World War II German Army Sargent Schultz was the affable character in Hogan’s Heroes who ‘sees nothing, nothing!’ Perry Mason was another and earlier TV fictional character. Defense Attorney Mason revealed how inept the prosecution and police could be for routinely relying upon first impressions. Such images may come to mind in pondering how it is possible that well known Manufactured Housing Institute (MHI) members and MHI “housing coalition” allies are present while MHI is absent in an effort to press the Federal Housing Finance Agency (FHFA) to goad Fannie Mae and Freddie Mac to engage in manufactured home personal property (i.e. chattel, home only) lending with competitive manufactured home loans. Restated, while MHI members and allies have signed onto a letter shown below to FHFA Acting Director Thompson asking her to act in getting manufactured housing sellers more competitive lending, MHI itself is missing. MHI claims it wants lower rate and more competitive loans. But if more competitive loans with favorable terms existed, than 21st Mortgage, Vanderbilt Mortgage and Finance (VMF) loans and Clayton Homes itself would all logically tend to suffer. Those conflicting interests are near the heart of the question – why is MHI missing from this letter to the FHFA? This MHProNews report, analysis and commentary will explore such issues with facts and related evidence. Beginning with the “New Coalition of Leading Affordable Housing Advocates” press release, the actual letter to FHFA’s Thompson, and other related hits and misses by MHI will apparently reveal the theatrical nature of MHI’s so-called advocacy on behalf of “all segments” of the manufactured housing industry.
This will probe the question:
- is this multiple year pattern of MHI behavior previously called out as felonious and mere posturing by third parties referenced below heading toward federal action?
- Part One of this report will include the media release from the housing coalition to MHProNews and others.
- Part Two of this MHProNews report will be the actual letter from the housing coalition members to FHFA Acting Director Thompson.
- Part Three of this report will include more factual information, supporting evidence, MHProNews analysis and commentary. That will include insights from this new coalition member which previously publicly blasted Clayton Homes for monopolization while calling out MHI for years of giving them cover and support by posturing without performance on this lending topic. MHI’s unstated motivation, per that Washington, D.C. based source? To benefit Clayton Homes and their affiliated lending, which various Democratic leaders have also blasted. If so, then this most recent piece of evidence that MHI is engaged in an apparently fraudulent scam that employs a type of confidence game that treats trusting industry independents as ‘marks’ or targets for their con. Such realizations can lead to the logical conclusion that several on the MHI board of director and staff could be liable for failing to do their respective duties. In the wake of other recent federal legal action that targets a former MHI chairman and member corporation, it is no longer merely hypothetical.
- Part Four of this MHProNews report and analysis will summarize this and other evidence and provide a conclusion.
With that four part plan, here is Part One – the coalition press release.
New Coalition of Leading Affordable Housing Advocates Appeals for Meaningful GSE Duty-to Serve Plans
Published: Oct. 21, 2021 at 10:38 AM EDT
WASHINGTON, Oct. 21, 2021 /PRNewswire/ — In the face of a mounting housing affordability crisis exacerbated by the COVID-19 pandemic, twenty leading affordable housing organizations today urged the Federal Housing Finance Agency (FHFA) to require Fannie Mae and Freddie Mac (collectively “Enterprises”) to substantially improve their Duty to Serve proposals before the regulator approves them.
The Duty to Serve regulation requires Fannie Mae and Freddie Mac to facilitate housing opportunities in three areas: manufactured housing, affordable housing preservation, and rural housing. In May, under the prior FHFA Director, the Enterprises submitted mandatory three-year plans for how they will comply.
“Amid a housing affordability crisis that requires bold and aggressive action, Fannie Mae and Freddie Mac have set forth plans that fail to effectively reach those not served or not served well by the conventional mortgage market” the organizations, united as the new Underserved Mortgage Markets Coalition, wrote yesterday in a letter to FHFA Acting Director Sandra L. Thompson.
The coalition urges FHFA to make regulatory changes to enable Duty to Serve to function as intended by providing Fannie Mae and Freddie Mac with the flexibility to reach underserved mortgage markets more effectively.
In addition, the coalition supports FHFA’s new initiative requiring Fannie Mae and Freddie Mac to create plans to reduce racial or ethnic homeownership gaps and reinvest in formerly redlined neighborhoods.
“Solving our housing affordability crisis requires multiple actions by all levels of government and the private sector, and an invigorated role for Fannie Mae and Freddie Mac is one of them,” said George W. “Mac” McCarthy, president of the Lincoln Institute of Land Policy, convener of the coalition. “The Underserved Mortgage Markets Coalition seeks to hold Fannie Mae and Freddie Mac accountable and uphold their founding purpose: to bring housing finance opportunities to American families not traditionally served by the private market.”
Along with advocating for stronger plans and regulations, the coalition will use a new tracking tool to closely monitor the performance of Fannie Mae and Freddie Mac related to Duty to Serve and racial equity. The coalition is also conducting in-depth research to compare the performance of Fannie Mae and Freddie Mac to the broader U.S. mortgage market, which will make it easier for outside experts and advocates to assess the extent to which they are serving their public mission and to inform policy makers going forward.
“The coalition seeks to work constructively with the FHFA, Fannie Mae and Freddie Mac to meet the urgent needs of millions of Americans who are locked out of the opportunities that come with safe, stable, and affordable housing,” said Dr. Akilah Watkins, president and CEO of the Center for Community Progress, a member of the coalition.
The members of the Underserved Mortgage Markets Coalition include:
- Center for Community Progress
- Enterprise Community Partners
- Grounded Solutions Network
- Housing Assistance Council
- Housing Partnership Network
- Lincoln Institute of Land Policy
- Local Initiatives Support Corporation
- National Council of State Housing Agencies
- National Community Stabilization Trust
- National Housing Conference
- National Housing Trust
- NeighborWorks America
- Next Step
- Opportunity Finance Network
- Prosperity Now
- ROC USA
SOURCE Lincoln Institute of Land Policy
Part II. Coalition Letter to FHFA Acting Director Sandra Thompson
October 20, 2021
Ms. Sandra L. Thompson
Federal Housing Finance Agency
400 Seventh Street SW Washington, D.C. 20219
Dear Director Thompson:
As organizations committed to increasing homeownership and rental opportunities for low- and moderate-income Americans, we write with concern about the Duty to Serve Underserved Markets Plans for 2022-2024, submitted by Fannie Mae and Freddie Mac in May of 2021, under the prior
Director. Amid a housing affordability crisis that requires bold and aggressive action, Fannie Mae and Freddie Mac have set forth plans that fail to effectively reach those not served or not served well by the conventional mortgage market.
We respectfully urge the Federal Housing Finance Agency to pause the effective date of the plans while requesting substantially improved written proposals from the Enterprises that would be available for public comment as soon as practicable, that will allow for public input prior to implementation in 2022. Among other concerns, we believe these three-year plans do not fully articulate a strategic vision for meeting the spirit or the letter of the Duty to Serve Regulation; they inappropriately propose to drop highly touted and much needed programs such as purchasing manufactured housing loans titled as personal property without explanation; and they propose to reduce loan purchase targets for all three target areas—manufactured housing, affordable housing preservation, and rural housing.
In addition, we urge FHFA to make regulatory changes to give Fannie Mae and Freddie Mac greater flexibility in achieving the purposes of Duty to Serve and the new racial equity planning process. These include revising overly cautious capital requirements, encouraging rather than discouraging piloting new affordable housing products with the potential to reach underserved markets, and reversing a regrettable legal opinion that effectively prevents Fannie Mae and Freddie Mac from making targeted equity investments through community development financial institutions and other mission-oriented entities that could exponentially serve communities in need of affordable mortgage financing.
Finally, we commend FHFA’s recent decision to begin a racial equity strategic planning process, and we hope that this process leads to robust implementation, and ultimately, new housing opportunities for families.
We thank you for your leadership and look forward to working with you to ensure that all Americans have access to the opportunity that comes with safe, stable, and affordable housing.
The Underserved Mortgage Markets Coalition
Center for Community Progress cdcb
Enterprise Community Partners
Grounded Solutions Network
Housing Assistance Council
Housing Partnership Network
Lincoln Institute of Land Policy
Local Initiatives Support Corporation
National Council of State Housing Agencies
National Community Stabilization Trust
National Housing Conference
National Housing Trust
Opportunity Finance Network
The PDF of that Underserved Mortgage Markets Coalition letter is linked here. If MHI were serious about
getting more competitive lending for consumers and sellers, then why didn’t MHI sign onto this letter?
The answer to that simple question speaks volumes and arguably reveals the disconnect between MHI’s
claims when compared to their actions.
Part III – Additional Information, More MHProNews Analysis and Commentary
Set aside for now several pertinent questions which include the following.
- The coalition letter obviously does not set specific targets for loan volumes.
- Nor does the coalition letter get into other details.
But given that some of these groups are either MHI members already (example: ROC USA or Next Step); and/or are in other MHI connected “housing coalitions” (e.g.: National Housing Conference, or Prosperity Now on the Rep Cindy Axne (IA-D) bill), it may seem odd at first to think that MHI is not a signatory to this specific coalition letter to Acting Director Thompson at the FHFA.
But that’s when years of prior and exclusive reports and analysis from MHProNews and MHLivingNews comes into focus. For example. Who else in the industry’s trade media has reported on the tip from inside MHI that 21st Mortgage President and CEO Tim Williams said during an MHI meeting that he was glad that the GSEs pilot project for chattel lending had failed?
Who else among manufactured housing trade publications or bloggers reported on the obvious disconnect between MHI admitting there was no DTS chattel or personal property (home only) loans, while not connecting the dots on why the MHI ‘efforts’ were little more than a smoke screen?
Once more, it seems obvious that Samuel Strommen at Knudson Law raised valid, factual, and evidence-based legal research that claims that MHI and some of their dominating brands are engaged in “felony” acts of monopolization of the manufactured home industry.
That claim by Strommen was well in advance of more recent developments that reveal that Buffett planned early on to keep Clayton Home’s affiliated lending in portfolio. That stratagem would only work in the marketplace if Fannie Mae, Freddie Mac, and FHA Title I were all effectively marginalized or sidelined. Yet each of those have occurred. Per a statement attributed to MHI CEO Lesli Gooch, only a little over 30 FHA Title I loans were made in 2020. Per FHFA sources “on background” to MHProNews, there were no personal property loans made by either Fannie Mae or Freddie Mac during the 3 years that each of those two Government Sponsored Enterprises (GSEs) previously committed to making several hundred loans a year.
- Title I loans are scarce.
- Some 13 years after the Duty to Serve (DTS) manufactured housing was enacted, single family personal property lending on manufactured homes have proven to be an illusion.
- This pattern has benefited Clayton Homes, 21st Mortgage, VMF, and some of their apparent allies at MHI.
- That happens to have benefited Buffett led Berkshire Hathaway, who per a previously published pro-Buffett source said some 18 years ago that Clayton and their lenders would be retaining their loans instead of seeking placement via the secondary market.
- That “durable competitive advantage” moat-building strategy deployed by Buffett and Clayton could only have worked given little or no FHA Title I (Ginne Mae), Fannie Mae, and Freddie Mac single family home only lending.
- As Berkshire Hathaway Vice-Chair and longtime Buffett partner Charlie Munger said last summer in a CNBC interview, “Well, the regulators aren’t” [regulating]. This near magical outcome that benefited Berkshire brands and certain allies at MHI is apparent in hindsight. But this outcome could not have been known by the vast majority of the population in 2003, 2009, or most years since.
- These puzzle pieces happen to fit the allegations made by sources such as Doug Ryan with Washington, D.C. based Prosperity Now (formerly CFED).
- These puzzle pieces also happen to fit the facts laid out by Samuel Strommen at Knudson Law.
- Among the most revealing ‘coincidences’ is that Tim Williams acknowledged and seemingly predicted months in advance that the GSEs pilot project for manufactured home lending had failed. Indeed, when the new targets submitted by the GSEs for 2022-2024, there was nothing – zero loans – planned by either GSE for chattel or home only type lending on mainstream manufactured homes.
- All of this stands in stark contrast with MHI CEO Lesli Gooch’s claim that MHI is ‘disappointed’ that the GSEs did nothing and planned nothing.
- If Gooch’s statements were heartfelt and genuine, then why didn’t MHI sign onto this latest coalition letter that Next Step, ROC USA, Prosperity Now, and the National Housing Conference (NHC) signed onto?
- Or why hasn’t MHI initiated legal action to enforce the law that this coalition is asking for via this recent letter to FHFA?
It becomes increasingly clear that years of claims by the Manufactured Housing Association for Regulatory Reform (MHARR), MHProNews, and MHLivingNews on lending have proven to be correct.
There is simply no logical way for MHI to explain their 13 years of failing to get existing federal law enforced on DTS; save the now obvious. Meaning, that MHI – working on behalf of their consolidation brands, was posturing efforts without actually intending for those efforts to be successful.
That means that key MHI staff, and by extension, numbers of MHI board members, are apparently guilty of a con job that utilized at various times the U.S. Mail and what federal law sometimes refers to as “the wires.” MHI apparently never intended to actually obtain more lending.
- Lack of lending is a key factor that led to the demise of thousands of manufactured home independents. Who says? Kevin Clayton in testimony to Congress.
- That lack of lending caused dozens of producers to go out of business, and cost the industry some 200,000 jobs. Who says? Kevin Clayton on behalf of MHI.
- That paucity of competitive lending, the loss of independent retailers, etc. has over the years caused thousands of manufactured home communities to be sold for less than what they might have earned had their communities been at or near capacity as most were in the late 1990s.
It would take a tragically comical Sargent Schultz type of “I see nothing, nothing!” mentality to deny the ever growing evidence that MHI is posturing on behalf of all segments of the industry, when they are actually working for the interests of consolidators.
Or it would require the kind of flawed logic and failure to carefully follow the evidence to its proper conclusion that was exhibited by fictional defense attorney Perry Mason’s opposing law enforcement officials to ignore entirely reasonable conclusion arrived at by Strommen or others.
The question now is simple. Will federal and other officials step in to act on the evidence? Or will they continue to look the other way? While it is not necessarily an answer in this instance, the SEC action reported below offers reasons for evidenced-based hope.
Part IV – part four of this MHProNews report and analysis will summarize this and other evidence and provide a conclusion.
“Fool me once, shame on you. Fool me twice, shame on me.” That old maxim fails to take into account the penetrating Buffett insight on habits coupled with the Cold Fusion insight on the Illusory Effect as it plays out in manufactured housing.
This is a Buffett quote worth pondering in the light of MHI and related controversiesBut ponder for the next few moments the string of apparently deceptive, misleading, and potentially fraudulent and thus illegal claims made by MHI over the years. MHI is either at or near the top of the most inept trade group in the U.S. today, or their behavior is readily explained by grasping that they are slyly working to consolidate the industry.
1). MHI admits that the Manufactured Housing Improvement Act of 2000 (MHIA or 2000 reform law) has never been properly implemented. If so, where is their vaunted clout if they can’t get an existing law enforced?
2). MHI and their leaders like Kevin Clayton has promised for years to implement an educational/marketing campaign that would do for manufactured housing what the GoRVing campaign did for that industry. But some 16 years after the Roper Report or other efforts since, MHI is no closer to keeping those promises than they are to getting more competitive lending or having zoning/placement barriers removed.
2b). Tim Williams at 21st said that MHI should respond to every media misstatement or inaccurate fact. But there is no measurable evidence that MHI has done that either. The fact that what became the Clayton Homes backed and MHI branded CrossModTM homes effort has apparently failed miserably also makes it hard for MHI to claim how effective they are when from late 2018 into the spring of 2021, 2½ years of decline occurred until an extreme national housing shortage began to lift manufactured homes to what might now be a mere 30 percent of the industry’s production in 1998 before favorable laws were enacted.
3). MHI has been publicly silent and reportedly declined to engage on the Ayden NC controversy. What happened to their claims that they want to see enhanced preemption enforced?
4) MHI has been silent on complaints with dozens of pages of evidence filed with HUD’s Office of Inspector General (HUD OIG). If they were serious, why aren’t they engaged in a similar or even more aggressive fashion?
5) MHI has had William “Bill” Matchneer, J.D., prior law firm as a member for some time. Why didn’t MHI ask him the kind of question that elicited the response found in the report below?
6) MHI’s photo and video ops have demonstrated their access to key federal officials for years. So, why didn’t MHI use those opportunities to press public officials to do their jobs and follow the law?
The sad reality is that MHI can’t have it both ways. They can’t be this supposedly marvelously effective trade group with highly praised leaders like Lesli Gooch, who others fail to mention her documented conflicts of interest.
7) Much of what has occurred in recent years has benefited manufactured housing’s competitors. Indeed, MHI has signed onto coalitions with their competitors. So why didn’t MHI sign onto this letter than might actually benefit our industry’s independents?
There is almost a dizzying array of evidence of apparent corruption that rewards predatory brands and those who are consolidating the manufactured home industry.
8) While MHI claims to care about the health and safety of their meeting attendees, they have oddly failed to give even basic words of caution about the risks – per local Chicago sources – of attending their upcoming MHI-NCC meeting.
9) Rather than encourage and engage in open discussion and debate, as outside MHI attorney David Goch errantly claimed, MHI appears to duck, dodge, and deflect authentic discussion of their performance. Something similar often holds true for MHI’s dominating brands.
Another report is pending that will reveal an MHI ally and surrogate effectively tossing MHI under the bus.
10) A harmful and costly affordable housing crisis that disproportionately hurts minorities and those with limited economic means of whatever color or creed continues. This is despite MHI’s posturing earlier this year on precisely these points.
The Bottom Line?
This array of facts and evidence would be many times more than the fictional Perry Mason normally had to turn a case in one of his client’s favor.
It would take a Sargent Schultz type of mindset to “see nothing, nothing!” in this growing factual, evidence-based, multiple years pattern at MHI.
Given the SEC’s launched legal action, and the evidence of numerous 21st century scandals that yielded federal and/or state action once they became large enough, perhaps these are reasons now of sufficient detail and routine to prompt public officials to probe MHI and/or their dominating brands. Time will tell if federal or other sources press MHI, and/or their dominating brands, on legal issues that could mean prison and/or fines for those found guilty of such outrageous behavior and incredible lack of success for manufactured housing in the 21st century.
Our thanks to you, our sources, and sponsors for making and keeping us the runaway number one source for authentic “News through the lens of manufactured homes and factory-built housing” © where “We Provide, You Decide.” © ## (Affordable housing, manufactured homes, reports, fact-checks, analysis, and commentary. Third-party images or content are provided under fair use guidelines for media.) (See Related Reports, further below. Text/image boxes often are hot-linked to other reports that can be access by clicking on them.)
By L.A. “Tony” Kovach – for MHProNews.com.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing.
For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.
This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.
Connect on LinkedIn: http://www.linkedin.com/in/latonykovach
The text/image boxes below are linked to other reports, which can be accessed by clicking on them.
Darren Krolewski, MHVillage-MHInsider ‘One Challenge is Not Enough Positive News About Manufactured Housing to Counter Negative’ News; Frank Rolfe, Brad Nelms ManufacturedHomes, George Allen, Kurt Kelley, Sunday Headlines Review – Facts & Analysis