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MHI Raps FHFA’s Duty to Serve Rule for not Aiding Individual Homebuyers

mortgage andyenstallblog creditIn a letter to the Federal Housing Finance Agency (FHFA), the Manufactured Housing Institute (MHI) is pressing the government-sponsored enterprises (GSEs) to back chattel loans, which apply to manufactured homes (MH) not secured by real estate, according to nationalmortgagenews.

Requiring the GSEs to purchase chattel loans as part of their statutory Duty to Serve is the single most important step the FHFA can take to improve access to mortgage credit for manufactured housing consumers,” MHI senior vice president of legislative affairs Lesli Gooch said in a news release. “MHI’s written comments provide a roadmap on how FHFA and the GSEs can safely and profitably purchase these loans.”

Manufactured housing is an underserved market that the Housing and Economic Recovery Act (HERA), passed in 2008, requires GSEs to serve. With chattel loans comprising 70 percent of the MH market, MHI says the Duty to Serve Credits should extend to chattel loans, as long as they meet underwriting standards and provide consumer protections, as MHProNews has learned.

While the FHFA’s proposed Duty to Serve rule incentivizes states to reform titling laws so chattel loans can be converted into real estate loans, the rule only requires the GSEs to assist in the financing of manufactured home communities with fewer than 150 home sites, not individual chattel loans.

Although the FHFA did suggest setting up a pilot program for the chattel loans, the rule as proposed would not make financing more affordable for individual homeowners.

Gooch wrote, “If implemented, MHI’s recommendations will bring to manufactured housing consumers many of the same benefits available to consumers with conventional mortgages, namely greater access to credit with potentially more affordable financing, more lenders in the market, and the ability to refinance as market conditions change.” ##

Editor’s Notes:  

(Image credit: andyenstallblog)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

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