedrooms and two bathrooms. After a contract is signed, the energy-efficient home, along with major appliances, is ordered and delivered, with NECAC supervising installation and completing the finishing work. “They are as beautiful as you can imagine,” Potts declares. “They are absolutely gorgeous and they’re very practical.”
From “NECAC Offers Modular Home Program”
Lincoln County Journal (09/10/12)
Manufactured Homes Now Get Custom Treatment
New advances in manufactured and modular homes have created a higher quality standard, timely construction delivery, and convenient financing. The short timeline from factory manufacture to delivery and installation increases the appeal of these dwellings, as does the high-quality construction that is seen in more than 80 percent of manufactured homes. Additionally, the units also tend to have significantly lower utility and maintenance bills than comparable site-built homes. Manufactured Housing Institute (MHI) spokesman Bruce Savage said that, for most homeowners, “the McMansion period is over. People are finding that the cost of buying and maintaining [larger homes] is not appropriate for their lifestyles.” MHI noted a 20 percent increase in the number of homes shipped and delivered in the first six months of 2012 compared to the same period last year. Manufactured homes now offer options like granite counters, porches, and brand-name air conditioning and appliances as standard elements, which makes them comparable to traditional structures.
From “Manufactured Homes Now Get Custom Treatment”
Tri-Parish Times (08/23/12) Nixon, Mike
Modular Homes Gaining in Popularity
Although modular home output declined along with the rest of the housing market several years ago, builders say there have been signs of growth in recent years as more people turn to this cost-effective way of building a home. While modular homes had a poor reputation in the past, they now are arguably better-constructed than stick-built homes and offer customized designs that add an upscale touch. “I think there’s a lot of reason they’re growing in popularity,” speculates Rob Anderson, chief inspector for the Massachusetts Department of Public Safety’s building division. “Manufacturers will essentially design to suit your needs. It used to be years back kind of one size fits all.” In addition, the entire project takes less time and costs significantly less than traditional housing, with savings of about 12 percent.
From “Modular Homes Gaining in Popularity”
MetroWest Daily News (MA) (09/02/12) Benson, Brian
Modular Housing Plant Proposed for Bridgeton Port Area
Plans are currently underway for a green modular housing plant to be built in New Jersey’s Bridgeton’s Port District Redevelopment Area by Renewable Jersey LLC. The company plans to convert three of its four warehouses into space for assembly lines, training, and storage; while the fourth, which the city deemed unsafe, will be demolished and replaced with an office building. The New Jersey Redevelopment Authority provided preliminary approval for a $10 million tax-exempt bond to Renewable Jersey LLC to develop the plant. The site is expected to create 128 full-time jobs within the first year and to serve new construction with a 200-mile radius. It is hoped that construction of the modular housing plant will help attract other businesses to the area.
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