HUD-MHARR Meeting – SAFE Act Legislation Introduced

I. MHARR OFFICIALS MEET NEW HUD PROGRAM MANAGEMENT

MHARR officials, including members of the association’s Executive Committee and staff, met on May 24, 2010 with HUD Associate Deputy Assistant Secretary Teresa Payne, recently appointed the new manager of the HUD manufactured housing program.

Given the fact that manufactured housing finance issues are scheduled to be addressed in detail at a June 2, 2010 roundtable meeting in Elkhart, Indiana, being jointly hosted by Congressman Joe Donnelly (D-IN) and Federal Housing Commissioner David Stevens — a meeting that MHARR will attend and participate in — this first MHARR meeting with the new program leadership focused specifically on issues related to the Title VI manufactured housing program. However, considering the chaos, confusion and damage that have resulted from the mismanagement of the federal program in recent years, close, open and direct communication with the new program management will be essential to reverse this trend and put the federal program back on the right track.

Based on these considerations, and in light of recent program actions and decisions, MHARR outlined and prioritized for discussion the most important and pressing Title VI-related issues that need to be addressed and resolved (see, list attached). To advance this discussion and subsequent communications regarding these vital issues, MHARR provided Ms. Payne with a package of relevant background materials that thoroughly address the policy matters that have taken the federal program off-course. In addition, MHARR provided an industry perspective on the background, development and important details of the 2000 reform law.

At the outset, MHARR asked Ms. Payne about her initial impression of HUD Code manufactured housing, based on her recent tour of HUD Code homes exhibited at the Great Southwest Home Show in Tulsa, Oklahoma. Ms. Payne stated that her first impression of the industry’s homes was very positive. MHARR officials expressed their appreciation, but pointed out that this positive image and positive impression of manufactured housing does not appear to have been shared within the program in the past, as illustrated by these pending and pressing issues. Thus, at a time when the industry is building its best homes at a price that remains affordable for American families, the industry, and manufacturers in particular, are faced with growing and expanding diversions from the federal program that undermine affordability without providing corresponding benefits for consumers.

Indeed, as the MHARR officials advised Ms. Payne, this concern is even more acute and important now, when manufacturers are beginning to see the first signs of a gradual turn-around in the market decline that has been in place since 1998. And, as the first small signs of a recovery begin to appear, extensive MHARR communications with manufacturers indicate that this turn-around is based mostly on consumers qualifying for financing to purchase the industry’s most affordable homes. As a result, manufacturers are extremely sensitive to ensure that the cost of the industry’s homes — and most particularly its most affordable models — are not increased unnecessarily by unwarranted diversions from the federal law that comprehensively regulates the industry and ultimately determines the cost of the industry’s homes to potential home buyers. Such unwarranted diversions do little or nothing to benefit consumers while excluding more consumers from qualifying for available financing — with a disproportionately negative impact on lower and moderate income consumers.

The MHARR officials indicated that the association looks forward to working with the new program management to properly address and resolve the pending issues confronting the program, the industry, consumers and all other stakeholders. They suggested that Ms. Payne take the opportunity to review the package of materials provided by MHARR, and that MHARR would follow-up with further communications and activities to take the initial steps toward resolving these and other relevant issues.

The meeting with the new program management thus provided an opportunity for a productive discussion on key pending issues for both the program and the industry.

MHARR will continue to keep you apprised of relevant developments.

II. SAFE ACT EXEMPTION BILL INTRODUCED IN CONGRESS

On May 24, 2010, Congressman Joe Donnelly (D-IN) introduced a bill — H.R. 5369 — (see, below) that would create an exemption to the SAFE Act for most “manufactured or modular housing retail sales activities.” Specifically, the bill, co-sponsored by Congressman Bill Posey (R-FL), would exclude from the Act’s definition of a “loan originator,” persons performing routine sales activities, including “bringing together” parties interested in the sale purchase, lease or rental of a manufactured or modular home, “negotiating” such an agreement, or signing or closing a retail installment contract on behalf of a retail seller of manufactured or modular homes.

As MHARR has previously indicated, the association supports this exemption and will work to advance its adoption and enactment into law.

cc: Other Interested HUD Code Manufacturers and Retailers

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


PENDING ISSUES FOR DISCUSSION AND FOLLOW-UP

ROLE, AUTHORITY, FUNCTIONALITY AND INDEPENDENCE OF MHCC

  • MHCC as contrasted with FACA advisory committees
  • Non-compliance with section 602 (b)(6), 604(a) and (b) of 2000 reform law
  • Attempt to eliminate 604(b)(6) by “Interpretive Rule”
  • Composition of MHCC and collective representation
  • Revision of bylaws/HUD control over subcommittees, agenda, priorities
  • Participation by non-members

IN-PLANT ENFORCEMENT CHANGES (PIA Rule)

  • Necessity and cost
  • Supporting regulations rejected by MHCC
  • SOP and “enhanced checklists” not presented to MHCC – rulemaking required
  • Misleading and conflicting “voluntary” versus “compulsory” “guidance”
  • Entire process requires rulemaking

IMPLEMENTATION OF ENHANCED PREEMPTION

  • Reasons for — and scope of — enhanced preemption

IMPORTANCE OF AND THE NEED FOR NEW PROGRAM CONTRACTOR

ENERGY STANDARD (DEPARTMENT OF ENERGY)

  • HUD role and involvement
  • Timing and impact on consumers
  • HUD position(s) regarding cost, collateral effects

TIMELY UPDATES OF STANDARDS SUBMITTED BY THE MHCC

SAFE ACT AND FHA FOUNDATION/INSTALLATION RULE

OTHER ISSUES

HUD-MHARR meeting
May 24, 2010

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