Follow-Up With FHFA on Private Financing

Attached for your information and review is a copy of a January 13, 2010 letter from MHARR to the Acting Director of the Federal Housing Finance Agency (FHFA), Edward DeMarco, following-up on the implementation of the “duty to serve underserved markets” mandate, as well as other issues where FHFA action could help expand the availability of private financing for consumers of manufactured housing.

The letter, which is self-explanatory, stresses the need for urgent action by FHFA to implement the DTS mandate as quickly as possible and to seriously pursue other available approaches to revive the private financing market for manufactured housing. The letter also calls for a further meeting with the Acting Director to follow-up on all of these issues.

Maintaining and intensifying industry efforts for expeditious action on these issues will be extremely important for two distinct reasons. First, it is clear that the GSEs — based on their DTS comments to FHFA and information obtained by industry members — do not want DTS implemented in any way that would provide any significant relief for the industry and its lower and moderate-income consumers. Instead they are seeking to continue with the same sort of garden-variety programs that they are accustomed to — programs that have been used to selectively securitize only a small fraction of manufactured housing obligations and that have reduced private manufactured housing financing to a trickle.

Second, there is currently a great degree of uncertainty in Washington, D.C. regarding the future of the GSEs — given their continuing significant losses — and steps that the federal government might take down the road to change the character and/or structure of the two mortgage giants. Thus, it is important to secure action on a final rule as soon as possible, while the regulatory role and authority of FHFA over the GSEs — under the 2008 conservatorship remains intact.

We will keep you fully apprised as to FHFA’s response and related developments.

Download a PDF file of the letter here.

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