On April 26, 2016 the Federal Housing Finance Agency (FHFA) held a roundtable discussion with manufactured housing industry leaders, inviting those who commented on the proposal, to get their input on the FHFA’s proposed “Duty to Serve” rule, according to the Manufactured Housing Institute‘s (MHI) Housing Alert to MHProNews.
Lesli Gooch, Senior Vice President of Governmental Affairs at the MHI, said, “Requiring the government-sponsored enterprises (GSEs) to purchase chattel loans as part of their statutory Duty to Serve Underserved Markets is the single most important step the FHFA can take to improve access to mortgage credit for manufactured housing consumers.”
The FHFA’s Duty-to-Serve rule would require the GSE’s to support low-income housing for three underserved housing markets, one of which would “bring to manufactured housing consumers many of the same benefits available to consumers with conventional mortgages.” The other two markets are affordable housing preservation, and homeownership opportunities in rural areas.
The Manufactured Housing Association for Regulatory Reform (MHARR), noting previous undocumented closed door meetings with unknown consequences, describing the meeting as hastily called with a preponderance of MHI representatives (11 of the 18 attendees were from MHI) and officials from the largest businesses, says it was a “whitewash” that offers but a glimmer of hope for DTS chattel lending. MHARR states while MHI affiliated finance arms support DTS, it wants to impose restrictions on lender participation in any DTS chattel program. This could restrict competition and continue the high interest rates,
What MHARR notes was most unusual, the meeting did not include anyone from consumer groups, or from the GSEs who are responsible for implementing the DTS rule. The GSEs – Fannie Mae and Freddie Mac – have a history of opposing the securitization of MH chattel loans, but they were not in attendance.
While MHI had a statement that Lesli Gooch read, as noted above, MHARR had a list of the hows, whys and wheres of the importance of serving low income residents that Congress had intended with its Duty-to Serve directive. “Excluding manufactured home chattel loans from DTS would continue to force low and lower-income purchasers, in particular, into the higher-cost loans currently provided by the industry’s two dominant finance companies, says MHARR. Their full statement on this topic is linked here. MHI has requested that their full statements not be included in MHProNews reports.
MHARR’s concerns are indirectly echoed by a previous report by the National Mortgage News, which indicated last fall that the FHFA getting the GSE’s to do chattel loans was all but a done deal. They cited support by consumers groups as well as the MH industry’s associations as reasons for their report.
It was precisely that widespread support for this rule by interested stakeholders that caused NMN to project the adoption of chattel lending by the GSEs, and why MHARR keeps raising the issue as to what happened behind closed doors that may have caused this deal to go sideways? MHARR has repeatedly asked FHFA to release the minutes of all meetings by the FHFA and any other party, including consumer groups and MHI.
Finally, MHARR warns if the FHFA does not “include a robust and competitive program for manufactured home chattel loans within a final DTS rule, Congress will be asked for direct remedial legislation or legal action may be taken. Congress has done its job. The FHFA must now do its work.”
The FHFA did not have a timetable for the issuing of the final rule. MHProNews has long felt that this ought to be a simple case of enforcing the law, which requires the GSE’s to make such loans. The Daily Business News will continue to track this topic. ##
(Image credit: Federal Housing Finance Agency)
Article submitted by Matthew J. Silver to Daily Business News-MHProNews.