Bank Challenger Picked to Run Consumer Agency
President Barack Obama indicated on July 17 that he would nominate former Ohio Attorney General Richard Cordray as head of the Consumer Financial Protection Bureau (CFPB). As Ohio attorney general, Cordray challenged banks over mortgage foreclosure practices, but his nomination is likely to be opposed by U.S. Senate Republicans and the financial services industry. Currently, Cordray is the top enforcement officer at the CFPB. The administration concluded that Harvard Law Professor and current White House Special Advisor to the CFPB Elizabeth Warren would not win confirmation from the Senate, but Senate Republicans already have said they would block any CFPB nominee unless the agency’s structure is changed. “Until President Obama addresses our concerns by supporting a few reasonable structural changes, we will not confirm anyone to lead it. No accountability, no confirmation,” said U.S. Sen. Richard Shelby (R-Ala.). The administration said it would be willing to consider some changes to the bureau, but it would not support the replacement of the directorship with a five-member commission. Meanwhile, Warren applauded the nomination, “Rich has always had my strong support because he is tough and he is smart — and that’s exactly the combination this new agency needs.” If Cordray is confirmed, he will likely take a strong stance against fraudulent and abusive practices among financial firms. U.S. Rep. Carolyn Maloney (D-N.Y.) says of Cordray, “While I am disappointed that Elizabeth Warren won’t be at the top of the agency she envisioned, Cordray was one of her first hires as its director of enforcement, and was by all accounts a smart and tough attorney general in Ohio.”
From “Bank Challenger Picked to Run Consumer Agency”
Wall Street Journal (07/18/11) P. A2 Solomon, Deborah; Randall, Maya Jackson; McGrane, Victoria
Commercial Property Still Strong Despite Pessimism
Commercial real estate has been faring better than watchers predicted, with banks holding commercial and multifamily real estate loans feeling less pinched of late. A Mortgage Bankers Association report shows that the share of commercial loans at least 90 days past due held at 4.18 percent in the first quarter after falling from 4.41 percent in the third quarter of 2010. Fitch Inc. adds that about $2.5 billion of previously delinquent securitized commercial mortgages were resolved or liquidated last month, the second-highest total on record.
From “Commercial Property Still Strong Despite Pessimism”
American Banker (07/13/11) P. 1 Ulam, Alex
Obama Administration Eyes Ways to Aid Rental Housing
The Obama Administration is looking to bolster lending for rental housing as the struggling U.S. real estate sector has kept potential buyers from moving forward, a top Treasury official said on June 24. “We support a housing finance market that provides liquidity and capital to support affordable rental options and help alleviate the burdens that many low-income households face,” U.S. Treasury Under Secretary Jeffrey Goldstein said during a housing conference. He also said his department is exploring how private entities can finance affordable multifamily housing — possibly with limited, targeted federal support. Goldstein said the administration’s array of options to expand support for lending for multifamily rental properties includes reforms, such as sharing risks with private institutions. He said private credit markets generally have underserved the multifamily market that caters to low-income households, choosing instead to invest in high-end developments. Only 32 percent of low-income families have access to sufficient rental options, he added.
From “Obama Administration Eyes Ways to Aid Rental Housing”
Reuters (06/24/11) Chadbourn, Margaret
Industry News
Manufactured Home Mania
Prices on stick-built residences have come down significantly, but they still do not boast the affordability of manufactured homes — which can be purchased brand new for less than $50,000. “They serve a purpose because not everybody can afford a $200,000 home,” notes Jan Garber of Metro Brokers in Grand Junction, Colo. Garber also says that older Americans “like to travel and have a place to hang their hat when they come home.” Situated on small lots, the yard work and other maintenance is kept to a minimum, making manufactured homes a popular option for snowbirds as well as for retirees who do not travel much. Residents in senior developments also gravitate toward the security, aesthetics, and neighborly feel offered by these communities.
From “Manufactured Home Mania”
Grand Junction Sentinel (CO) (07/15/11) Stine, Penny
ELS Announces Closing on 35 Hometown Properties and $200 Million Term Loan
Equity LifeStyle Properties Inc. (ELS), which leases sites that accommodate factory-built housing and recreational vehicles, has closed on just under half of the 76 manufactured home communities it is acquiring from Hometown America LLC. The total purchase price will be $1.43 billion, and ELS paid $451 million toward that amount as part of the July 1 closing on 35 Hometown America properties. ELS expects to close on the remaining 41 properties by the end of the calendar year. In all, the transaction will include the 76 properties, more than 31,000 sites, and certain manufactured homes and loans secured by manufactured homes.
From “ELS Announces Closing on 35 Hometown Properties and $200 Million Term Loan”
MarketWatch (07/01/11)
Sun Communities Buys Western Michigan Manufactured-Home Communities
Through a transaction valued at $143.2 million, Sun Communities Inc. has acquired 18 properties from Kentland Communities. The deal includes 17 manufactured home communities in western Michigan — which together have 191 manufactured homes and 5,042 home sites — as well as one recreational vehicle park, which has 281 RV sites. Sun Communities, based in Southfield, owns and operates five dozen communities in its home state and also owns RV resorts in Delaware, Florida, and Texas.
From “Sun Communities Buys Western Michigan Manufactured-Home Communities”
Crain’s Detroit Business (07/01/2011) Munoz, Michelle
UMH Properties, Inc. Declares Common and Preferred Dividends
The board of directors at UMH Properties Inc., which owns 38 manufactured home communities, has declared a quarterly cash payout of $0.18 per unit on the company’s common stock. It also declared a dividend for the period of May 26-Aug. 31 of this year on UMH’s preferred stock, at $0.55 per share. Both dividends are payable on Sept. 15, 2011, to shareholders of record at the close of business on Aug. 15.
From “UMH Properties, Inc. Declares Common and Preferred Dividends”
Sacramento Bee (07/05/11)
Manufactured Housing Institute President and CEO Comments on Research Report on State of the Industry
Following the release of a research report that paints a damaging picture of the manufactured housing sector, an industry official has countered the findings in a statement underlining the positive progress made in recent years. In response to IBIS World Inc.’s paper, Manufactured Housing Institute President and CEO Thayer Long declared that the industry “is very much alive, and very much here to stay.” He conceded that the housing meltdown and economic recession knocked down sales of new manufactured homes in the United States by 57 percent over the past five years but noted that sales of new single-family site-built homes, by comparison, are down a staggering 76 percent since peaking in March 2005. Shipments of manufactured housing units have risen in three of the past four quarters, Long added, while the pace of site-built homebuilding skidded last year to the slowest pace in nearly half a century. Additionally, Long pointed out that excesses in the site-built market, including reckless underwriting, helped to feed one of the biggest economic fiascos in generations. Manufactured housing, on the other hand, avoided a repeat of its own subprime bubble more than 10 years earlier. “As a result,” Long’s statement read, “manufactured housing remains the best housing value proposition in the marketplace, a feat accomplished in spite of tougher self-imposed industry lending standards.” More than 19 million Americans reside in manufactured housing units today, according to Long.
From “Manufactured Housing Institute President and CEO Comments on Research Report on State of the Industry”
RealEstateRama (06/30/2011)
FEMA, Joplin to Provide Housing
The U.S. Army Corps of Engineers will begin working around the clock to build two new communities of 346 temporary mobile homes for some of the victims of the May 22 tornado that hit Joplin, Mo. The mobile homes will have three bedrooms and one bathroom and will ensure that families trying to rebuild their lives will have a place to call home for up to 18 months. The Department of Transportation and FEMA worked together to coordinate the effort with the city. According to FEMA representatives, the waiting list for victims who have been unable to find housing is at 646 — 70 of which have been assigned new homes in the two communities. While the current timeline for victims to live in the temporary homes is Nov. 7, 2012, extensions may be granted depending on individual circumstances. The estimated completion date of the project is in early September, and FEMA will allow families to move in as each home is finished. Rent and utilities for the homes will be provided by FEMA, but additional expenses such as cable are the responsibility of the resident.
From “FEMA, Joplin to Provide Housing”
Carthage Press (07/07/11) Haines, Rebecca
HybridCore Partnership With Champion Home Builders Expands Distribution
Champion Home Builders is entrenched in a new partnership with HybridCore Homes, which sells factory-made kitchens, bathrooms, and other core sections to builders for use in new residences. As part of the agreement, Champion will build and market HybridCore products — which are designed to cut construction time by 50 percent and construction costs by 20 percent to 30 percent. The alliance will target the Washington, D.C., metro area and North Dakota’s oil region — both of which offer significant homebuilding potential, according to HybridCore co-founder Shaun Faber. Troy, Mich.-based Champion currently has 27 factories that build different types of homes in the United States, the United Kingdom, and Canada.
From “HybridCore Partnership With Champion Home Builders Expands Distribution”
Santa Rosa Press Democrat (CA) (07/11/11) Digitale, Robert
Park Place, a Solstice 55+ Lifestyle Community, Awarded ‘Community of the Year’
American Land Lease Inc. recently announced that Park Place, a Solstice 55+ Lifestyle Community in Sebastian, Fla., was named the “Community of the Year (South)” by the Manufactured Housing Institute. An award was presented to the company during the 2011 National Congress and Expo for Manufactured and Modular Housing in Las Vegas. The gated community, located along Florida’s Treasure Coast, offers residents a small-town neighborhood feel, resort-style amenities, and the security of low-maintenance living. The average year at the community includes an average of 30 events and activities, including dancing, themed breakfasts and luncheons, picnics, bingo, water aerobics, water volleyball, pinochle, parties, live music events, theater performance, movie nights, sunset pool parties and more. Additionally, there are several types of clubs and groups that meet often and include many different types of activities from Wii sports to theater to quilting. The Solstice Communities lifestyle brand was launched in December 2010 to distinguish American Land Lease’s 55+ communities from its all-age residential developments and to allow for a more specific marketing effort. American Land Lease President and CEO David Lentz, who accepted the MHI honor, said the company encounters new customers each day “who are delighted to learn how our communities can completely fulfill their retirement dreams at a price that fits today’s scaled-down retirement budgets.”
From “Park Place, a Solstice 55+ Lifestyle Community, Awarded ‘Community of the Year'”
DigitalJournal.com (06/28/11)
MHI News
MHI Briefs Congress on State of the Industry
MHI President and CEO Thayer Long provided an update on the status of the manufactured housing industry at a congressional staff briefing sponsored by members of the Congressional Manufactured Housing Caucus.
The Caucus, which is chaired by Reps. Calvert (R-CA) and Donnelly (D-IN), was originally created in 1997 to establish a firm base of support among Members of Congress for the manufactured housing industry and the millions of families across the nation that live in manufactured homes.
During the presentation, MHI provided an overview and analysis of the manufactured housing industry, market conditions, and challenges and opportunities facing the industry.
Congressmen Calvert and Donnelly also provided opening remarks as hosts of the briefing session.
For more information on the Caucus or to urge your Representative to join, click here
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OHIO AG Tapped to Head CFPB
On July 18, President Obama nominated former Ohio Attorney General (AG) Richard Cordray as the inaugural director of the Bureau of Consumer Financial Protection (CFPB).
The nomination of Mr. Cordray comes as some what of a surprise as many expected the White House to nominate Elizabeth Warren. Ms. Warren has been charged with establishing the CFPB and hiring initial staff. However, she has acted as a lightening rod for GOP discontent. Many Republicans criticized her as too consumer friendly. Because of this, most considered her un-confirmable.
In May, 44 Republican Senators sent a letter to the White House indicating that no nominee would be confirmed unless structural changes were made to the CFPB to make it more “transparent” and “accountable to the American people.”
Despite the administration’s departure from its initial plan to nominate Ms. Warren—who has been mentioned as a potential challenger to Senator Scott Brown (R-MA)—confirmation of Mr. Cordray faces significant obstacles.
Mr. Cordray currently serves as the CFPB’s director of enforcement. Prior to this, he served for one term as Ohio’s Attorney General. He lost his reelection to former Senator Mike DeWine (R-OH). Before his term as AG, Mr. Cordray served as the state’s treasurer and in the Ohio House of Representatives.
HUD Unveils SAFE Act Final Rule
The Department of Housing and Urban Development (HUD) officially released final rules implementing the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act).
MHI believes the final rule positively addresses many concerns raised by MHI in its comments to the proposed rule, including: taking an application; offering or negotiating terms of a loan; and seller financing.
MHI has conducted a thorough legal review and analysis of the final rule, which was distributed to all MHI members.
For additional information, members can contact Jason Boehlert at 703-558-0660 or jboehlert@mfghome.org.
House Approves MHI Supported Measure on Flood Insurance Re-authorization
On July 12, the House approved legislation (H.R. 1309) reauthorizing the National Flood Insurance Program (NFIP) through 2016. The program, which affects 5.5 million policyholders, including manufactured homeowners, is set to expire September 30th.
The measure would provide authority to temporarily suspend mandatory purchase requirements for those in special flood hazard areas and provide a five year phase-in of flood insurance rates for newly mapped areas. Local governments could request no more than two 12 month extensions.
The program’s authorization expired in 2008 and has been continuing to operate for the past three years through short-term extensions.
The bill now awaits a vote in the Senate.
For additional information, members can contact Jason Boehlert at 703-558-0660 or jboehlert@mfghome.org.
MHI to Weigh in on GSE Reform Bill
Reps. Miller (R-CA) and McCarthy (D-NY) introduced legislation (H.R. 2413) eliminating Fannie Mae and Freddie Mac and merging them into a new entity.
MHI has been asked to weigh in, by Congress and other trade groups, on the reshaping of the housing finance system and the role of government in housing finance in order to ensure that manufactured housing, which last year accounted for 13.5% of all new single family homes sold, is given equal access to credit.
Under the Miller-McCarthy proposal, this new entity would be limited to assets of $250 billion and a market share of no more than 50 percent. It would be governed by a five member board within the Federal Housing Finance Agency (FHFA). Lending institutions securitizing through the facility would pay a guarantee fee on loans and investors would pay an additional re-insurance fee to cover catastrophic losses.
The entity would also have to provide “equal access” to all mortgage products and lenders, as long as the products are “safe and sound.”
For additional information, members can contact Jason Boehlert at 703-558-0660 or jboehlert@mfghome.org.
