MHARR Comments on Grossly Inadequate DTS Rule presents News at Noon with Erin Patla

Coming up, As seasonal Hurricane risks rise, Studies prove Modern Manufactured Homes are a safer bet

But first…this story.

MHARR Comments on Grossly Inadequate

DTS Rule

As promised earlier, MHARR has prepared and filed these comments — detailing the gross weaknesses and inadequacies of the proposed Duty to Serve or DTS rule — as early in the comment period as possible. This Is so that they can be shared and used as a model, basis, or support, as needed, for individual comments filed by industry members. Given the unparalleled importance of restoring and expanding the availability of private purchase-money financing for manufactured housing — to both the industry and its consumers — MHARR urges all industry members to file comments on this extremely important proposal. Comments are due no later than July 22, 2010. The Federal Register notice, available on the FHFA website (, contains specific instructions for both electronic and mail/hand-delivery filing of comments.

In particular, comments are critically needed from retailers, community owners and finance companies that have first-hand experience with the current unavailability of consumer financing for the industry’s homes and the devastating impact this has had for the industry and consumers of affordable housing. FHFA needs to hear from community owners with vacant land-lease spaces they need to fill with homes that are primarily financed as chattel — but are excluded from DTS by the proposed rule. FHFA needs to hear from struggling retailers with willing, qualified buyers who cannot buy because there is no private financing. FHFA needs to hear from finance companies that want to enter the manufactured housing market, but effectively have been barred.

The proposed rule is as bad as it is — essentially tracking the demands, complaints and historical prejudices of Fannie Mae, Freddie Mac and anti-industry special interest groups — because not enough industry grass-roots members commented last year in response to FHFA’s original Advance Notice of Proposed Rulemaking (ANPR), allowing that proceeding to be swamped and dominated by detractors of manufactured housing. The industry simply cannot afford for this failure to be repeated.

The importance of the Duty to Serve or DTS as a mechanism for expanding the availability of private financing for manufactured housing, is only underscored by the industry’s continuing and inexplicable inability to secure the full implementation of a workable FHA Title I public financing program. Notwithstanding a pledge by Ginnie Mae to lift its moratorium in the wake of the issuance of FHA June 1, 2010 Title I Mortgagee Letter, its June 10, 2010 announcement limiting future securitization of manufactured housing loans to those originated by lenders with a minimum adjusted net worth of $10 million plus 10% of outstanding manufactured home mortgage backed securities (MBS), will severely restrict its reach to only a very few companies. This means that the entry of new lenders into the manufactured housing market will be artificially and unnecessarily restricted, leaving consumers, retailers and others with the few limited choices that they have now, with little, if any, expansion of the current availability of FHA Title I loans.

The continuing inability of the industry to advance the implementation of both DTS and FHA Title I in Washington, D.C. (not to mention the Manufactured Housing Improvement Act of 2000) is preventing the industry and its consumers from participating in what should be a robust revival of the affordable housing. With many industry members in the nation’s capital during the week of July 11, 2010, the continuing unavailability of manufactured home financing — and specifically the inadequate implementation of DTS and FHA Title I and the roadblocks being placed in the path of both programs — should be the main focus of industry contacts with both Congress and the Administration.

Congress passed both DTS and FHA reform in the Housing and Economic Recovery Act of 2008 (HERA) to help the industry and its consumers. It is essential that the industry do its utmost to advance the full and timely implementation of these laws in Washington, D.C. in the weeks ahead. # #

More details on this DTS story and related documents and website links are available at the under the MHARR news and Industry Voices Guest Blog links. strongly supports and encourages industry members to sound off electronically or by mail on this critical topic.

“Up next, As seasonal Hurricane risks rise, Studies prove Modern Manufactured Homes are a safer bet”

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and “Now, back to the news…”

As seasonal Hurricane risks rise, Studies

prove Modern Manufactured Homes are a

safer bet

CHICAGO IL, JULY 6, 2010 – Hurricane season is upon us and analysts are predicting a particularly active season. Hurricanes and tornadoes spawn not only damaging winds, but also a rash of sensational reports damaging to the image of manufactured housing. These reports often create fears among consumers. But is that fair to scare prospective customers for today’s factory built home industry? Study reports suggest the answer to that is no.

This year hurricanes named Alex, Bonnie and Colin could bring injury and damage to homeowners along the eastern seaboard and in Gulf States. With Hurricane Alex already making its way into Texas, we’re reminded that Philip J. Klotzbach’s forecast team at Colorado State University predicted on June 2 that the 2010 season will bring 18 named storms, 10 hurricanes, and five major hurricanes.

Ironically, most of the names that will be used in the 2010 hurricane season are the same as those used in the active season of 2004 when Charley, Frances, Ivan and Jeanne – these names retired – made landfall in Florida. A closer look at how manufactured homes faired in that 2004 hurricane season makes good sense. “Tragically, an unprecedented hurricane season in 2004 saw four major hurricanes with sustained winds ranging from 105-145mph at landfall, impact 60 of 67 counties in Florida within a span of six weeks (DHSMV, 2004).” That season left more than 3,000 people dead, including 152 in the U.S., and caused more than $42 billion in property damage.

K.R. Grosskopf, Ph.D., assistant professor at the University of Florida, Gainesville did a study called “Hurricane Survivability for Manufactured Housing: A Case Study in Disaster Mitigation for Low-Income Housing.” Grosskopf studied 152 manufactured home communities and 29,274 manufactured homes surveyed after the 2004 Florida hurricanes, 3,583 units were totally destroyed or non-reparable. However, none of the 4,056 manufactured housing units constructed after the 1994 U.S. Manufactured Housing Construction and Safety Standard were destroyed or seriously damaged.

This year the chance of a major hurricane hitting the U.S. coast is 76 percent, compared to an average of 52 percent for the last 100 years, according to the prediction. The chance of a major hurricane hitting the Florida peninsula and the U.S. east coast is 51 percent, compared to an average of 30 percent for the last 100 years.

According to the Insurance Information Institute; Florida accounted for 22 percent of all U.S. insured catastrophe losses from 1980-2006, losses which equate to $59.0 billion. Yet the experience of the 2004 hurricane season showed as never before that subject to more stringent codes, newer manufactured homes can weather the storm.

The study also compared the methods, materials, waste generation and energy use of manufactured housing to site-built homes in 110-mph wind speed zones. It should be noted that those Wind Zone III standards put in place in 1994 readily handled the sustained winds recorded by the hurricanes of 2004. The study also found that manufactured housing has less waste, is energy efficient and more cost effective.

Some insurers have taken note.

Bob Ritchie, president and CEO of American Integrity Insurance Company, gave an exclusive interview to on this subject. American Integrity Insurance Company announced last week that it is reducing its rates by an average of 10 percent statewide for customers who live in manufactured homes that are 10 years or newer in certain non- coastal Florida regions.

Ritchie told that for Florida the homes ten years and newer rival or are in some cases superior to site-built. That fact, he says “can make people’s head turn.”

Best prepared are homes built after the adoption of the federal HUD Code manufacturing standards in June 15, 1976. Florida installations standards were added in 1994 and imposed by the Sunshine State in 1999.

The study noted the requirements in 1994 that came as a result of the destruction caused by hurricane Andrew in 1992.

“It’s all for naught if you build the (homes) right but don’t install them correctly.” Ritchie says. “In Florida you take (manufactured) homes that are ’94 and ’99 and newer and they are superior. That was proven by Hurricane Charley in 2004 where you had newer manufactured homes still standing next to a site-built home that was demolished.”

t is pre-HUD Code mobile homes that: “…are more vulnerable to wind-driven losses, so that cost per thousand for that needed coverage is much more.” Ritchie stated. However, the facts are different for modern manufactured homes, where the issue is loss “severity times frequency. That component is typically lower than site-built.”

To rephrase this, pre-HUD Code mobile home losses are higher, and yet manufactured housing losses are lower. Modern manufactured homes performed as well or better as conventional construction in the hurricanes that hit Florida in 2004. But how often does that fact get reported by the mainstream media?

“When the mainstream media, public officials or others incorrectly lump modern manufactured housing in with older pre-HUD Code mobile homes, it does an injustice to everyone. It is like comparing a new iPhone to a 50 year old dial phone.” stated L. A. ‘Tony’ Kovach, manufactured housing industry consultant and publisher of the Manufactured Home Marketing Sales Management trade journal.

“I recall a conversation with an Oklahoma City weatherman, back in the 1980s.” Kovach said, “Why do you give this type of portrayal of manufactured housing when it comes to wind storms? Why don’t you use the proper term of manufactured home vs. mobile home? His answer was, ‘We are essentially lobbying for better standards.’ What he didn’t want to realize is that those standards already existed when the HUD Code went into effect on June 15, 1976! Those standards and the updates to the HUD Code that have followed since then just keep making our industry’s homes perform better and better.”

According to the study done by K.R. Grosskopf, Ph.D:

“Manufactured housing has become a staple in the US affordable housing market in spite of a prevailing public opinion that such housing is unsafe. However, University of Florida research shows units constructed after 1994 US code changes survived an unprecedented 2004 hurricane season with little damage. Produced in one-fifth the time and at half the cost of site-built homes, manufactured housing assembled in a factory environment uses fewer materials, generates less waste, and fosters greater worker productivity than comparable site-built construction.”

“The facts demonstrate that modern manufactured homes are stronger, smarter, safer stylish and provide major savings. That is the message that the policy makers, the media and the home buying public needs to grasp. As an industry, we have to do a better job of communicating those facts! You cook, clean, eat, live and love the same in a factory built home as any conventional house, but you can live better because you live for less.” Kovach said.

The complete story is available at

“On behalf of Production and IT Manager Bob Stovall, Editor Tony Kovach and the entire writing and support team, this is Erin Patla, G’day!”

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