Paltering, Manufactured Homes, CrossModTM Homes, Manufactured Housing Institute, Clayton Homes, Berkshire Hathaway Manufactured Home Lenders, DTS, and You


There are many forms of manipulative and deceptive techniques being used in the world today. One of these is paltering.

Paltering is “an active form of deception that involves the use of truthful statements to convey a mistaken impression” (Rogers, Zeckhauser, Gino, Norton, & Schweitzer, 2016) said an article entitled “To Deceive Using Truthful Statements published on Dec 18, 2016 in Workplace Psychology.

The image and pull quote below are from an article by Steve Nguyen, Ph.D.



This is insightful, but it was hardly a discovery in 2016. There have been governments, corporations, and individuals who have used a mix of truths, half-truths, and seemingly plausible lies for centuries to deceive other people. It has arguably been deployed in the manufactured housing industry, as what follows will hopefully make clearer.


Start with Human Nature…

When one understands the basics of human nature, and targets human weaknesses, there are any number of ways to get someone to do things — even against their own self-interest. That’s how con artists work. This has been done by people like Bernie Madoff in business but have been done by those seeking political power too.

Well known modern examples of the later sadly include my home country of Iran, the nations of Venezuela or Cuba. Each were once prosperous places with far more freedom than they have today. A mixture of truth, spin, and outright lies that promised much but delivered little were deployed. That motivated millions to abandon what they had known for something that sounded good but proved to be a harmful illusion.

Mindful of that concept of paltering, half-truths, and spin, consider what the Manufactured Housing Institute (MHI)’s larger manufacturers deployed over 2 years ago when they began to promote the notion of a ‘new class’ of manufactured homes.

Before diving into that, let’s make a simple point. When there had already been years – arguably decades – of sound research, often by third parties with no direct ties to manufactured housing, why even launch a discussion about ‘a new class of HUD Code manufactured homes?’

Why not instead promote the HUD Code homes that already existed?

Hold fast to the answers to those prior questions. Because as even some MHI member-producers have said, there is a total lack of logic for promoting something besides what is obvious. ALL HUD Code manufactured homes. Which begs the question, who benefits from promoting this ‘new class of manufactured homes’ besides someone that may be trying to shrink the industry so that it can be consolidated at a discounted price?

When detected paltering may harm reputations and trust just as much as does lying by commission.” – as stated by Dr. Nguyen in that same article for Workplace Psychology (which cited Rogers, Zeckhauser, Gino, Norton, & Schweitzer, 2016).



Separating Wheat from Chaff

The damage being done to the manufactured housing industry be purported techniques of deception and manipulation are not easy to quantify in toto, but there are several examples that can be pointed to that give us a sense that the harm could be measured in the billions of dollars annually.

Part of the challenge is sifting through what is and isn’t true.

The next challenge is to help others discern what is and isn’t true, which is why MHProNews has for some time encouraged the notion of applying the ancient principle of separating the wheat from the chaff.




Warnings from Inside and Outside of MHI Against the “New Class of Homes”

Before going deeper, bear in mind that it was voices inside of MHI-only member firms that warned via MHProNews that the line between manufactured homes and modular homes was being harmfully blurred by what was then being called a ‘new class of homes.’

Furthermore, another industry professional also in an MHI-only member firm felt insulted that the vast majority of manufactured housing was being relegated to the status of second class citizens. As that professional colorfully put it, “What are we [all other HUD Code manufactured homes] chopped liver?”


“What Are We, Chopped Liver?” MHI Member December 2018 Reactions


The above was almost a year ago. But approaching two years ago was this report that dubbed the new class of homes project being pushed by MHI and their ‘big boy’ members as a “Trojan Horse.”


Manufactured Housing’s “Trojan Horse”

Given the fact that manufactured housing has:

  • Declined in year-over-year sales, a reversal of the modest prior growth trend since 2011, and
  • MHI proclaimed industry “momentum” as they touted their new class of homes in the last weeks of 2018, those concerns are arguably coming into sharper focus.
Screen capture with commentary and MHI’s logo are a collage by MHProNews, which faithfully reflects their “We’re Using Our Momentum Leveraging the Creation of a New Class of Manufactured Homes.” First, what momentum? Second, why the need for a new class of homes? Manufactured housing builders have made residential style homes since at least the 1980s. Buyers could always option in or do on-site whatever they wanted and can afford. It’s therefor a head fake, an apparent ruse that seemingly limits GSE lending to only a tiny sliver of the market that could already be served by modular coded factory-built homes, or by existing residential style HUD Code manufactured homes. This new class of homes is a costly waste of time, save for the fact that it diverts lower-cost financing. Who benefits from that fact? A monopolist, perhaps?
  • MHARR has repeatedly warned against the new class of homes as a means of diverting what scant resources were being applied by Fannie Mae and Freddie Mac toward the Duty to Serve (DTS) toward manufactured housing.


With that background, let’s now look at what MHI is now renaming that new class of manufactured homes, because it could hardly be more revealing, given months of generally declining sales during an affordable housing crisis.

Mixed Bag in September 2019 Manufactured Home Production, Shipment Data


Two more quotes are useful at this point.

Despite being small at the outset, engagement in dishonest acts may trigger a process that leads to larger acts of dishonesty further down the line.” – ibid (Garrett, Lazzaro, Ariely, & Sharot, 2016).

Mark Twain easier to deceive than prove deceit.

This is a powerful point made by Mark Twain, a.k.a. Samuel Clemens. It takes more time and effort to prove the distortion or lie than it does for a person or organization to tell the lie. Isn’t that part of what a con job counts on?

Hold those thoughts in mind, as we explore what Mark Yost, President and CEO of the Skyline Champion (SKY) had to say in a recent Capitol Hill hearing. Also bear in mind the following section of federal law, which makes it clear that one need not be under oath for this law to apply.




ICYMI or as a reminder, MHProNews’ prior report on that hearing and comment by Yost for MHI is linked below. Yost’s full testimony is found at this link here.

Senate Testimony on Manufactured Housing, Related Letters, and Statements


Now, Onto the MHI Backed “New Class of Homes” Now Dubbed “CrossMod™ Homes”

Here is word-for-word the prepared written testimony given by Mark Yost of Skyline Champion to the Senators in attendance of the hearing linked above.

Start of extended quote from the source shown.

Known as CrossMod™ homes, these manufactured homes are a point of entry for home buyers who would not have previously considered purchasing a manufactured home. They have the potential to reach areas of the country where manufactured housing has, in the past, been zoned out by discriminatory land use regulations at the state and local level. CrossMod™ homes are placed on a permanent foundation, qualify for conventional financing, and are virtually indistinguishable from higher-priced, site-built options. This new class of factory-built home can also be appraised using comparable site-built homes under special financing programs developed by our industry and the Government Sponsored Enterprises, Fannie Mae and Freddie Mac.

Prior to developing the CrossMod™ product, MHI conducted a national study to better understand what underserved, prospective homebuyers wanted and needed when considering purchasing a home. The results of this study have allowed the industry to create a product that provides consumers high-quality homes they find desirable, and at a price they can afford. When asked what home features were most important to them, MHI’s study found that prospective homebuyers rated the following items as most important (all of which are provided for in the CrossMod™ product), in this order:

  1. Garages
    2. Energy Efficient Features
    3. Pitched Roof
    4. Premium Finishes
    5. Upgraded Exterior”



Let’s stress that every part of that may in some sense be true enough. But it begs several pertinent questions. For example, every one of those claims about a new class of homes or the so-called CrossModTM could just as easily have described thousands of manufactured homes built prior to the new class. The evidence for that claim includes HUD’s 2011 PD&R in 2011, among other resources.

Regulatorybarrierstomanufacturedhousingplacementinurbancommunitieshudpdr postedmanufacturedhomelivingnews595x357 575x345
This is an issue that the Obama Administration era at HUD also explored in a useful, insightful report.


Garages have often been added to or provided with manufactured homes for years. Homes with high roof pitches or other features already existed. What, then, was the need for this so-called new class of homes? Isn’t the main purpose to divert lending and other legal resources away from all other manufactured homes?



While manufactured housing is often thought of as ‘rural,’ the sprawling 800 home site manufactured home land-lease community of Sterling Estates, in metro Chicago, is an example of how manufactured homes are found in cities too. The only place that modern manufactured homes could not be easily used in a city environment is in the most dense high-rise parts of a city. But even then, a design like the one below might be utilized.


Highrisemobilehometowers stackablemobilehomesmanufacturedmodularprefabhomesindustrydailybusinessnewsmhpronews


Or look at the photos in the article linked here.

Highrisemobilehometowers stackablemobilehomesmanufacturedmodularprefabhomesindustrydailybusinessnewsmhpronews

Highrisemobilehometowers stackablemobilehomesmanufacturedmodularprefabhomesindustrydailybusinessnewsmhpronews
Photos like this were used by Triad Financial, produced years before the new class of homes was discussed.

Rephrased, without disputing that this new class may be closer to a modular, that doesn’t change the fact that the entire point of the HERA 2008 law that established the Duty to Serve (DTS) manufactured housing was to provide lending for ALL HUD Code manufactured homes.

Image above used to illustrate an actual attached garage to an existing manufactured home, which is noted as part of the proposal in the story details further below.
C:\Users\L. A. Tony Kovach\Downloads\AttractiveGarageAdditionsManufacturedHomesDonWestphalManufacturedHomeLivingNews.png
On the consulting and business development sides of our operation, we’ve worked on several projects that used integrated as well as detached garages, often with higher roof pitches. This ‘new class of homes’ makes no sense, based on years of prior evidence. Which begs the question, why divert lending away from ALL HUD Code manufactured homes to only a select few produced by MHI member companies?


On par lending for modular homes with conventional housing already existed. It was logically madness to undermine all other manufactured housing with this plan, unless that was the point?

Because financing for modular homes by the GSEs was already available, this ‘new class of homes’ with their parallel lending plans at Fannie Mae and Freddie Mac were entirely useless plan on its surface.

Which begs the question, who do something that was illogical, but sounded plausible to those who didn’t study the issue? Was that a former of paltering or a clever deception?

If so, to what is the possible advantage to MHI for doing this purported ploy?

Sadly, it is simple and directly benefits the three largest manufacturers who are all their members.



Here is the plausible, if twisted, reasoning. By undermining confidence in the balance of HUD Code manufactured housing – it served to put manufactured homes into a second-class citizen status, which is the opposite of what the MHIA of 2000 aimed to accomplish.

Further, the so-called big three could afford to lose sales for a time, so long as the rest of HUD Code builders faltered.

It is a page straight out of the video interview of Kevin Clayton when he said that he could lose money for 5 years, and it would be okay with “Warren,” so long as they deepened and widened his moat in the process.

Smoking Gun?!? In a series of direct quotes from Warren Buffett in context, a document from 21st Mortgage signed by Tim Williams, a Berkshire brand in MH Financing, and video recorded comments by Kevin Clayton, these all line up to demonstrate how independent retailers, communities, and producers – among others – where purportedly harmed by action that could be deemed an antitrust violation. MHI publishes an antitrust statement that is used at meetings. Why have they not acted on an apparent example of antitrust violations by their own members? The first half of the report linked below tees up the topic for a general public audience, but then goes into the details noted that ‘make the case’ for alleged antitrust violations by MHI member brands.

See the report linked above which explains why this video above points to an arguably nefarious yet open ploy.  Let’s stress what our publisher has.  It is difficult, if not impossible, to begin to understand what has gone wrong in manufacturd housing without completely understanding the video below and the report above.



When we lie for personal gain, our amygdala produces a negative feeling that limits the extent to which we are prepared to lie,” explains senior author Dr. Tali Sharot (UCL Experimental Psychology). “However, this response fades as we continue to lie, and the more it falls the bigger our lies become. This may lead to a ‘slippery slope’ where small acts of dishonesty escalate into more significant lies – ibid, (University College London, 2016).

Meanwhile, the evidence suggests that this so-called new class of homes has hardly taken off.


Clayton Homes Contradicts Wall Street Journal’s “Fannie and Freddie’s Latest Push: Factory-Built Homes”


MHProNews warned against much of this, citing the example that Clayton Homes had previously experimented with the so-called iHouse and iHouse 2.0.

Both the iHouse and iHouse 2.0 were market failures, with very few sales, per sources inside Clayton.

Click to download and see this full sized.

Clayton Homes Exposé – Wall Street Journal, MHVillage, MHInsider, and Statistical Surveys Contradict Clayton Claims – Evidence, Fact Check, Analysis

Back to the notion of paltering.


QuoteMarkManufacturedHomeLivingNewsTakeaway: Paltering (actively making truthful statements to create a misleading or mistaken impression) can damage and harm your reputation and trust just as much as lying by commission (misstating facts). The more you engage in being dishonest, the more your brain adapts to dishonesty — putting you on a slippery slope where small lies lead to bigger and bigger lies.

Written By: Steve Nguyen, Ph.D.



It takes more effort to debunk such deceptions and must be done by experts who can spot the deception in the first place.

What that reality implies is an understanding on the part of the deceivers that the risks were relatively low. The possible rewards were high, because the HUD Code could easily be 10 times or more its current sales, if proper marketing and education were occurring.

Clayton homes ihouse credit inhabitat postedindustryinfocus mhpronews
Interesting idea by Clayton, but it never took off. This was the first iHouse, photo by Inhabitat.

Some evidence of that notion is found below.

Since this infographic was first produced, there have been 12 out of 13 months of year-over-year declines in manufactured home shipments. This is a direct consequence of the kinds of issues and practices linked from this report. As the report linked below reflects, failure to properly implement the full potential of HUD Code manufactured homes possible under existing laws arguably costs the nation some $2 trillion dollars annually in lost GDP.

In that context, pivot back to MHI’s announcement last week about their new president, Mark Bowersox. Here is how that was framed by their email.

QuoteMarkManufacturedHomeLivingNews“MHI President-Elect Mark Bowersox

Mark Bowersox is currently MHI’s Executive Vice President of Industry Relations. Since joining MHI in 2015, Mark has overseen the development of new training programs for community

managers, salespeople and installers which have been migrated to an online learning platform to create a user-friendly experience for members…”

Mark Bowersox, photo credit, MHI. Mark, exactly how many manufactured homes have you sold in your career? Are the blind leading?




That begs the question: how effective could those MHI training programs be for salespeople when manufactured home sales have been in a year-over-year total decline for some 13 months?

Once more what MHARR called the “Illusion of Motion,” or other concepts advanced by others or us such as the “razzle dazzle,” red hearings, or head-fakes come to mind. For busy professionals, focused on selling their next home, it may not even occur to them that their trade association may be engaged in a deep-fake deception.


Past and current MHI members like Kenny Lipschutz, Marty Lavin, Frank Rolfe, the states that have broken away from MHI, are among the signals that no matter how pleasant their mixers or networking may be, they are ‘not getting their job done’ on behalf of the majority of their members. 
That statement isn’t meant to besmirch HUD Code manufactured homes, but rather is an apt description of how HUD Code manufactured homes have all too often been treated. Which begs the question asked by JD Harper and others. Why hasn’t HUD enforced the law on manufactured housing’s enhanced preemption? Why hasn’t MHI and their ‘big boy’ members pressed for a full implementation of DTS, instead of this toe in the water implementation that is geared toward a ‘new class of homes’ that is hardly taking off in the marketplace?
While the comment was about DTS, there are parallel educational principles that apply. Manufactured housing arguably should be doing more sales of all kinds of lending. To accomplish that is in part an educational and communication issue. That is a post-production topic too, and yet where are the efforts by MHI to teach retailers and communities to attract more qualified customers to their offices and sales centers?



Every one of those remarks came from people with deep ties to MHI, and there are more who feel the same but are afraid to lose their job or some coveted contract to stand up and say similarly. Indeed, after months of pressure by MHProNews and MHLivingNews through repeated articles that hit the topic, on top of years of similar efforts by MHARR, MHI finally relented last summer and said this in writing.




But if that was being earnestly sought, then why are those ‘magic’ words of ‘enhanced preemption’ still missing from the MHI website?


The Manufactured Housing Institute claim to represent all aspects of factory built housing. They are both a production and post-production trade group. By contrast, MHARR is a production trade group, but has in recent years taken on specific additional items that are strictly speaking post-production related. Why is MHI – with more resources and staff failing to effectively do what they claim their mission is?
Since that screen capture was performed on the MHARR website last spring, other articles that cited ‘enhanced preemption’ have since been published.


Facts are what they are. Once the MHProNews team began to understand how MHI and their puppet-masters arguably used head fakes that postured effort that in fact resulted in little, no, or even negative results, it became more obvious how to spot this tragically harmful ploy from within the industry.

The purported aim is to consolidate more of the industry into fewer hands. Companies like once independent Skyline succumbed to it, as one of their top executives wondered aloud the following.

Terry’s comment begs the question. Why is it that MHI, Berkshire Hathaway or other giants are failing to properly promote manufactured housing?


The advantage that the deceiver has is that the deception must be meticulously proven by an expert. But such was warned before in America by the likes of Abraham Lincoln and Samuel Clemens.



This is a powerful point made by Mark Twain, a.k.a. Samuel Clemens. It takes more time and effort to prove the distortion or lie than it does for a person or organization to tell the lie. Isn’t that part of what a con job artist counts on?

This comment by Mark Yost to Congress was just days before the DTS comments letter is due. Coincidence? Does lightning strike twice in the same place? And within a matter of days of each other? Will it be a surprise if MHI’s letter mentions Mark Yost’s testimony?  Or if MHI’s letter mentions the recent White House visit?

Lesli Gooch’s Award-Winning White House Manufactured Housing Meeting, plus Sunday Morning Manufactured Home Pro Headlines in Review-10.27 to 11.3.2019

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That’s your second installment on today of News through the lens of manufactured homes and factory-built housing,” © where where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

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Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and Connect with us on LinkedIn here and and here.


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