Some weeks ago, MHProNews teased in an article that MHI ought to attempt to meet with the Consumer Financial Protection Bureau (CFPB).
Given the new leadership under pro-business, and less-activist acting director Mick Mulvaney, such a meeting could prove useful to the industry’s lenders, and all those who used to lend, and would like to loan money again.
Another News Tip…
More recently, the Daily Business News has been told by member sources that MHI planned to meet with the CFPB about Dodd-Frank related regulations that have harmed manufactured housing new homes and preowned sales.
If that claim is so, then what a federal official at the CFPB told MHProNews, may prove to be insightful.
As of February 13, 10:11 AM ET, a source at the Consumer Financial Protection Bureau advised The Daily Business News that they found:
- no evidence of a meeting held or planned between acting Director Mick Mulvaney, the Manufactured Housing Institute (MHI), or companies in the manufactured housing industry.
There are many possibilities as to what that means.
But if it is true that MHI has made such a claim to members, that CFPB source cited evidence that such a meeting has not happened, nor is it yet scheduled.
Indeed, such a meeting might be useful, if MHI and Berkshire Hathaway companies – such as Clayton Homes, Vanderbilt Mortgage & Finance (VMF), 21st Mortgage Corp – and others beyond Berkshire brands, could get the Trump Administration to change-by-agreement what they’ve been pursuing via the millions of dollars spent chasing the Preserving Access to Manufactured Housing Act for over half-a-decade.
Is an outreach by MHI actually underway?
If not, why not?
And if there is a claim for a meeting in motion, then where is the evidence?
The CFPB official’s words to MHProNews leave many questions unanswered. But the topic ought to be of keen interest to thousands of professionals, from coast-to-coast, who are still struggling under the financing burdens imposed by this Obama era regulatory restraint, which had its origins during the end of the Bush Administration.
The MHI/Berkshire Way?
A decade has past since the SAFE Act become law.
Over 7 years have elapsed since Dodd-Frank was passed. And there has been a series of missed opportunities on mitigating onerous regulations that have made purchasing or selling a manufactured home harder. Who says? A former MHI chairman (see below). The parting words of a prior MHI president – who ended his career during the Clayton era – also bear scrutiny, see that linked here.
MHI and many industry members agree on paper that Dodd-Frank has led to the drop in value of the lowest cost manufactured homes, most notably those under $20,000 in potential loan size, but according to MHI, the impact is felt up to $75,000.
Renters’ Nation: The Dark Side of Dodd-Frank and Its Impact on Affordable Housing – manufacturedhomelivingnews.com
New Federal regulations, enacted in the wake of the subprime mortgage crisis, are playing a key role in establishing a class of lifetime renters – all in the name of consumer protection. By Jan Hollingsworth for MHLivingNews.com The old man walked into the dealership in rural Kentucky with solid credit and the air of someone who knew exactly what he wanted.
That impact – caused by an artificial, and unjustified regulatory burden – has cost the manufactured home industry untold numbers of new home sales as well.
MHProNews’ – via a tip from a reader – documented that Dodd-Frank was never supposed to apply to manufactured housing in the first place. The letter from Barney Frank, linked here, was read into the Congressional record.
As noted, CFPB regulations hurts resale values, which harms millions of lower cost pre-HUD Code mobile home owners, and the owners of older, lower cost manufactured homes too. The Renters’ Nation story, linked above, outlines specific cases of how real people have been harmed and impacted.
Yet none of that was apparently noteworthy to the Urban Institute, which failed to mention the harm caused by Dodd-Frank and CFPB regulations among the causes for lower sales, or lower resale values.
MHProNews most recent report on the controversial Urban Instituto report on manufactured housing, is linked below.
In this specific CFPB connected analysis, the Daily Business News reminds MH Industry leaders and investors that MHI not only failed to mitigate Dodd-Frank, or the impacts from the SAFE Act, but that prior MHI Chairman Nathan Smith freely admitted to it. Note in the same video, Smith jests that the woes of the industry allow some like him to acquire manufactured home communities, that he wants “all” for himself. Isn’t that in keeping with the association tip reported yesterday and the day before on the Daily Business News?
MHI tells their members that they understand that heavy regulations are harmful, particularly to smaller businesses. But words are cheap, and as MHI award winning Marty Lavin said, pay more attention to what people do than what they say.
Years of failures, and the broken promise in 2015 by MHI CEO Richard Jennison in Louisville that Preserving Access would be passed into law, can’t be forgotten. Such failures by MHI led two state associations to quit MHI last year, as was reported below.
Those states aren’t one-off examples. Two well known MHI professionals below are among the perspectives of those who believe the industry’s national association ought to have done better, just as prior MHI chairman Smith himself admitted.
“Command and Control”
State associations are widely seen as doing a better job than MHI at avoiding, mitigating or rolling back harmful legislation.
More recently, multiple state associations have told MHProNews in private discussions or messages, about the ways that MHI now ‘dictates’ to states. Additional confirmation came for the article linked below, since it was published.
Also on the radar for the independents of the industry, and for industry watchers, must be the following.
Why is it that most state associations can’t buck MHI?
Per state association sources to MHProNews, there are a number of states where 50 to 70 percent of the floor dues revenue now flow directly or indirectly through Clayton retailers, and producers. Not to be forgotten, of course, is the power over the industry of Berkshire Hathaway lenders. See the links above and below for quotes, insights, and more details.
Note, that many of the issues noted herein completely or largely escaped the undisclosed Berkshire Hathaway connected Urban Institute report on manufactured housing. Convenient?
Those state association execs don’t need a formal ‘gag order’ – they know where their bread is buttered.
When Lesli Gooch or others at MHI ask for something, there is not much chance that a state association today would say ‘no.’
Widening the Buffett-Berkshire-Clayton Moat
It’s arguably the Warren Buffett “Moat Principle” at work in Manufactured Housing.
Kevin Clayton explained it several ways in the video below, with added related details found in the linked articles. It must be important, because Kevin raised the subject numerous times throughout the video. That and beating the competition are among the few things that “Warren” preaches to his CEOs, so said Kevin.
The heart of the Urban Institute question was a good one. But its execution that was arguably flawed, and as sources at UI told MHProNews, had undisclosed influence from MHI and Berkshire Hathaway owned companies.
That aside, the UI question remains. Why has manufactured housing failed to soar? Why did UI not cite Harvard’s Eric Belsky prediction that manufactured housing would surpass conventional home building, in spite of repossessions, and lending woes?
How the Buffett Moat Works…
Is it primarily because Berkshire Hathaway has used:
- access to capital,
- allowed negative media or third party research to go largely unanswered,
- and allowed regulatory forces to work to their advantage?
All of which had the net result of driving thousands out independent retailers, communities and producers to sell out for less, or be forced out of business?
Why did so little of these facts and documented concerns make the Urban Institute report?
Mr. Buffett freely admits he:
- doesn’t believe most read enough,
- nor will most fight the chains of habit,
- nor study history.
All of these are demonstrably used in Buffett’s favor, as Kevin Clayton explained in his own words in the video posted above.
Back to CFPB and that Alleged MHI Meeting…
In fairness to MHI and Berkshire Hathaway, perhaps a meeting with someone lower in the hierarchy at CFPB has taken place. One that our source would be unaware of – but the other side of that coin is still – why has nothing been scheduled with the acting CFPB director?
So the various concerns, allegations, and evidence of problematic behavior stand. MHI and BH companies have been repeatedly invited to respond via email, or discuss via video for the industry to see, these and other issues.
There can in the final analysis be only one logical reason for MHI and Berkshire Hathaway to avoid commenting to this trade publication, which they praised in prior years.
First, the readers digest version, then the details. Last week, the WVHI sent out their newsletter with a column apparently written by their co-president, George Gunnell. Gunnell is an RVP for Clayton Homes. That article and others in the same newsletter indicated that MHI wanted Pam Danner ousted from her role at HUD.
They arguably have something to hide. That is also at the heart of the Tennessee MHA controversy, linked below, or the similar WVMHI controversy linked above.
The Truth is Hiding in Plain Sight
Many of the normal sources for the truth in our industry – such as state associations – have been de facto muzzled.
States associations routinely recycle to their members whatever MHI tells them. One association executive has expressed concerns that at some point, the state associations as they exist today will become moot to MHI and those who dominate MHI.
MHARR, MHProNews – along with several voices quietly feeding insights – are the de facto resistance to an apparent effort that Buffett and Clayton’s own words to totally dominate an industry that they already largely control.
That is NOT to disparage the state associations. Quite the contrary. Many state associations are run by caring, committed professionals who wish that circumstances were different than they are. Among those, are valuable sources for insights to MHProNews.
When more than one state association directors admit to MHProNews that they are afraid of MHI, and Berkshire Hathaway brands, something is clearly wrong.
So if state association executives’ like their jobs, particularly if they are approaching retirement, what choice – say some – do they have?
That is the reality that HUD, CFPB, DOE, DOJ, FTC and others in the alphabet soup of the federal government must grasp about manufactured housing today.
Its One Thing To Suspect, Another to Document and Provide Evidence
It is one thing to believe something. It is an entirely different matter to prove something.
It takes significant effort to document that truth in a way that others may find meaningful, and compelling.
Regulatory officials, federal investigators, attorneys, and the majority of the industry’s members all need something to point to that can be understood and grasped.
Literally millions are impacted by these forces that deprive small businesses of the oxygen of time, capital, financing, and sometimes even the fear of losing products to sell. That’s why the application of the principles in the CNBC video last night – understood through the lens of manufactured housing – are powerful.
An industry member, asked to comment on the Tennessee Manufactured Housing Association controversy, told MHProNews, that ‘most retailers go to work every day trying to figure out how to sell their next home. But a few are busy figuring out how to put competitors out of business.’
Does that MH industry professional have a point?
“We Provide, You Decide.” © ## (News, analysis, commentary.)
Keep in mind, as previously reported, that MHI had an opportunity some years ago to do away with the onerous MLO Rule by agreement. They declined to do so. Related links to CFPB, capital, and finance related info follows.
The Manufactured Housing Institute has finally provided a series of written responses to concerns raised by a number of industry members. MHI did so to via an email to their members, as they ask them to renew their annual membership dues. Let’s make this hyper-simple.
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Submitted by Soheyla Kovach to the Daily Business News for MHProNews.com.
Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.