On July 11, 2021, MHProNews received the following message from Fred Neil, Dover City Councilman, Dover Delaware. His message speaks for itself, but by way of introduction specifically mentions his residency in RHP Properties. Bayshore Home Sales is RHP Properties manufactured home in community sales affiliate. Neil references the upcoming FHFA comments deadline, and the highly-charged controversy over Duty to Serve (DTS) financing. That Congressionally-mandated lending for manufactured housing is some 13 years later still not available on personal property loans for manufactured homes. But the DTS lending is available for community operators that Neil and others decry as “gouging” or for using “predatory” practices. Additional context and linked information will follow Neil’s comments. MHProNews will note that the deadline for comments, per officials at FHFA, is just before midnight on July 17th. As of 6:26 AM ET on 7.12.2021 there have only been a dozen comments posted on the FHFA website, and two of those are apparently a duplication of comments by Tim Williams of the Ohio Manufactured Homes Association.
Here is the email from Neil as sent to MHProNews. The original was also placed on Neil’s letterhead and is available as a download on his letterhead linked here. His comments were forwarded this morning to officials at the FHFA, in response to Neil’s request.
|to:||“L. A. Tony K”|
|date:||Jul 11, 2021, 3:42 PM|
|subject:||Re: Tim, Fred, Bob, Ben, Kevin, Liz, Dave, Phil, Doug, et al – that more affordable manufactured home financing topic|
To: MH ProNews July 11, 2021
Thanks for this notice. I tried to find some specific form that I could use from the FHFA on the subject of financing in undeserved communities. The deeper I dug on the web site, the more I realize if I sent my message on DTS financing to the wrong place, my remarks would be recycled without being read. I am counting on you to place my remarks on record with the FHFA. I have added a PDF is preferred.
I am also sending this email to Mark Weiss, who I discovered by researching via your email. He has a different stake in the industry, and like us, he may or may not agree on some of my points.
For the record, my mini-bio is listed on the City of Dover Website, under Government, Biographies of the Mayor and the City Council. My vision on housing starts with my professional career as a newsman, who, at age 87, is now serving his 3rd term as a City Councilman.
As an elected official, who purchased a customized Marlet built home on leased land, with a promise of Country Club living in my semi-retirement at age 70, I discovered too late, the folly of my purchase of a quality MH home on leased land. Under Delaware law, my ground rents were nothing like the ground rents of my parents’ 2 homes in Baltimore. I became an Advocate in 2004.
- What we know: Housing is essential to our economy and affordable housing for low income families and seniors, including retired military is in short supply. The higher the cost of housing, the more pressure on the minimum wage. The homeless population represents a different conundrum not close to being solved.
- The Housing Shortage has driven up the cost of housing and has put pressure on the minimum wage.
- State Laws fail to protect leased land home owners permitting private equity giants to gouge leased land tenants. As a result, even in States which permit home owners to purchase their communities, home owners can not out bid the big corporations.
- Blatant Rent Increases: Without competitive or legal restraint, corporations raise rents far in excess of inflation. RHP purchased my upscale 55 Plus Wild Meadows community in late October 2017 and raised rents 8% in 2018, 4% each in 2019, 2020, & 2021, from $500 in 2017 to $630 per month in 2021. That money leaves the Delaware economy and enters the pockets of investors who do not pay Delaware Taxes.
- Trailer Park Warehousing Mentality: Large and larger leased land community owners treat their clientele as ATM Machines. In my upscale community, RHP advertises: “Bad Credit? No Problem.” Problems on my wetland surrounding the community may take 2 years and go through 3 or 4 layers of management for the approval of the expenditure to fix the problem. In 2014 and 2019, Dover City Code Inspectors forced the former and current owner to fix the recurring drainage problems.
- No Mortgages: RHP advertises Chattel Loans at 8% plus the 4 % compounded year lot rent increase. There are no programs to train new leased land home buyers on the purchase and financial management of the home as Habitat requires of their clients. I seldom miss a Habitat new home event.
How Fannie Mae, Freddy Mac, and HUD Can Make Real Progress in Housing: By Congressional action, Presidential Order, or Rule
- Any money lent should have a limit on the amount rents can increase each year.
- When the Apartment House or Leased Land Community is sold, priority should go to Tenant occupants but professionally managed ,in a not for profit Condo Association, or a not for profit corporation to preserve affordable housing. This creates a professional cadre for housing.
- Require or encourage States to create a Public Service Commission for any apartment or leased land housing community that has been previously funded or funded in the future with any Fannie Mae, Fredie Mac, or HUD Loans. Guarantee a percentages of profit over cost, and make the community owners show their financials.
- FHFA should supply the funds via grants to State agencies or on-profits such as United Way agencies to educate tenant renters on handling their finances.
- FHFA should set up a revolving fund with a service fee for financial institutions to handle below Chattel loan rates for leased land home buyers. I would suggest at least 2% less than Market Rate for Chattel loan or 2% above Mortgage Rates, but I would leave that discussion to financial experts.
Dover City Council
Additional Information, more MHProNews Analysis and Commentary
Neil was responding to this message below, sent by email on July 11, 2021 at 5:42 AM. The quote symbol was not in the original.
As a few of you know, I’ve been working on this DTS and manufactured home financing report. The deadline for comments to FHFA is before midnight on July 17, 2021 per the source at FHFA cited in the article.
For whatever reasons, I’ve not seen any serious comments yet by a manufactured home consumer advocate. Almost everything, and there is not much, is from MHI affiliates. Nor have I seen any comments from an obvious manufactured home owners, save perhaps one. That means that this could be a good time for you to sound off if you are serious about getting lower rates on manufactured home loans, or other reforms on DTS and how it is being (mis)used to finance land-lease manufactured home communities rather than single family homes.
As some of you have learned, we go into depth on these issues reports. Some do not like the details. I get that. I could just quote Danny Glover and those who say that the capital access and information sources are rigged. But that doesn’t mean much to someone who wants details. Yes, some may have to slow down or read it twice. But there will be plenty of meat to dig into.
Phil, I don’t recall if I’ve sent you a copy of our emails before. An example of that is below. Ben, I will suggest if you want to stay tapped into these issues, you should look and sign up for those (free) too. It saves me time, which is in short supply. People in Washington, D.C. in the federal government follow this (we’ve got clear evidence of that), the fine folks we write about follow this too. So, there must be a reason that friends and foes find it useful reading.
Kevin, Liz, and Dave,
I’m surprised that there is nothing from you yet on this looming manufactured home finance DTS topic. I think you know that in my view you are posturing support for residents, but are de facto helping the consolidators. While I find your research often useful, your conclusions are arguably weak. But I’m hereby giving you another chance to prove me wrong. Why not submit federal comments that make it clear that you are not in the pocket of Buffett and his ilk? Why not insist to your readers that they too tell FHFA that DTS should be fully and properly implemented? Why not challenge Clayton and their lenders publicly and directly?
Ishbel, you too.
I think you started something useful on American Banker that we referenced in that report linked above. But IMHO, you should have followed up. Here is your chance to prove the same by taking up the challenge. Finish what you started to expose about the monopolization of manufactured housing by dominance in financing. Why not do it in a strong comments letter that makes it clear that dark money funding from sources linked to Buffett do not influence you?
Feedback from whomever, welcome.
## Note: footer, signature lines, forwards omitted after “Tony,” but otherwise as sent. ##
Beyond the 10 people whose first name was used in that message, there were 8 additional BCCs. All but Phil are known to be manufactured home residents among the first five named above. Kevin, Liz, and Dave, Ishbel, and Doug were named and are all current or prior self-described ‘manufactured home advocates.’ Among the other 8, two are manufactured home advocates, who may be residents too. One is a Manufactured Housing Institute (MHI) related attorney. One is a manufactured home retailer. The balance were professionals in the land-lease community sector. Only the attorney had a direct manufactured home professional trade association connection, but others are known to have membership ties to a trade group.
DTS RFI INPUT: PROPOSED 2022-2024 UNDERSERVED MARKETS PLAN
Why does this matter? Several reasons. In no specific order of importance:
- One of the most common complaints heard from consumers are about the higher chattel or personal property/home only loan rates on manufactured home lending. MHProNews and MHLivingNews have examined that from a range of technical angles previously. In brief, smaller dollar housing loans cost a similar amount, say industry lenders, to originate as other single family housing loans cost. Additionally, in any scenario – such as a home on private property where the ground can’t be sold with a possible repossession – there are significant costs to moving a home that are not encountered with conventional housing. There are other factors too, but for brevity those examples illustrate why some additional charges/rate difference is warranted.
- That said, per industry lenders to MHProNews, personal property or “chattel” loans could be lower in cost if the secondary market could be accessed. Besides non-Berkshire Hathaway owned lenders making that statement, so too has Kevin Clayton, President and CEO of Clayton Homes. Clayton and their affiliated lenders – 21st Mortgage Corporation and Vanderbilt Mortgage and Finance – are all owned by Chairman Warren Buffett led and publicly traded Berkshire Hathaway (BRK).
- As noted in the email to Fred Neil and others, there have been an apparent net 11 (12 total, but 2 were apparent duplicates) comments posted on the FHFA site as of 6:26 AM ET on 7.12.2021.
- There are few if any comments so far posted from consumers. That is a stunning miss. Indeed, the low volume of comments so far reflects a problem in the FHFA Request for Information (RFI) process.
- Additionally, the bulk of the comments from people who identify their professional ties, most are MHI member affiliates. They have each tweaked and ‘personalized’ what amounts to a form letter, which suggests that MHI made that available to their state associations. That has several implications, which will be examined another time. But for now, the How Gold Rules report – based on input from MHI affiliated state executives – is worth mentioning.
On the one hand, it is entirely understandable that after years of posturing, that retailers, community operators, producers, suppliers or lenders – to name but a few categories from the professional side of the industry – would feel little reason to take the time to sound off. After 13 years, and in some ways worse than no results, what will change with new comments? What can be said that has not been said before? The letters from those MHI state affiliates – if compared to others from the past – looks pretty similar. FHFA and the Government Sponsored Enterprises (GSEs or Enterprises) of Fannie Mae and Freddie Mac have not listened. More on that further below.
One prior report that featured Fred Neil, both a resident and a volunteer advocate for manufactured home residents, is linked below.
Consumers and Consumer Advocacy
There are absolutely comments that have been made by professional consumer advocates, that routinely work for some nonprofit, that have been insightful. MHProNews and MHLivingNews have reported on those numerous times. An example is linked below.
MHProNews has directly addressed Kevin Borden and Liz Voigt, both with MHAction, as we have previously reported. Color of Change, as well as MHAction were both asked similar questions.
On June 1, 2021 they were asked to respond and/or react to two things. The follow numbered inquiry:
1) To what extent does the NoVo Foundation or others you get donations from set stipulations on your reports? As you may know, the NoVo Foundation is mainly funded by Warren Buffett, which makes it appear as if Color of Change [and MHAction] is getting dark money from an organization that it is also critiquing.
And if they had could identify any factual errors or problems with the analysis in the report linked below.
MHProNews has previously reported on tips from within the Manufactured Housing Institute (MHI). Among those are well documented claims that Lesli Gooch has a serious conflict of interest. An example of one of those reports – including examples of those documents provided as tips to MHProNews – is linked below.
Additionally, MHI has openly touted its alliance with nonprofits in the housing sector that are obvious competitors of manufactured housing. That MHI alliance with competitors defies pro-manufactured home industry growth logic. As relevant, that self-proclaimed alliance has failed to produce any measurable benefit to manufactured housing. Who says? Oddly, MHI CEO Gooch has admitted that neither DTS nor advancement on the enforcement of “enhanced preemption” under the Manufactured Housing Improvement Act of 2000 has occurred.
Furthermore, Kevin Clayton has made similar comments – which are de facto admissions that then or now – MHI has utterly failed in its own self-proclaimed goals.
Not to be missed, Clayton admitted that the failures have cost the industry thousands of retailers. While the evidence-based argument can be made that Kevin understated the numbers of retailers lost, 7,500 individual American Dreams lost is significant. That it occurred during an affordable housing crisis is a sobering testimony to just how pathetic and corrupt MHI is.
Pathetic? Oxford Languages supplies this as part of their definition for pathetic: “miserably inadequate; of very low standard.” What could be a lower standard than an inability to accomplish the enforcement of two existing pro-manufactured housing laws? The evidence is ironically supplied by MHI’s Gooch and Clayton CEO Kevin Clayton, as the quotes above reflect.
Another definition of pathetic, per Oxford Languages is this: “arousing pity, especially through vulnerability or sadness.” On a spiritual level, MHI and Clayton arouse “pity” and “sadness.” Preying on the trust and vulnerabilities of others is about as low as it gets, isn’t it? Yet Clayton and MHI member Andy Gedo each have praised the Buffett moat methods that are designed to wipe out competitors.
The comments from White House Resident Joe Biden, properly understood, are revealing. See that linked below.
It should be noted that, per sources, MHI and the Manufactured Housing Association for Regulatory Reform (MHARR) are each planning their own submission. While MHProNews has not seen either’s draft, it is all but guaranteed that MHI will play more suck up and posturing, while MHARR is likely to rip FHFA and the GSEs. Time will tell.
Back to the consumer advocates. We will soon know what those paid advocates have to say, if anything. The challenge by MHLivingNews to them and others is part of the detail-packed report linked below.
Summing Up and Conclusion
There is a massive amount of corruption in Washington, D.C. Who says? Voices that span the left-right divide. A forward from Matt Stoller, author of Goliath, said the following.
Now, the biggest question with this executive order is not whether it’s a good idea, but whether Joe Biden can actually follow through on it. And there are multiple layers to this question. The first is something that makes liberals uncomfortable, which is that the stereotype of government bureaucrats is often true. Government staffers are deeply hostile to change. The deep state, in other words, is real.”
While the argument can be made that Stoller is being whimsical at best if he thinks that Biden seriously wants to do what he has articulated, but Biden’s remarks and Stoller’s are noteworthy. It is quite so that the “deep state is real.” While it has not always been known by that description, the reason that “liberals” are uncomfortable is because in Washington, D.C. it is an obviously Democratic town. When someone runs for president, the Democrat will get around 90 percent of the vote. Why did President Trump succeed on several things, but failed to advance antitrust or investigations of certain Democrats as much as he would have liked? One logical answer is that Democrats who routinely are the majority who staffed those offices ‘resisted.’ It is worth noting that historians point out that Democratic President John F. Kennedy used ‘backchannels’ at times instead of ‘his own State Department’ is because President Kennedy did not trust his State Department in all matters. Ouch, but there it is.
Stoller made a fascinating, and apt reference to Bork and the Chicago School. “But far more important was Biden’s explicit criticism of the Chicago School, by name. “Forty years ago we chose the wrong path,” said Biden. “Following the misguided philosophy of people like Robert Bork, we pulled back on enforcing laws to promote competition. We are now forty years into the experiment of letting giant corporations accumulate more and more power.””
While Stoller may be questioned on his hope that Biden is sincere – hardly likely, considering his backers are the very people that he now claims to be reigning in – Matt is nevertheless correct in saying that the Bork school opened the door to the change in antitrust policy in the U.S. MHProNews has reported on that in the report linked below.
Wikipedia is demonstrably errant in calling Hitler’s National Social Party as ‘right wing’ (duh, they were socialists and by definition, from the left. What made national socialism different in Germany was that it was ‘national’ vs. international socialism, as was being promoted by the Soviet Union.). That said, Wikipedia is correct in saying that: “Scholars also noted that big business developed an increasingly close partnership with the Italian Fascist and German fascist governments.” As Joel Kotkin noted, that pattern held for fascists in Japan too.
Ronald Reagan should have used a more precise terminology, but he too noted that fascism and the left in the U.S. were closely allied intellectually. The reason should be obvious, but a useful description is this from the late President Franklin Delano Roosevelt’s (D) Vice President, Henry A. Wallace.
“The really dangerous American fascist… is the man who wants to do in the United States in an American way what Hitler did in Germany in a Prussian way. The American fascist would prefer not to use violence. His method is to poison the channels of public information. With a fascist the problem is never how best to present the truth to the public but how best to use the news to deceive the public into giving the fascist and his group more money or more power… They claim to be super-patriots, but they would destroy every liberty guaranteed by the Constitution. They demand free enterprise, but are the spokesmen for monopoly and vested interest. Their final objective, toward which all their deceit is directed, is to capture political power so that, using the power of the state and the power of the market simultaneously, they may keep the common man in eternal subjection.
~quoted in the New York Times, April 9, 1944”
― Henry A. Wallace
Henry A. Wallace, says Goodreads which provided the quote above, was born in Orient, Iowa on October 07, 1888. He died in November 18, 1965. “Henry Agard Wallace was the 33rd Vice President of the United States (1941–45), the Secretary of Agriculture (1933–40), and the Secretary of Commerce (1945–46).” Left-leaning Wikipedia says Wallace was a Democrat. As noted, Wallace served Democratic President Franklin Delano Roosevelt.
Our nation and our industry are seeing late-stage fascism at work. Voices such as Glenn Greenwald and Robert F. Kennedy Jr. – both Democratic backers – have aired similar warnings.
So too have voices on the right.
That may seem far afield from DTS. But the corruption of the DTS process is precisely accomplished by the corruption of the political process in the U.S.
What to do?
- First, those harmed by this process must call it out loudly and repeatedly. Doing so once is not enough, because the media-driven propaganda – see Wallace’s comment above – is ongoing.
- Part of that process should be reasonable voices posting comments on the FHFA website. Yes, only a few have done it, and too few will head this call. But for anyone that wants to do more than cry in their beer or whine hoping for cheese, there is no substitute for speaking out publicly. Yes, some are fearful. But thank God MHProNews is living proof that someone can speak out and stay standing up to these same corrupt forces years later.
- There is no safety in silence. The experience of Nazi Germany is that the silent lost their rights. It is Naomi Wolf and others among Democrats who are now saying that the Democratic party leadership has lurched left in a dangerous manner.
MHProNews recommends these steps.
- Post comments to the FHFA website. Per the FHFA to MHProNews, you can use the link here to upload comments before midnight July 17, 2021. You can type them directly on to their website or fill in your contact info and upload a WORD or PDF document.
- Then, follow up with elected officials. In one sense, it does not matter if those officials are Democrats or Republicans. Let them know you want DTS fully and swiftly enforced by providing access to the secondary market for manufactured home chattel (personal property, home only) lending.
- No less important, is to decry the misuse of DTS, as Neil and others have noted. Financing communities that are affordable to turn them into communities that are no affordable is an abomination.
- Calling out the blatantly failed in the marketplace and arguably corrupt Clayton-backed and MHI branded CrossModTM and MHAdvantage® and CHOICEhome® products is another perversion of DTS. Is it any surprise that the meeting minutes between key MHI players, Fannie Mae, and Freddie Mac have never been disclosed? Are thinking people seriously going to believe that Fannie and Freddie each developed a similar product entirely independently of each other? Thinking that occurred is to enter tooth fairy land.
MHProNews plans to submit comments prior to the deadline. You should do it too. Keep it as simple or technical as you’d like, but write with the knowledge that others will be reading it. Make it something you would be happy to point back to a month or a year from now.
The good news is that if Biden-Harris are starting to talk about antitrust action, it means that the heat is on. Just keep in mind that the nature of paltering – as arguably exemplified by Gooch and Kevin Clayton – is to mix the truth with deception. Paltering works on many precisely because it is a stealthy way to deceive by telling parts of the truth. ##
“Dare to be a person of faith (cf. Hab 2:4; Heb 10:38).”
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By L.A. “Tony” Kovach – for MHProNews.com.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing.
For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.
This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.
Connect on LinkedIn: http://www.linkedin.com/in/latonykovach
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