“There’s class warfare, all right, but it’s my class, the rich class,
that’s making war, and we’re winning.”
– Warren Buffett, Chairman of Berkshire Hathaway, parent to
Clayton Homes, 21st Mortgage Corp, Vanderbilt Mortgage and Finance,
and other Manufactured Housing Institute (MHI) member firms, per GoodReads.
“Why is it that any time we speak of temptation we always speak of
temptation as something that inclines us to wrong. We have more
temptations to become good than we do to become bad.”
- Rev Fulton J. Sheen, per Goodreads.
Part-time Manufactured Housing Institute (MHI) catspaw and surrogate George F. Allen has lashed out at the organization that he was once a longtime member of in his latest missive. Mark those words if you are an Allen reader or devote, and periodically ask yourself if they fit. Don’t be surprised if they do.
It wasn’t so long ago that Allen was de facto attacking the Manufactured Housing Association for Regulatory Reform (MHARR) for daring to try to address core issues facing the industry without agreeing with or joining forces with MHI. His waffling becomes even more confusing when the still freshly formed National Association of Manufactured Housing Community Owners (NAMHCO) is considered by Allen.
Don’t wait for consistency from Allen, as a longtime former client of his told MHProNews that the key to decoding works like this. “With George, it’s AAA. All About Allen.”
If that seems harsh from a former client of Allen’s, ponder the fact that Allen openly says as much on his own blog weekly by proclaiming as his “Motto: ‘U Support US & WE Serve U!” His idea of ‘serve’ might be subject to another unique notion, but there is nothing quite like Allen being up front about ‘pay to play,’ is there?
Those disclaimers noted, Allen or ‘GFA’ has struck again.
His purported targets? MHI and Berkshire Hathaway.
Be Fair and Objective, Because Allen Had an Insight
That said, as MHProNews has long stated, one must discern in fairness – using the ancient principle of separating the wheat from the chaff. There are periodic points, if someone truly understands the industry’s dynamics and how Allen operates – that someone might occasionally glean something useful from “GFA.” But that can only prove possible if his code words and history are well known. Otherwise, hidden and open agendas arguably abound, and they may contradict what he said moments or days before.
For an vexing example, Allen is known to support ‘education’ that industry legal sources have dubbed illegal. A non-MHARR industry attorney emailed MHProNews about Allen’s ‘lease purchase option’ or ‘rent to own’ on January 15, 2019, to say: “…it’s ALWAYS been my position that lease option and rent to own are illegal if they are a “workaround” for chattel financing, which is what most such schemes are.” First time readers are reminded that MHProNews often turns quotes bold and brown so that they pop, but otherwise the text is as in the original.
Indeed, that non-MHARR manufactured home attorney’s view is one that the Consumer Financial Protection Bureau (CFPB) itself has stated, by calling them ‘disguised credit transactions.’ Here’s an example of how it was phrased by the CFPB in a 2015 final rule: “…intended to “include leases, only if they are, in essence, disguised sale arrangements.”
Those sources and concerns with respect to Allen and SECO ‘education’ noted, it must also be added that when he was asked by MHProNews to indemnify his and SECO ‘students’ who follow their respective advice on such rent-to-own matters, Allen declined in writing to do so. Thus, readers of Allen or attendees of SECO who are tempted to follow such advice risky advice, beware. As a final word of caution to Allen reader and SECO devotees on that ‘rent to own’ or ‘lease purchase’ topic, keep in mind that the New York State Attorney General forced numerous communities in that state into a settlement over that very practice. ICYMI, or need a refresher, see the linked text-image box below.
But with that disclaimer and caution noted, Allen’s periodically been ‘tempted’ to say something useful when others who publish may or may not have the chutzpah to as openly express.
With that background, let’s ponder Allen’s latest maneuverings, as stated in his own words, noting that one of the sources for industry image woes is someone Allen and SECO have reportedly now embraced. That Allen-esque contradiction about Frank Rolfe will be reviewed in the section beyond this next subheading.
Allen Delivers His Shives – Takeaways from GFA’s 9.26.2019 Review of Manufactured Housing Institute (MHI) Annual Meeting in Savannah, GA
Perhaps with sarcasm in mind, GFA wrote, “Preview: ‘Good-bye’ leaders [Joe] Stegmayer & [Richard ‘Dick’] Jennison, and ‘Hello’ Berkshire-Hathaway; no name yet for ‘new type’ manufactured homes; research aims to head off national rent control; &, ‘affluence gerrymandering’ alive & well at this national MH venue.”
Allen also said this. “Three Berkshire-Hathaway-related corporate executives to lead new Manufactured Housing Institute (‘MHI’) board in year 2020: Tom Hodges, esquire, of Clayton Homes as board chairman; Eric Hamilton of Vanderbilt Mortgage Finance as treasurer, and Tim Williams of 21st Mortgage as board member. Leo Poggione of Craftsman Homes, and recent RV/MH Hall of Fame inductee, becomes vice chairman of the board, and Patrick Waite of Equity Lifestyle Properties (‘ELS, Inc.’ – world’s largest owner/operator of land lease communities) will serve as board secretary. Curious. Was there a formal nominating committee this time around?”
It will be recalled that a few years back Allen arrived at an MHI annual meeting with hand-full of what he called ‘proxy ballots’ for the chairman’s role from numbers of MHI/National Community Council (NCC) members. MHI declined honoring those ballots. MHI and their outside attorney have declined providing their current and prior bylaws, charter, conflict-of-interest guidance and other documents when periodically asked by MHProNews.
That’s said because what Allen appears to be suggesting in his code-words is that the election of the new MHI Executive Committee is illegitimate. But set that aside for now, because as another MHI member told MHProNews, ‘MHI is scared to death of not doing what [Berkshire Hathaway owned] Clayton wants, because if Clayton pulled out of the association, they would quickly move toward insolvency.’
That and Lavin’s periodically referenced quotes demonstrate what MHProNews has for some time dubbed the Omaha-Knoxville-Arlington axis and their allies.
We’ll skip over the part of Allen’s musings where he talks about the new class of homes, it is a topic that merits another deeper look at another time. Let’s simply note as a placeholder for now that several MHI member professionals believe that the new class of homes was an insult to the balanced of the manufactured home industry’s products, unnecessary, and counterproductive. MHProNews’ publisher L. A. ‘Tony’ Kovach called the so-called new class of homes a Trojan Horse for the industry. Indeed, since that new class of much higher cost HUD Code homes was plugged by MHI on their 2018 self-promotion video, industry shipments went down for 10 of the last 11 months. MHARR has ripped the new class of homes as a way of diverting Fannie Mae and Freddie Mac from their “Duty to Serve” manufactured housing obligations as required by federal law under the Housing and Economic Recovery Act of 2008.
That noted, what’s juicy and merits pondering is what follows from Allen.
“National Communities Council (‘NCC’) division is well aware of negative PR and social, business, political turmoil foisted on the land lease community realty asset class, by private equity firms acquiring such properties, and portfolios thereof, then – in too many instances – ‘jacking’ rental homesite rates to generate income needed to satisfy high debt service (mortgage) and investor ROI (‘returns on & of investment’) demands. Their answer? To research the matter during months ahead, then decide if and how to take action.”
Allen would unlikely say so publicly, but that makes a point that MHProNews and our MHLivingNews sister site have made about MHI/NCC’s so called code of ethical conduct. Allen is a devoted regular reader of this industry-leading publication, per our sources in his circle of what GFA calls his “intimates,” as are thousands of others in the industry. But Allen likes to either call for our boycott, or more often, pretend that MHProNews doesn’t exist. Again, both oddities should be understood per that former client of his – “With George, it’s AAA. All About Allen.”
Those nuanced noted, to grasp the significance of that NCC comment by Allen, one should carefully read the 9.6.2019 report below.
Then think MHI fig leaf.
It is debatable that those MHI member firms that ‘jack’ site fees up after buying a property desire the very think that they claim to fear. And if MHI wanted to seriously question black hat behavior, why don’t they merely invoke their so-called code of ethical conduct? Why does MHI repeatedly ignore the parting message of their former President Chris Stinebert, who stressed that the value proposition to the manufactured home industry’s consumers must be paramount?
Not unlike Allen, MHI’s behavior must be decoded too, as Marty Lavin recently put it in the following way.
It is regrettable that there is such dark twists, turns, and head fakes in our industry. But in order to grasp why the industry is underperforming, such insights are necessary. Because the communications and ‘education’ that others produce are often misleading or harmful, as this report and those linked from it reflect.
Let’s sum up and decode what Allen’s 9.26.2019 statement arguably said in this fashion.
- Allen, who per sources has his own conflicts of interest and ethical challenges, has in underworld fashion slyly publicly stuck a shive into MHI, the NCC, and Berkshire brands like Clayton Homes, 21st Mortgage and Vanderbilt Mortgage and Finance (VMF). He is questioning their ethics.
- This is far from the first time that Allen has made such statements. The pull quotes that follow document other examples of other instances where Allen has used code – or blatantly – stuck it to MHI and the Berkshire brands.
- What Allen fails to do, among other things, is recognize that it is MHARR, or this platform, that has consistently held MHI and the Berkshire brands to account. While GFA vacillates between praise and blame, for discerning minds that have a broader perspective, he’s just another side show smoke generating machine. More on that further below.
Final Duplicitous Irony?
SECO has promoted the fact that Frank Rolfe, who publicly was at odds with Allen and SECO leader Spence Roane in a fiery LinkedIn debate some years back, are apparently back on speaking terms. Rolfe’s and his partner Dave Reynold’s firm are among those that Senator Elizabeth Warren has publicly called out for the very ‘black hat’ practices that Allen has been musing against. How did Frank Rolfe phrase it. Hypocrisy, anyone?
While we get typos too, but poor SECO and Allen get some beauties, and worse than typos are fact-errors. Conflating ‘Frank and Dave’ with Hometown America? That’s a big miss. Did they misread stories on our website on those topics?
“Frank Rolfe and his partner Dave Reynolds are the 5th largest community owners in the nation. Their companhy name is MHU.com not Hometown America.”
Those emails from SECO link to their website, which is sponsored by MHVillage.
SECO is promoting one of the very personalities as a featured speaker that Last Week Tonight with John Oliver ripped by name in his viral and errantly named ‘Mobile Homes’ video, namely, Frank Rolfe.
Rolfe, like Allen, has ripped or shivved MHI on several occasion. Recent and previous ones by Frank or he and Dave are as shown.
Wittingly or Not, Decoding How the Game is Played in MHVille
It is a tangled web. But let’s do a miniature summary like this.
- MHInsider praises George Allen, promotes SECO, and MHI. Each of those in turn, promote
- Kurt Kelley’s Manufactured Home Review (MHR) has routinely promoted Frank Rolfe, Dave Reynolds, MHI personalities, and Berkshire Hathaway brands too. Kelley has oddly failed to respond to concerns of plagiarism, among other possible problems.
- Allen attacks MHARR openly, or this publication in a thinly-veiled fashion, purportedly per sources as part of a deal made with MHI, but is more likely to stick a shivvie into MHI or Berkshire/Clayton in recent years.
While the above are busy posturing and virtue signaling, in an arguably ‘there is no honor among thieves’ manner, Senator Elizabeth Warren is among the 2020 candidates who has not minced words in taking dead aim at several MHI connected firms.
Senator Warren has called what Allen laments “legalized looting.” The proposed solution could include the very national rent control that MHI claims to want to avoid. More on that growing pressure to implement national rent control in an upcoming report on MHProNews, but here is a prior example of the kind of heat that Senator Warren has generated on the allegations of misbehavior that Allen is also decrying.
But if MHI wanted to dose this spreading proverbial fire, why don’t they simply eject those members who bring shame or bad publicity to the industry? After all, it is firms like these shown plus others with clear ties to MHI that have been and/or are being scrutinized by federal and other officials, plus mainstream media.
- Clayton Homes,
- Cavco Industries,
- 21st Mortgage Corp,
- Nathan Smith/SSK Communities,
- ‘Frank and Dave’
- Havenpark Capital (Management)
- Allen and SECO
- and numerous others that congressional representatives – including 2020 Democratic hopefuls – have drawn months or years of negative news headlines.
Once more, as a disclaimer for new readers and a reminder for others, in fairness there are white hat professionals who work in organizations and companies that bring shame on the manufactured home industry. Some of those white hat professionals are sources of information for MHProNews.
What is sobering – or ought to be – is that most state associations are silent in the face of these self-evident problems. Perhaps not unlike MHI, state executives arguably fear losing their jobs if they buck the alleged corruption that has occurred in the industry’s association system. Who suggests such? Among others, Danny Ghorbani.
But state execs have told MHProNews similarly. They have been threatened before, and they are not keen to risk it again.
Industry and Investigator Conclusions?
Manufactured housing is a necessary and good product that is so valuable that it has attracted any number of firms or players, big and small, some of which purportedly behave in a black hat fashion. The existing structures have been co-opted by Berkshire brands, in concert with some others. They are consolidating the industry, and one of their tools in the moat is generating bad news which sparks harmful legislation which impact smaller firms more than larger ones
Here’s how Warren Buffett put it. “Honesty is a very expensive gift, Don’t expect it from cheap people.” And “Pick out associates whose behavior is better than yours and you’ll drift in that direction.” Both quotes are per Goodreads.
The irony – or hypocrisy? – is that Buffett’s brands themselves arguably associate with precisely the types of people that deliver the results they want. Look no further than messaging deceptions deployed by Richard Dick Jennison and the contender for his post, Lesli Gooch. When that pair from MHI were called out on that by our publisher, Tim Williams of 21st held a vote of confidence at an MHI meeting to defend Jennison. Go figure.
MHARR argued almost 2 years ago that a new post-production association had to be formed. While NAMHCO has emerged since then, they hired a former MHI VP and have since taken a public position on a bill that MHI and Prosperity Now supported, which MHProNews and MHARR opposed as potentially undermining HUD’s enhanced preemption authority.
- Follow the money.
- Pay more attention to what people do than what they say.
- The rearview mirror is clearer than the windshield.
Looking back, there is a tangled web that involves each of these organizations and personalities to a greater or lesser degree. Some may at times be ‘tempted,’ as Sheen’s quote at the top reflects, to say something good.
But one might also wonder, is that Allen posturing to his shrinking base? Are each of these SECO and Rolfe sources virtue signaling to their respective base of supporters and followers?
In researching these concerns, a community leader came out publicly and said that Congress and public officials must dig into this, because manufactured housing is necessary and good, as HUD Secretary Ben Carson has argued repeatedly.
While They Dance and Prance, Demands for National Rent Control and Harm to Manufactured Housing Residents and Independents Grows
Sadly, who is there on the post-production side that can address this? How could that credibly be Allen, SECO, MHI, ‘Frank and Dave,’ or any that aide and abet the bad behavior that could bring national rent control onto manufactured housing communities nationally?
This pattern of problematic behavior impacts more than communities. It impacts producers. Because of the image issues, it impacts retailers or virtually all others too.
MHI, Allen, Kelley, the brands in Knoxville, and their outside attorneys have for some time declined replying to these kinds of concerns. Yet virtually all of those same voices praised our work, until we began to connect the dots in published reports like this…
…thanks in good measure to white hats in the industry who are tired of this type of disgusting behavior that threatens to ruin even more independents. Outsiders looking in must grasp that ethical professionals are troubled by these events, and some step forward with tips and insights that are useful in forging reports with analysis like this one.
It is ever-more apparent that a new post-production trade group or alliance must be created. We’ve argued for that for years, as has MHARR. While we periodically see some things a bit differently than MHARR does – one recent example is linked below – but because they and we seek facts and evidence, we routinely see much more the same.
We spotlighted MHI’s woes while we were still MHI members, and even though some prominent MHI members were sponsors of this website. While we can be accused of missing how the game is played, due to the tangled nature of the various webs, once clear evidence was presented, MHProNews and our sister site have gone after bad behavior publicly and showing that evidence, in a ‘we provide, you decide’ fashion.
As a result, our already industry-leading publication has surged in readership. Federal officials, investors, and others who think in an objective fashion have become periodic or routine readers, as they have told us as much. They find the reasoning and evidence compelling.
Public officials – Democrats and Republicans – that have studied manufactured housing have praised the product.
But the black hat behavior and failure to enforce good federal laws is leading to avoidable impacts on millions in our nation, and by extension, to taxpayers too.
Why have the big boys allowed or encouraged this? Arguably because this ploy allows them to grow their moat and consolidate the industry.
Perhaps one more relevant point needs to be made. MHI members, including Berkshire brands, sparked the bad news that resulted in this push for more regulations and national rent control on manufactured housing. But who is it that’s behind some of the spotlighting of these issues? Nonprofits that have benefited from Warren Buffett’s dark money donations. Follow that money trail at this link below.
That insight originally came from Michelle Smith, the Golden State Manufactured Homeowner League (GSMOL), which MHLivingNews and MHProNews subsequently researched and confirmed.
Put differently, there are plenty of sources that point to Buffett and/or MHI connected operations. There is not a lack of allegations or evidence, what has been lacking is some media operation or public officials to connect the various dots that are hiding in plain sight.
It is, as Darren Krolewksi rightly said, it is sometimes a seemingly thankless job to have to do these types of troubling reports.
But it is a job that has to be done if the industry is to get cleaned up. If you aren’t already on our industry leading headline news email list, delivered x2 weekly into your inbox, you can sign up in seconds below. Thousands of MHVille Professionals, attorneys, public officials, and investors are among those who keep up with what’s new through these communications.
In the meantime, new efforts are underway to forge a post-production alliance that prohibits black hats from membership or ejects them if they sneak in and emerge. White hat firms must work more closely together, or national rent control and other possibly harmful regulatory and image related woes could follow. More on that post-production trade alliance in the days ahead. “Industry News, Tips, and Views Pros Can Use,” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)
Submitted by Soheyla Kovach for MHProNews.com.
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