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Bank Vault Door Closes on Manufactured Housing Lender

We’ve heard for some time the whispers about the now announced closure of U.S. Bank’s indirect manufactured housing lending program. To protect sources, we’ve been unable to do more than hint before today about what is now a done deal. We didn’t have a date, but knew it was ‘coming.’ What does this mean for manufactured housing lending?

This is “one way to avoid Dodd-Frank and all the other crap” was one message that hit our inbox today, as reaction to the U.S. Bank announcement began to come in.

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How much does the locked door on more lending options cost manufactured housing industry members every year? Photo credit, FlickrCreativeCommons.

Professional Warranty Service Corporation (PWSC) is another pull-out from Manufactured Housing that has taken place recently. More such moves are rumored to be coming down the pike, along with consolidations that will place more in the hands of a few.

Manufacturers tell us that consolation or closure could easily hit their sector before another 6 months goes by. While still active, giant firms like American Modern have long ago scaled back their insurance side in MH.

The High Cost of Low Volume sales in Manufactured Housing

In September, we ran this featured article:  The High Cost of Low Volume – MH Sales for Retailers, Communities, Factories and others.

 

We knew this was coming.

Tony, a lot of operations cut their back ends areas way back.” one client told us. “They are now trying to figure out if they are willing to ramp back up, at what risk and cost or what they are going to do.”

We agreed that a number of firms have had their guts kicked out, and they’ve dramatically lowered their expectations. Regulations are a part of the challenge, but let’s be clear, it isn’t the only one.

Another veteran told me Monday, “Tony, we have plants in our state operating at maybe 35% capacity.” Some of the commentary that followed can’t be shared at this time. When I commented to that pro that we should be doing 4 to 6 times the new manufactured home sales volume that we currently are, his two word reply? “At least.

Fort Worth, Texas this September 16-18 manufactured home sale

Would U.S. Bank or PWSC have pulled out if we were shipping 300,000 to 400,000 new HUD Code MHs a year? Unlikely! Before you say something negative like, that 300,000 to 400,000 sales level be can’t done today; really? Remember RVs have a far more limited target audience and are shipping some 5 times what we are in new HUD Code manufactured homes.

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Image credit: Plus 1 Properties.

Do you think they are celebrating at the CFPB today? 2017 is just around the corner. But there could be changes to what goes on inside the CFPB’s palatial offices before the next 2 years are all said and done.

A Veritable Choir of Voices Calling for Positive Action!

Jess Maxcy at the California Manufactured Housing Institute (CMHI) shared a number of items with us the past few days (thanks, Jess!), one of which will be our lead-off for this next section.

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http://www.MHProNews.com/home/industry-news/industry-in-focus/8646-back-to-the-future-for-manufactured-housing-professionals

Speaking of zoning, here is Jay Hamilton from Georgia Manufactured Housing Association (GMHA) sounding off on local official trying to push ordinances restricting used manufactured homes, in violation of state (not to mention, federal) law.

http://www.MHProNews.com/blogs/industryvoices/county-violated-the-law-in-restricting-placement-of-older-manufactured-homes/

Or check out what Bob Vahsholtz, author of Dueling Curves and long time MH veteran, has to say on what he sees as the lack of national industry leadership.

http://www.MHProNews.com/blogs/industryvoices/who-represents-manufactured-housing/

Steve Lefler, Modular LifeStyles VP has some of his interesting and tongue-in-cheek commentary on the 6th Circuit Court ruling on manufactured homes.

http://www.MHProNews.com/blogs/industryvoices/a-home-built-in-a-factory-can-be-a-home-just-like-a-site-built/

DJ Pendelton, Executive Director of the Texas Manufactured Housing Association, has plenty to say about the CFPB’s recent 55 page report. DJ is always a fine writer, please read all about it, at this link below.

http://www.MHProNews.com/blogs/industryvoices/dj-quixotes-adventures-in-la-manufactured-housing/

The Wisconsin Housing Alliance’s Amy Bliss is another wise soul who points out some unique angles on what the industry’s approach might be at leveling the playing field in financing. Check out Amy’s OpEd, linked below.

http://www.MHProNews.com/blogs/industryvoices/an-analysis-of-the-atlantics-report-on-manufactured-housing-cfpb-and-mh-financing/

Industry finance expert, Dick Ernst shared a critique on the higher cost of personal property lending that some non-profits and all of the CFPB should make required reading.

http://www.MHProNews.com/home/industry-news/industry-in-focus/8597-deconstructing-the-high-cost-mortgage-loan

Last-and-not-least as a great bookend to the above, from ever-popular finance expert Marty Lavin, JD – is his latest literary foray, linked below.

http://www.MHProNews.com/home/featured-articles/november-2014/138-general-manufactured-housing-industry-topics/8577-where-are-we-now-a-second-chance.

Again, non-profits keen on financing, are you listening to what Marty has to say?

The Emerging View

When you start pulling threads from the above together, what emerges are potential elements for advancing manufactured housing to new record highs. For 5 years, we’ve said and written, manufactured housing has all of the answers it needs within our reach. Are we willing to listen to each other? Are we willing to pull together?

Or will we wait until more business closures, exits and consolation takes place? If you happen to be working for, owner of or hold stock holder in a big firm in MH remember this. The so-called big boys in our industry could easily find themselves blown out of the water within 24 months of the anticipated multi-billion dollar entry of a entry into American factory-built homes from China, Canada, Japan, OPEC nations, or the sources eying our industry from from right here in the U.S..

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Standing room only crowds at
L’ville Business Building Seminars.

If that later happens, as the top publisher, service provider and consultant, we’ll be fine – so my concern is for professional readers like you. We’re having a good year, how about you?

But it could be better for us all, right?

It’s long past time for us to learn to pull and hang together. Otherwise, a growing number will hang – and fall – separately. We’ll never get 100% to pull together, but even a modest number synergizing at first could make an amazing difference.

Want to learn how? See you in Louisville for the big Show and Seminars? ##

la-tony-kovachby L. A. ‘Tony’ Kovach

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