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MHARR to FHFA: Duty to Serve Without Chattel is Unacceptable

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Capitol Building credit, Wikipedia. MHARR, Mark Weiss images MHProNews. MHARR logo is their intellectual property, and is shown here under fair use guidelines.

Washington, D.C. – The Manufactured Housing Association for Regulatory Reform (MHARR) reports to MHProNews that, at a Duty to Serve (DTS) “listening session” conducted by the Federal Housing Finance Agency (FHFA) in Chicago, Illinois on January 25th,  it advised FHFA officials and representatives of the FHFA regulated Government Sponsored Enterprises (GSEs), that the December 29, 2016 FHFA final DTS rule which does not mandate manufactured housing chattel loan securitization and secondary market support by the GSEs is unacceptable as currently written.

In comments and a detailed written statement at the meeting, MHARR stressed that any DTS rule which fails to provide meaningful and timely securitization and secondary market support for chattel loans, which comprise upwards of 80 percent of the manufactured housing consumer finance market, cannot conceivably satisfy the mandate imposed by Congress via the DTS provision of the Housing and Economic Recovery Act of 2008 (HERA).

MHARR says that while the FHFA final rule and related guidance proposal issued on January 13th have been lauded by some as bringing consumers and the industry “closer to the realization of a manufactured housing chattel loan securitization and secondary market support program that would end decades of discrimination against the largest segment of the manufactured housing finance market,” the reality is that the final rule contains no affirmative requirement for GSE support of manufactured home chattel loans and no meaningful penalty or sanction for their continuing failure to serve that part, or any other part, of the manufactured housing finance market.

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Credit: Neon Tommy.

The final rule and evaluation guidance would only require that the GSEs consider such support, a formulation that particularly given the GSEs history, would allow them to either bypass and reject such support or engage in endless and ultimately meaningless research and outreach, with nothing more than a perfunctory explanation.

MHARR contends that the FHFA rule as confirmed at the meeting would leave major FHFA regulatory hurdles including its rule requiring approval of new products that could prevent or significantly delay any actual GSE support activity for manufactured housing chattel loans, in place.

The rule would thus continue to exclude the vast majority of potential manufactured housing purchasers from the market, because they cannot afford to pay higher-cost manufactured home chattel loan interest rates that are needlessly inflated by the discriminatory lack of GSE securitization and secondary-market support for such loans and by the lack of full and robust free-market competition, which is artificially suppressed by those same policies.

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Danny Ghorbani, photo credit, the Journal.

While discussing the GSEs, former MHARR President Danny Ghorbani further confirmed concerns.

Despite forty-years of on-again, off-again flirtation with the industry and its consumers, are socially active and engaged, but fiscally removed and divorced from each,” said Ghorbani.

[The GSEs] talk the right talk and go through the right motions, attending and sponsoring industry events and even hiring industry members as consultants to advise them, but have never formulated and implemented a positive and workable program to securitize the chattel loans that would allow low, lower and moderate-income consumers to become homeowners an underserved market that Congress decreed nine years ago, the GSEs must now serve.

For the full statement from MHARR, click here.

The Daily Business News covered the FHFA in a report linked here

Masthead commentary on this issue is linked here. ##

(Image credits are as shown above.)

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

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