Congress Holds Hearings on FHA, HUD Budget — MHARR Submits Testimony

Attached for your information and review is a copy of written testimony submitted by MHARR at a March 11, 2010 hearing of the House Subcommittee on Housing and Community Opportunity regarding the future of the Federal Housing Administration (FHA) and the FHA Reform Act of 2010. The MHARR testimony, which subcommittee Chairman, Rep. Maxine Waters (D-CA) recognized for inclusion in the hearing record, is self-explanatory. The primary HUD-FHA witness at the hearing was HUD Assistant Secretary for Housing-Federal Housing Commissioner, David Stevens.

While the main subject of the hearing was broad-based FHA reform, MHARR’s testimony focuses on and underscores the industry view and position that immediate action is needed by HUD to restore and expand government-insured financing for the industry’s consumers, comprised mostly of lower and moderate-income families. Specifically, the testimony calls for immediate action by HUD to issue a final rule to implement FHA Title I improvements mandated by Congress in the Housing and Economic Recovery Act of 2008 and end the ongoing Ginnie Mae moratorium on the securitization of manufactured housing loans.

The MHARR document also parallels and relates the nearly two-year HUD delay in issuing a final FHA Title I rule to HUD’s continuing mismanagement of the federal manufactured housing program and its failure to fully and properly implement the Manufactured Housing Improvement Act of 2000, a law which was intended by Congress to raise the profile of the federal program to that of housing, thus making it eligible for — and a part of — all of the Department’s housing and finance programs. This failure is manifested by HUD’s refusal to appoint a non-career Administrator for the manufactured housing program as provided by Congress in the 2000 reform law. And the absence of a non-career Administrator, leaving the management of the HUD program at a lower regulatory level, has, in turn, blunted a dozen or so major reform provisions of the 2000 reform law, resulting in the industry’s continuing lack of progress and decline.

In a related matter, HUD Secretary Shaun Donovan appeared on March 11, 2010, before the Senate Subcommittee on Appropriations for Transportation, Housing and Urban Development and Related Agencies, to address HUD’s fiscal year 2010-2011 budget request. This is the Secretary’s second appearance before Congress on the new HUD budget, having testified before the House Appropriations Subcommittee for Transportation, Housing and Urban Development and Related Agencies on February 23, 2010.

As previously reported by MHARR, after analyzing this budget request, the Association has many concerns regarding its treatment of the federal manufactured housing program and its perspective toward the manufactured housing industry. To begin with, the request includes a projected $10.00 per section increase in the HUD manufactured housing label fee. MHARR views such an increase as excessive and unnecessary given the nearly 90% decline in industry production in recent years, to historically low levels. Instead of increasing the label fee and the burden that such an increase would pose for consumers already facing unprecedented difficulty in obtaining financing, HUD should address program staffing, which is at an all time high despite the sharp decline in production. It should also stop its costly and unnecessary expansion of in-plant enforcement activities — featuring mounting intrusions by PIAs and the monitoring contractor in the construction process — under the guise (now exposed as such) of “voluntary” inspection changes, thus reducing needless compliance costs that are ultimately passed to consumers, rather than increasing them.

All of the above matters will be addressed in greater detail at the MHARR Board of Directors meeting later this month.

cc: Other HUD Code Manufacturers, Retailers and Communities

Attachment

Danny D. Ghorbani, President
Manufactured Housing Association for Regulatory Reform
1331 Pennsylvania Ave N.W., Suite 508
Washington, D.C. 20004
Phone: 202/783-4087
Fax: 202/783-4075
Email: mharrdg@aol.com

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