Industry Voices By Savvy Insightful Passionate MH Professional

Industry Voices By Savvy Insightful Passionate MH Professional

vacancy-problem-mhc-md-

If you don’t go forward, you’re not going to go anywhere

Marty, thanks for your writing.  You are going where no one wants to go, but should.

I (the bank) have been a manufactured housing lender since 1991.  Not a large one, but neither is the bank I work for (Oxford Bank).  I rarely participate or respond to anyone or anything via the internet; however, Marty Lavin’s commentary interested me.  [See The Train To Oblivion, May 16th.]

Mr. Lavin has identified the brutal facts, but not how to fix them.  Further yet, does anybody really want to fix them?  Everybody  seems to have beaten up and worn down.

I have outlived the Greentrees, Consecos and others that felt booking loans at high rates, extended terms, big fees and huge  volumes was the thing to do.

I am still lending but, only to parks that want to “partner” with us.  Everyone hates bankers right now; hopefully, what I have to say doesn’t make it worse.

Below are a few comments and a few things I have learned in my 20+ years of MH lending.  I am probably getting off the path somewhat, but Marty opened the door for some comments from the lenders side:

  • Rates, of course, are higher than an auto loan.  When you loan money for 20 years at a fixed rate for anything, the bank must protect itself for future increases.
  • Anyone who thinks that the bank makes a huge spread on these loans is just plain ignorant.
  • The park owners control the bank’s destiny, losses and expenses.
    Today’s rates are controlled by losses and expenses, not just cost of funds.
  • Bank regulators do not like MH loans or “Trailers” as they say.
  • A manufactured home is considered personal property and sometimes it’s considered real estate.  If someone wants to hang you – it’s real estate.
  • I believe the parks that do their own financing are building a monster.  Let’s hope they retain a large reserve for losses, understand fair housing and Federal and State compliance laws.  I think they should let the bank be the bank.
    Servicing is expensive; it just increased again with the escrow law.
  • Generally, most parks will sell their own inventory over the bank’s repos, even if the bank pays for advertising.  They will switch the buyer to their home.
  • A big part of the banks’ losses are the parks’ profits.
  • Greentree and some other mega lenders were foolish; high rates and big loan fees do not make good loans.  Worse yet, they would finance the fees.
  • It’s the park’s customer until it becomes a repo; then it becomes the bank’s customer.
  • Some parks must feel that the bank guarantees the lot rent since it financed the home.
  • Many park owners are not active enough in their parks and put an underpaid and inexperienced employee in the park manager’s seat.
  • Unfortunately, these things don’t have motors.  Lenders are totally reliant on the parks for help.  With values in the tank, it’s hard to justify moving them.
  • There are still some crooks in this industry: fake down payments, home options that are not really there and straw purchases are still around.
  • The FDIC deems anyone with a credit score of 660 and under a subprime borrower.  This gives the appearance that my portfolio is subprime.
  • Manufactured home loan brokers are very dangerous.

The industry needs to go forward, not backwards.

Find a lender and “partner” with him or her.  Help the bank when they have a repo by assisting them in controlling the loss.  The
bank is paying the park a commission to sell the home; maybe they could even mow the yard for free?  Maybe they could use their maintenance guy to perform cosmetic repairs at cost?  In return, they could benefit from offering financing at reasonable rates and quality delivery.  This isn’t hard stuff.

My bank is still in the business of financing homes, but only for a handful of parks.  These are the parks that have “partnered” with us to get the job done.  Both the parks and the bank are much better off.

My biggest problems at present stem from loans made years ago in park(s) that have been sold to a REIT, portfolio operator or out-of-state investor.  The buyers of these parks figured out that they overpaid and are now increasing lot rents to compensate for their mistake.  This is creating unnecessary repos and they could care less.  # #

Al Cole
Oxford-Bank.com
alcole@oxford-bank.com

MartinMartyLavinJD-PhotoQuoteDidAnExpertWitnessAssignmentInIndiandaNotImpressedManufacturedHomeCommunityResidentsTreatmentYesCostsMoneyToBePoor

Marty Lavin, J.D., Weighs in on Resident Complaints of Predatory Behavior by Manufactured Home Community Consolidators

Tony, I am not familiar with this situation, other than as the news account details. On the one hand I know from personal experience that …

Read More →
KarlRaddeQuoteSouthernComfortHomesByranTX-rePendingPlanBanMobileManufacturedHomes

Karl Radde – TMHA, MHI, Southern Comfort Homes – Addressing Bryan City Leaders, Letter on Proposed Manufactured Home Ban

To All Concerned [Bryan City Officials, Others]: As the retail location referenced by Mr. Inderman, I would like to take a moment to address the …

Read More →
EdwardAsk-EddieHicksIndustryVoicesManufacturedHousingMHProNews-1

MHC Pro Eddie Hicks, Federal Stalemate, and the 28th Amendment Solution

If you, like me, are somewhat totally perplexed by the apparent “stalemate” our duly elected members of Congress are in, perhaps it’s because in recent …

Read More →
TrailerParkBoysCommentaryAlKempExecutiveDirectorManufacturedHomeParkOwners-AllianceBritishColumbiaDailyBusienssNewsMHProNews-2

“Trailer Park Boys” Al Kemp, Canadian Manufactured Home Community Association, Reacts to Netflix Series

Hi Tony, The short answer is that – at least in Canada – “trailer park” connotes exactly the type of persons portrayed in Trailer Park …

Read More →
TimConnorCSPManufacturedHousingIndustryDailyBusinessNewsMHProNews-2

Social Media, Mass Emails vs. the Personal Touch? Field Testing Business Development Methodologies

As someone who has been selling my services globally for over forty years, I recently decided to dramatically reduce using technology, social media and mass …

Read More →

The Importance for Businesses and Investors in Manufactured Housing for Selecting the Next Supreme Court Justice

Predictability in law is the key to a prosperous Republic. Laws must be interpreted based on the language in them first and foremost. Only, when …

Read More →
FreeTradeOrEconomicWarMartyLavin475-AA

Free Trade or Economic War?

Anyone going to school in the U.S. after WW II has learned the breakdown in world trade was a primary, though not only, cause of …

Read More →
RealEstatePersonnelCanSellMHCASusanBrentonManufacturedHousingIndustryVoicesDailyBusinessNewsMHProNews

Law Allows Real Estate Personnel to Sell Homes in Your Manufactured Home Community

Real estate personnel are now allowed to sell homes in manufactured and mobile home parks without first having to be licensed as a broker under …

Read More →
RevDonaldTyeJr-ManufacturedHousingAdvocateQuickestWayWealthIndustryVoicesMHProNews550

Manufactured Homes – Access & Equity – a Key Cure for America’s Housing Shortages, Wealth-Building Says Activist Donald Tye, Jr.

Manufactured housing could cure most of the ills we have in this country as it pertains to the housing shortage. Why then is it not …

Read More →
MHCommunitiesOfAZNealTHaneyPresidentWhyTheyQuitManufacturedHousingInstituteMHIDailyBusinessNewsMHProNews

State Association Quits Membership in Manufactured Housing Institute (MHI), Explains in Writing, Why?

The manufactured housing industry has long been a mainstay of affordable housing in the United States.  For decades the industry has provided an unmatched quality …

Read More →
GusRodriguezTejasHomesConroeTXIndustryVoicesDailyBusinessNewsMHProNews

“No Greater Resource” in Manufactured Housing Industry

Dear Tony and Soheyla, Thank you for your great reporting on our industry and the challenges we face as independent retailers. There is no greater …

Read More →
EconomicRacismIlGenAssemblyRevDonTyeJr-JDHarperArkp-ManufacturedHousingAssoc-IndustryVoicesMHProNews-2

McCrory Lawsuit – “Significant Victory Against Zoning Discrimination” – Manufactured Homes

The McCrory lawsuit is a significant victory against zoning discrimination that many working families in Arkansas face from cities and towns when they attempt to …

Read More →
Scroll to Top