The Masthead

Do you want to grow your business by 400% to 1600%? Want the simple tool to help make this happen? Well, then, please read on!

The Summer of 2010 has been a busy one for many of us.  We may not be selling all the factory built homes we desire, but we’ve made some marginal improvements during a time that housing in general continues to struggle.   We’ve seen a dizzying array of issues face our Industry, from finance, to regulatory and more.

Let’s be candid, we could use some help on Capitol Hill!

During the MHI Summer Meeting, Thayer Long said that over 80 Industry Members made personal visits to Congress.  A lobbyist – as well as Congressional representatives and their staffs – have expressed to me how important it is for your Senator or Congressman to hear from you, personally.  Lobbying is needed in this day and age.  But no one does it like YOU can do it.  A letter, fax or email from you to your Congressman or Senators can have an important impact.

MHARR and MHI have both advocated ‘engagement’ with Congress during this critical period of time for our Industry.

With the above in mind, I put together the message that follows. This was done with some very helpful polishing assistance from our Associate Editor Catherine Frenzel, whom I hereby publicly thank and acknowledge for her many contributions behind the scenes to our ever improving efforts at MHMSM.com.  I sent this off by email and in one case also by fax to each of the three who represent me.

I share the guts of it for your consideration.  You are welcome to use this, or elements from this, in your own outreach to Congress.  I won’t say this is comprehensive, it doesn’t touch on the SAFE Act issue for example.  But what it does is outline a variety of points that are important for us to achieve our potential as an Industry!

I am mindful that last month, we flooded the FHFA with “thousands” of comments!  There were so many, that it reportedly shut down their email posting system. Let’s approach Congress with that same type of vigor.

Take 20 minutes to an hour, and just do this.  Reach out to your Congressperson and your two U.S. Senators.  Please, do it today if you can, but don’t let it fall off your radar.  You are in this Industry.  You have associates whose jobs depend on this Industry.  Think, we could grow 400%-1600% by some estimates, if these items are addressed successfully in Washington.

That should be all the incentive that you and everyone who works with you needs.  I guarantee you, that if Congress gets floods of messages, like this, or in your own words, we will see action in 2010. I personally sent this on our letterhead.

==>  Here’s the meat Tony sent to U.S. Legislators.  Feel free to use it. <==

Dear Congressman/Senator

I am a resident of Glenview, IL and a member of the Manufactured Housing Institute (MHI), an industry trade association that is based in Washington, DC. I am writing you today as the publisher of Illinois-based Manufactured Home Marketing Sales Management trade magazine (www.MHMSM.com), the Industry’s premier news and views resource, with 30,300 readers in July 2010. Our readers include owners, executives, association leaders and management of companies with more than 500,000 people still working across the U.S.

I have been working in various aspects of the Manufactured Housing Industry since 1981. To my recollection, we have never faced so many challenges as an Industry, as we do now.

We need your help, please!

INTRODUCTION

Danny Ghorbani, president and CEO of the Manufactured Housing Association for Regulatory Reform (MHARR), has stated in interviews with us that the industry has many friends on Capitol Hill. In fact, he has told me personally that we are “a dream industry” and loved by many elected officials, because we provide affordable quality homes for people of low to moderate income; we do so without subsidies and can also serve people of any income with appealing, safe homes that cost some 30-40 percent less than conventional construction. In states such as Texas, manufactured housing has provided as much as one-third of all new housing starts, but due to financing and regulatory challenges, we have slipped from a high of more than 372,000 homes in 1998, to just under 50,000 new homes sold by manufacturers in 2009.

At precisely the time that our great nation needs more jobs and affordable, quality homes, our Industry faces serious challenges. Congress has given the industry great legislation such as the Manufactured Housing Improvement Act of 2000 (MHIA 2000), FHA Title I Reform and the GSE’s “Duty to Serve” underserved markets provision passed in 2008. Yet implementing this legislation has been a real issue.

There are voices in Washington who now say we should turn away from supporting home ownership, and turn instead to providing support for rental housing. Where is the logic in that thought? Someone has to own a home, be it a rental or owner occupied! Support for rentals is like saying we will pump money into the hands of those who have it – the landlords – rather than give millions an opportunity to own. Those millions could build equity and improve their lives if affordable housing is made available to them.

The problem with the mortgage meltdown was due in part to forces putting people into homes they couldn’t afford, due to terms and qualifying that were too lax or counterproductive to long-term ownership and economic interests. But the idea of home ownership should not be discarded because of a breakdown or abuses of the system. That would be like saying that we should jail honest citizens because some people commit crimes.

Rather, the answer is that we need to create jobs through the availability of affordable quality homes! The manufactured housing industry, which has served the nation for decades, provides the answer.

THE CHALLENGES

Before addressing specific issues, let me paint a picture for you of what America faces and why manufactured homes and factory built housing in general makes so much sense.

1 The U.S. population is growing larger.

Based on the middle-series projections, the nation’s population is projected to increase to 392 million by 2050 — more than a 50 percent increase from the 1990 population. See: http://www.census.gov/population/www/pop-profile/natproj.html

2 The U.S. population will be older than it is now.

In all of the projection series, the future age structure of the population will be older than it is now. The last of the Baby-Boom population will reach age 65 in the year 2029. By that time, the Baby-Boom population is projected to be only about 16 percent of the total population. See: http://www.census.gov/population/www/pop-profile/natproj.html

3 The U.S Housing stock is aging.

The median age of US Housing Stock is 36 years. See: http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-138 (July 1, 2010)

An early report shows that the median year American homes were built was in 1969.

Most American housing is located in metropolitan areas; www.huduser.org/periodicals/ushmc/fall00/summary-2.html

Age, Size and Equipment Characteristics of U.S. Households: More than 90 percent of the current U.S. housing stock was built before 1990. See:

http://eetd.lbl.gov/ie/pdf/LBNL-43640.pdf

When we think about the lower energy standards of those older housing units, and the fact that many homes are 70-100+ years old, there is no question that American housing needs updating.

4 The current economic instability means lower earnings for millions of Americans.

President Obama has twice gone to Elkhart, Indiana, where unemployment is among the highest in the country. Elkhart is also home to many manufactured housing producers. The promise of jobs that were made there could be kept by providing the necessary political and regulatory support for manufactured housing.

VIABLE SOLUTIONS

To me and thousands of others in our Industry, when we look at the facts, we see a picture that says this:

• The real driver behind the U.S. Economy for decades has been housing.
• We need housing for a growing population. There is likely to be a large demand for smaller houses and more affordable houses
• We need to replace housing that is aging or in poor condition, including 2 million pre 1976 mobile homes (i.e., pre-HUD Code).
• As the population ages, we will need more single-level and affordable housing
• Only manufactured and modular construction of homes can rapidly meet the needs of the nation during a disaster.
• We need jobs, we need manufacturing…
• …so we need manufactured housing now more than ever!

We in the manufactured housing industry have production; we have an energy-efficient and affordable quality product. We have customers; we have demand. So the problem is not in our industry – it found in various bottlenecks is in Washington, DC.

WHAT CAN CONGRESS DO TO HELP?

HUD’s Teresa Payne told the MHI members at our Summer Meeting in Washington, DC this past July 13-15th, 2010, that “Manufactured Housing Still Rocks!” See

http://www.mhmarketingsalesmanagement.com/blogs/tonykovach/manufactured-housing-still-rocks/

That said, here are issues that in many cases have been hampered in Washington, DC, that are crying out for Congressional action.

1. Financing is the key to any big ticket sale. Financing helps retailers sell more new homes, and proper financing would help consumers re-sell used manufactured homes. There are currently some 20,000,000 such home owners in the U.S. and cutting off financing to them is like trapping them in their homes, should they need or want to sell. The next two points could specifically address this critical need for the Industry and the millions of people it serves.
2. GSE’s “Duty to Serve.” Congress passed this in 2008, and the GSEs have stonewalled. Let me share an analogy. If a citizen fails to abide by the law, we get fined, jailed or perhaps strung up! How can the FHFA fail to move on getting the GSE’s to implement the will of Congress?  What is the consequence for ignoring the law?
3. FHA Title I reform. The standards and rules that FHA has put in place will allow only the largest lenders to do FHA loans, due to the high capitalization requirements. While there are efforts underway to move this ahead, Congressional intervention could speed the process.  Letters from the House and Senate to FHA on making the entry requirements for lenders on the Title I Program could make a difference!
4. SBA Floorplan lending. Congressman Joe Donnelley of IN is seeking bi-partisan support for a measure to extend and improve the SBA floor plan lending program. Without wholesale (floor plan) lending, many retailers, developers and community operators simply can’t purchase homes from factories to display for retail buyers to see them. Donnelley’s measure could aid the industry considerably in this practical need, along with giving similar support for the RV and the Automotive Industries. H.R. 5734. The companion bill was the Small Business Lending Fund Act of 2010, Sen. Mary Landrieu, D-La.
5. Passing the Energy Efficient Manufactured Housing Act. Senate Energy and Natural Resources Committee adopted the Energy Efficient Manufactured Housing Act (S. 1320). The House passed companion legislation (H.R. 5019) in May. This would help replace older mobile homes, – i.e., those factory-constructed houses built prior to the passage of the HUD Code for manufactured housing went into effect on June 15, 1976 – with new Energy-Star-qualified homes. This helps the most poor and elderly.
6. MHCC and HUD. MHARR has expressed grave concerns that the intent of Congress in creating the Manufactured Housing Consensus Committee (MHCC) is being neutralized by HUD. I’ve personally spoken with members of the MHCC, who echo MHARR‘s Danny Ghorbani’s concerns. If regulators are allowed to push forward any regulation without an effective voice for consumers and manufacturers, then regulators – no matter how well intentioned – can de facto wreck havoc on the Industry they regulate. HUD should have a clarification of the intent of Congress in passing the MHIA of 2000, which clearly spells out the fact that HUD must go through the MHCC process and can’t impose its will outside of and apart from expressed approval the MHCC process. Some regulatory issues now pending, include:

• RE: RIN 2502-A172 Manufactured Home Construction and Safety Standards, Test Procedures for Roof Trusses
• Docket Number FR-5295-P-01; RIN 2502-A183 On-Site Completion of Construction of Factory Built Manufactured Homes.

1. It should be noted that the intent of Congress was to make manufactured housing performance based, as opposed to a proscriptive code. This would allow for technological advances to move the Industry ahead, control material waste and costs and give the best possible product to the consumer. The MHCC process was supposed to foster that, but as noted, a discussion with a number of MHCC members indicates that HUD is now trying to effectively over-ride/neutralize the Committee, contrary to the intent of Congress in passing the MHIA of 2000. Let’s not hamstring American ingenuity.  A letter to HUD on this issue from your office would be helpful.
2. Federal Pre-emption of HUD Code Manufactured Homes. Pre-emption simply means that the federal HUD Code pre-empts local building codes. This was a marvelous idea that dated back to the original passage of the HUD Code by Congress back in 1974. Pre-emption – in theory – simplified and reduced those costs for construction that were mostly regulatory in nature. I say ‘in theory,’ because practically speaking, local jurisdictions often ignore pre-emption! Nor does HUD often impose its authority in those cases where pre-emption is ignored. Let me give another analogy to make this point. If the FBI shows up at a crime scene and asserts federal jurisdiction, the local law enforcement agencies have to stand aside. The same should be true with the HUD Code for Manufactured Housing! Local jurisdictions don’t attempt to over-ride HUD on fair housing laws, why does HUD allow it with respect Manufactured Housing? A letter to HUD asking them to enforce federal pre-emption may set the stage for more vigorous action by HUD when state or local jurisdictions ignore federal law regarding manufactured housing placements and related regulatory issues. The widespread use of the HUD Code could and would flourish if pre-emption and the points made above would be enforced.

MYTHS

There are many myths about manufactured housing that we have tackled in various “Industry in Focus Reports” by our Eric Miller.

• http://www.mhmarketingsalesmanagement.com/industry-news/industry-in-focus/723-hurricane-risk-prove-manufactured-housing-safer-bet

• http://www.mhmarketingsalesmanagement.com/industry-news/industry-in-focus/696-tornado-caused-more-destruction-to-conventional-construction-than-to-mobile-or-manufactured-homes

• http://www.mhmarketingsalesmanagement.com/industry-news/industry-in-focus/739-insurer-study-on-manufactured-homeowners-provides-insights

These require a free sign up and login, which is linked below:

http://www.mhmarketingsalesmanagement.com/user-registration

The point is that today’s manufactured homes are not yesteryear’s ‘mobile homes.’  They should no longer be treated as mobile homes, they should be treated on par with conventional housing!  America needs this industry, and you and Congress have an opportunity to support a jobs creation simply be supporting the items noted herein.

SUMMARY

I could summarize the news stories above by saying that insurance, university, government and other studies prove that today’s manufactured housing is stronger, smarter, safer, stylish and offers major savings. Today’s Manufactured Housing (as opposed to pre-HUD Code mobile homes, those houses built in factories prior to June 15, 1976, when the HUD Code for Manufactured Housing took effect) is in many ways superior to conventional construction. It is greener than conventional building can be. Size for size, manufactured homes are more energy efficient and less costly to maintain. Manufactured homes create jobs, and offers affordable housing to millions of Americans.

To show the potential appeal for today’s manufactured homes, you can visit our photo gallery at:

http://www.mhmarketingsalesmanagement.com/photo-gallery

The point is this. The Industry has lost dozens of manufacturing facilities. It has seen what once were its two largest HUD Code manufactured housing builders go into bankruptcy, along with many smaller manufacturers that have vanished. Had Congressional legislation been properly implemented, much of this could have been avoided.

In our July 2010 interview with Congressman Walter Jones (R-NC), he stated to us that

1. Congress can issue letters to regulators.
2. It can hold hearings.
3. As needed, it can pass legislation.

There are some items that need a vote or co-sponsorship of legislation that is ending. At the very least, House or Senate Members can send a letter saying, ‘What gives?”

We need some of each of these actions – from you, please.

Twenty million Americans who live in manufactured housing or pre-HUD Code mobile homes and the 500,000+ jobs the Industry represents are counting on your support. Please let your voice be heard and take action on any of the points outlined above.

Write your Congressman

Write your Senator

Thank you.

Respectfully,

L. A. ‘Tony’ Kovach

Publisher, http://www.MHMSM.com

tony@MHMSM.com

847-730-3692

This will be a lengthy report, so let’s do a quick executive summary of the points to be covered:

1. FHFA Comments follow up.
2. Congressman Walter Jones review
3. MHI Summer Meeting Report on the Washington, D.C. Finance Meeting with Gov’t Officials and Industry Players.  This may be the most important depth – eye witness – report on this topic you will find.

With those points made, let’s get started.

1. FHFA Comments follow up.

Let’s begin today with a brief note of thanks to all who sent messages last week to FHFA and to your Congressional representative and Senators.  What is the outcome?  Time will tell, but let me share what is known at this point.

As of 4:52 AM on 7/28/2010, there are exactly 140 posted comments on the Enterprise Duty to Serve Underserved Markets (75 FR 32099) Notice of Proposed Rulemaking.  As their site shows, these are comments posted to 7/20/2010.  By 1:47 PM on 7?28/2010 those numbers had grown to 216.  All of these results were for comemnts sent to 7/20/2010.  Here we are 8 days later, and there were 2 more days of comments.  What happened those last few days before the comments cutoff?

We hope to verify this soon, but one reliable source tells us that ‘thousands’ responded to this industry wide call for action! We are also told that the FHFA’s system of online reporting got swamped and they couldn’t keep up with posting the follow-up messages from good people like YOU who want real Financing for the MH Industry!  If that report is accurate, that could lead to good news indeed for all involved.   Learn more here at MHMSM.com as the facts develop.

Presuming this report is accurate, that means that many Industry professionals – and customers of our industry?! – took the time and effort to make the needs known loud and clear in Washington, D.C..

This effort ‘started’ publicly with a call from MHARR, followed by a series of ‘call to action’ messages from MHI, all of which were reported here in complete detail at MHMSM.com.

Many state associations, individuals and businesses had their own initiatives to ‘rally comments for financing’ – I’d like to note Greg O’Berry from Hometown America and also Ken Rishel of Precision Financial/Chattel Finance News for their respective efforts.  Our team and I at MHMSM.com personally took to the time to write, and many of us made group and individual efforts to encourage our circles of influence to act.  The bottom line is, that if this effort indeed rallied ‘thousands’ of comments, there are many, many leaders who can share in the credit for this accomplishment.

All of this was covered and encouraged right here at your pro-Industry media source, MHMSM.com, in podcasts and in writing online.

So while this is still a work in progress, the government offices are bound to have taken note of this outpouring during an election year.  Those on Capital Hill likely got a similar message.  Government action is rarely an overnight event, but all of this brooks well for enhanced financing options for our Industry in the months ahead.

We at MHMSM.com will keep you abreast of all these events and others that are taking place in our Industry.

To all who picked up phones, sent comments and messages, contacted FHFA/Congress/Senators, kudos and thanks!  I am confident such efforts help make a difference.  Hats off!!  :-)

As a closing thought, while the comments period has closed, there is absolutely nothing to keep those who haven’t written in from doing so.  While they are not ‘official’ comments, they are still comments that will be noted by FHFA officials.  I’d also strongly encourage all those who haven’t written their Congressional representative and Senators to do so.  There is no time limit on contacting them.  The more they hear from the rank and file to management up to the executive suites of our Industry, the more likely we are going to get the financing we need and deserve.  Sound off.

Here is a link to contact your congressional representative and Senators.

2.

Congressman Walter Jones review

In last week’s exclusive Industry In Focus interview, the Honorable Congressman Walter Jones made many important points about the Safe Act, financing, his positive impressions of manufactured housing today and more.  One of those more items was his clear message to encourage the very types of engaged efforts we just reported to you above.  “Educate and Engage” might have been one summary from this interview, it is worth your time to revisit this and share the link with those in your circle of influence.

Link to Congressman Jones Industry In Focus Report:

http://www.mhmarketingsalesmanagement.com/blogs/industryvoices/an-mhmsm-com-industry-in-focus-interview-report-with-the-honorable-congressman-walter-jones-r-nc3/

3.

Financial Summit, Part 2, held at MHI Summer Meeting.

3. MHI Summer Meeting Report on the Washington, D.C. Finance Meeting with Gov’t Officials and Industry Players

After the Elkhart IN meeting last June 2, 2010, many voices in the Industry opined that the Congressman Joe Donnelly backed finance initiative was a start, but needed much more work.  Many called for a follow up to get deeper into the nitty gritty of the various issues.

That nitty gritty follow up took place Thursday, July 15 as the last – and key component – of the MHI Summer Meeting in Washington, DC’s L’Enfant Hotel.

The Financial Summit, Part 2 meeting was an hour and 47 minutes of discussions with officials from government agencies representing the FHFA and HUD, and industry leaders from lending, manufacturing, land lease community operations who are doing in house chattel financing, retailing and MHI staff. As an MHI member, I was invited for  MHMSM.com, so that you could get the feel for this critical confab provided below.

It is not my intention to parse this meeting or ‘rate it.’  I do want to commend all who made this happen, as the need is clearly great and because the lag time between the June 2 Elkhart MH Financial Summit and this meeting was relatively short.

What will follow are refinements from notes taken regarding points discussed.  This will flow as the meeting itself flowed, so you will have more of a ring side seat to what took place.  As the meeting lasted close to 2 hours, a long narrative follows.

Vicki B. Bott, Deputy Assistant Secretary HUD sat at the ‘head’ of the rectangular configuration of tables, along side Finmark Marketing Associates’ Richard “Dick” Ernst.

Ernst reminded all that the parties were not meeting with any intent or purpose to violate anti-trust laws.

The meeting, I’m told, was requested by David H. Stevens, Assistant Secretary for Housing and Commissioner for FHFA.  I’d like to note here my thanks to Ken Rishel, who provided a number of his own insights about the event, which he attended.

After that introduction, the discussion rapidly moved to specifics about how industry lenders and manufactured housing land lease community operators handle repossessions, obviously with the idea of helping the FHFA craft a program that will yield long term loan performance.

The first specifics discussed included such points as:

1. Selling an asset (manufactured home in repossession) wholesale vs. retail.
2. What are the real loses per unit sold
3. How an issuer needs assets
4. How does chattel move through the pipeline from repossession to resale?  How difficult, intensive and expensive is it?

A FHFA official asked, what can make the loan more secure? More down payment?

The reply came back that it is ‘the survivors who are in the room.’ The problems of the past were caused by people who are gone, the bad apples have left.  Then the statement reply was completed with the notion that of course, down payment does matter.

Another industry veteran pointed out the importance of staying on top of (collections), and that they viewed their collectors as truly being ‘financial counselors.’ It was a proven fact that rapid and early intervention by such counselors could keep a loan from going into default.

Anyone below a 580 credit score is 10% down.  Another voice concurred, “I would endorse that call.” In addition, the statement was made that they should add 100 to 125 basis points to their loans, as it is that service intensive.

Loss mitigation was the next topic.

Put the onus on lenders immediately. The earlier you catch it, the more successful you are going to be (meaning, at catching and saving a delinquency). Treat Title II and Title I  clients the same as conventional mortgage customers.

For loans underwritten at Triad Financial, 100% phone audits are done on all closings.  In addition, there is another 15% random audits by an outside contractor.

The statement was made the one should never get away from “full docs.”  “We did that 10 years ago,” while the conventional housing mortgage industry moved away from that, in what was part of the problem in the recent mortgage/banking crisis for stick built homes.

The question was asked by HUD’s Bott, “What is the most typical fraud?” The reply, was “Falsified down payments and undisclosed buy fors.” What is a buy for?  When a relative or friend makes the loan for a third person, came the answer, and you wouldn’t see that on Title II. The implication was that it could occur on Title I lending, if caution and preventative steps aren’t in place.

Verifications are permanent, debt to income.  620 score on Title II.  There is plenty of data to share so we can all know what performs at what level.

Paul Nichols with Vanderbilt Mortgage and Finance said, ‘We’ve got good rate on Title I loans.’

Another voice commented that the down payment assistance on Title II allowed them to pull out data (on performance).

DTI (debt to income) are straight per ‘the regs.’ The comment was made that ‘Rural placement impacts loss severity.’ Bott with HUD was asked, do you look at data that way? How does USDA portfolio stack up?  Vicki said that the USDA performs better.

This was followed by an observation that loans should be compared ‘rural to rural and urban to urban, when making comparisons and measuring loss severity.

Assure is it location vs. property type.  Compare down payment vs. delinquency rate, and credit scores vs delinquency rates, for example 580s vs. 620s.

The statement was made that USDA program (overall) has a lower level of delinquency than FHFA – even though there is no min credit score USDA, and you can roll in the closing costs.

Greg O’Berry from Hometown America said that manufactured housing land lease community operators are  “Not afraid of  the issues.” The reason for this is because, we are “Very close to our customers when they go delinquent.” In their program, they only make fixed rate loans.  They have a 580 credit score cut off.

O’Berry also said they are licensed  under the Safe Act, have a portfolio of 250M in loans, with some 5000 loans outstanding.

Some of the elements of underwriting included:

• Centralized underwriting functions
• Loan origination outsourced
• People on site fill out ap – send the ap – self service

David Lentz from American Land Lease (Green Courte Partners) stated they used an outsource servicer, they are a community owner and lender too.  One key noted was to get involved on the delinquency early and to monitor the collateral closely, which is readily done in a manufactured home land lease community setting.

Kevin Clayton stated that they had ‘no incentive to move to a particular lender.’

Tim Williams with 21^st Mortgage stated that when “Repo time,” came, people “generally abandon house.” Once they are “60 days behind, they walk away…Our debtor has moved on, found another place to live, because they couldn’t keep house.”

The question was asked, how long does the foreclosure cycle take?

The reply was, in some states faster, in others slower.

Average delinquency 60 days on repos, with loss mitigation being doable in a manufactured housing community. There is no 12-18 months to obtain your collateral in the MH industry, as compared to what might take place with conventional housing and mortgages.

What causes are the typical causes for repossessions?

David Lentz: “Just know, you just know, personal: divorce, job loss, etc.” Knowing what is happening in your community helps mitigate losses.

Another observed that when you lend to lower standards, those lending their own dollars have a definable risk.

Lending can contain or mitigate risk, higher frequency of repo, but good loss mitigation

Keeps it significantly less expensive.

FHFA should allow, if possible, to keep the home on its current site.

Greg O’Berry said that at Hometown America, a repo resold and was income generating again generally within 6 months.

Vicki Bott: ‘So it is more like a condo, it depends on how well community operates…’ to which David Lentz replied, “It is our product.”

The tongue in cheek statement was mad that the trends were stable for those in the room without “Berkshire Hathaway money,” which was met with a warm round of laughter.

Dick Ernst:  Private investors and community banks, like 680 to 700 scores.

But the heart of our industry’s business is the 620-680 customer.  That risk can still be managed. “This is where FHFA can help.”

Bott replied: FHA wants some of the TOP part, not just the bottom, of the credit profile.  They want the bell curved shared shared out FHA Title I loans.

Paul Nichols with Vanderbilt stated that, “Tim (Williams, 21^st Mortage) and I are full spectrum credit buyers, buy it right, price it right. 100% recourse.’

The comment was made that on private property setting, that the “private site cert is an aggravation for retailers, and ads no value at all.”

The observation was made that on the retailing side, home centers get customers – Title I and GNMA – offers great interest rate, sales center reps go to that of course.

Raising loan limits (on Title I) helped.  Parts of program don’t help customer of performance.  It was noted that:

• Get opposite of adverse selection.
• Get a building  permit – good proof.

Limit on land home for Title I were still an issue.  Land & site with only $20,000 for the property and improvements usually meant it wasn’t as desirable a site, since you could easily invest 10-15k for a well and septic.

Kevin Clayton noted that many customers want 5/12 roof pitch and such aesthetics.

Another pointed out that most retailers are survivors too.  They tended to be strict, work with better customers, went for the best financing, the simplest loan, lower rates and stay away from “onerous stuff.”

Joseph H. Stegmayer, the Chairman, President and Chief Executive Officer of Cavco Industries, Inc. said that it was important to service the home after the sale.

The ‘Manufacturers must stand behind product, that’s beneficial to consumer and lender, and it has actually occurred, that’s not a marketing pitch.’

A number of rapid and generic observations followed from various participants.  Among them were:

• Conventional financing?  There is no mortgage insurance.
• If you make a request for bottom 25% that is what you will get.
• Appraisals require 2 Manufactured home (comps), but the lender may layer on requirements beyond (gov’t) minimums.
• Manufactured home values were a topic, with a lender stating that “As bank, I’m getting resistance to appraisals.”
• Title II with good customers could get appraisals.
• Under Title I, the “Advance calculation method works pretty well.”
• One issue in rural settings was getting 3 comps.  Even if you get them, in the country, you may have one property with ½ acre while another has 25 acres.

Vanderbilt and 21^st Mortgage observed that when it came to dealing with repossessions, they typically wholesale.  They have a list of buyers, website, marketing group, hot list of community owners and retailers. Park owners tend to buy the homes, which are often in a land lease community already.

While you may be able to sell a repossession for more at retail, when you sell it where it sits, what you do is the math.

An example was given where a home would wholesale for $35,000.  The same home might retail for $50,000, but if it costs you $15,000 to get it ready, plus the time, hassles and unknowns, you as a lender may be better of wholesaling the home.

Another point was made that the quality of customer is better for retail vs. wholesale.

Bart Mize, with 21st Mortgage, stated that a common ratio might be to wholesale 65% vs. 35% retailed.  The cost to physically pick up a repossessions was a factor, when $1000 might be allowed for moving, while the actual cost could more like $3000-$4000.

The observation was made that the last thing you (FHA) need is undisciplined lender.  Wholesaling is a known risk, retailing had more variables and thus was a greater potential risk in handling a repossession.

Bidder buys as is where is, given a 10% commission when retailing it.  The ‘numbers tell you what path to take,’ be it wholesale or retail.

In discussing scenarios, the requirement for the program as proposed of $10 million dollars plus an additional 10% ‘Is an over-reach.’

In discussing how credit files are viewed, some of the following points were made:

• Medical collections, let those go.
• “Thin files” – credit files with not enough to trigger some FICO, tended to perform reasonable well, better than loans with scores under 600.
• 7-10% of loans have no credit score.  Have some credit, but not enough to generate a score.
• On such files, they often asked for more than 5% DP, depending on job time.
• Typically lend to those with some type of credit history.

Regarding titling, the statement was made that they should just do title work in house, educate title contract issues.  There was some interest in the idea of coming up with a national titling department, with the suggestion of ‘working with Thayer (Long of MHI) on the claim side.’

The meeting drew to a close with a number of general comments, such as:

• comments about using online systems for appraisals,
• the use of the NADA book in given scenarios
• Land Home’s Tony Wicke saying that it may take 1 to 5 weeks for ‘FHA to get out there.’
• 21^st and VMF noted that some areas have no appraisals for home, lenders input good , use NADA book value in a timely fashion
• Inspection delays could be addressed with online systems, getting a copy of data plate or HUD # which is ‘pretty fool proof, and doing what we do on conventional side.’

Vicki Bott thanked everyone for attending, as they were ‘about out of time.’ # #

L. A. ‘Tony’ Kovach

www.MHMarketingSalesManagement.com or www.MHMSM.com

tony@mhmsm.com

847-730-3692

“Manufactured Housing Still Rocks!” with those words, Teresa Payne addressed the crowd at the busy L’Enfant Hotel solarium this morning, July 15th, an apt summation of this important MHI Summer Session meeting.

This will be the first of a series of reports you will find exclusively here on the Masthead blog, in articles by our MHMSM.com Industry In Focus Reporter Eric Miller’s articles and on our Factory Built Housing News at Noon podcasts by Erin Patla.

We want to start by taking hats off to Thayer Long and the rest of the dedicated MHI staff who worked hard to make this a productive and informative series of meetings. Much more on those staff members and committee leaders work in future reports.

Some of the items you will see in the days ahead will include details on::

• Over 80 visits by Industry professionals with Congressional members took place during the afternoon on Capitol Hill Wednesday, July 14.
• A reception held on July 14 with Congressional members and staff present, to informally meet with MHI members. We plan a series of exclusive follow ups with various members of Congress here on our pages (see sample photo below).
• Discussions on key topics such as financing, the SAFE Act, regulatory issues and strategy sessions took place. MHMSM.com plans to ask industry experts for their input on the technical topics, as part of our post-meeting coverage.
• Meetings with FEMA officials, as a prelude for what can result in new business for manufactured housing and park model home builders took place.
• Meetings and presentations with HUD and DOE officials took place. Individual reports will be found on our media site in the days ahead.
• A meeting with federal Rural Housing officials took place, to brief MHI industry members on how more retailers can tap into zero down payment financing on manufactured homes, not ‘someday,’ but right now!
• Systems Building Research Alliance report on a cost effective frost free foundation system approved for Manufactured Housing.
• SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). Yes, there are opportunities, as a good look at this flash report suggests.
• MHI PAC and other MHI division reports.
• MHEI’s plans to collaborate with Manufactured Home Marketing Sales Management.com (aka MHMSM.com) trade journal to sell book, videos and possible other cross marketing and cross promotional efforts.
• HUD’s MH Program Associate Deputy Assistant Secretary, Office of Regulatory Affairs and Manufactured Housing, Teresa Payne comments at the meeting, as well as those of Elizabeth Coche and other officials associated with HUD and the new office for consumer financial protection.
• Past and present Congressmen who addressed the Industry personally at this meeting and who attended the Industry reception.

…and much more as well!

In short, this was a busy, busy 3 day session indeed! Among the items we plan to look at in more depth:

• The proposal by an association leader that the industry consider putting all of the current issues pending before the government into a new single piece of legislation, which this member proposed as the Manufactured Housing Improvement Act of 2010 (or 2011, etc.). The concept – suggested in one of the meetings – would be designed to take a more pro-active approach on Industry issues, and to combine efforts into one bill rather than take an issue by issue approach.
• Discussion on the proposal by a state association leader on a recent conference call, to create a focused lobbying presence on some key issues relating to regulatory agencies or Congress. The suggestion included the hope that MHARR and MHI could collaborate on this effort. While no commitments were made either way on this topic, MHI officials said they were open to ‘anything’ that would advance the cause of the Industry at large. There was also a statement and some concerned discussion that such a move not result in a ‘third voice’ for the Industry being created, if this proposal were to come to fruition.

A key feature of the meeting wasn’t even on the main agenda. This was a meeting after the meeting with key federal officials to discuss how the Title 1 and other government involved lending programs could be made successful through careful, collaborative input by experienced Industry lenders and other stakeholders, such as manufactured home community operators, manufacturers, retailers and others. This was apparently the direct result of efforts at and immediately after the Congressman Joe Donnelly lead meeting in Elkhart in early June, 2010.

As is our custom, in an effort for balance in our reporting, we contacted MHARR in advance of this trip and during my stay in DC as well, to see if we could meet for comments and discussions on key issues facing the Industry. Scheduling conflicts on both ends kept that meeting with MHARR officials Danny Ghorbani and M. Mark Weiss from taking place.

On another meeting related note, the release of the new book The Manufactured Housing Revolution was met with considerable interest and praise. The vast majority of meeting attendees took a copy. HUD’s Commissioner Stevens, Teresa Payne and Liz Coche all wanted autographed copies, we look forward to their private (or public!) feedback, along with comments from others connected with our Industry.

Speaking of others, George Allen plans to do a book review of MHMSM.com’s popular new The Manufactured Housing Revolution soon on his blog, We have already had some early and positive comments, and anticipate other reviews and comments on this timely volume.

It is also worth noting that the Consortium of Industry publishers had their second meeting on July 13th. More on that discussion with George Allen, Ken Rishel and the planned follow up with come soon.

When the bullet points of a two and a half days of meetings takes some 2.5 pages to outline, that gives you a small sense of how busy and varied the topics were! Again, congratulation to Thayer Long and the MHI team for making this happen. I’d also like to underscore the positive facts that Congressmen, HUD officials, FEMA officials, Rural Housing program officials and numerous staff for the proceeding made this a rich series of opportunities for Industry professionals.

This would be a good time to note that membership in MHI brings value to those who participate and attend such functions. Access to this level of Congressional and government officials is enhanced by participation and engagement via MHI.

We will strive to bring you reporting in the days ahead that will capture the keys to all that took place. For those sitting in those meeting rooms with an open and attentive mind, you would have to walk away with the impression that the Industry is trying to come to grips with challenging issues in a very direct and positive fashion.

If you haven’t already done so, please check out Hometown America’s Greg O’Berry’s post on a time sensitive topic, submitted yesterday evening and that went live the same day. Greg’s comments were a direct result of discussion during the National Communities Council (NCC) meeting. This would be an appropriate time for me to personally invite meeting attendees, public officials and MHI staff to consider sharing their perspectives publicly via our Industry Voices Guest Blog.

My personal thanks to all who took the time to share a few minutes with me, to the many who had positive or encouraging words to share about our MHMSM.com trade journal. In turn, I want to thank the dedicated writers and team members at MHMSM.com who made this trip for me possible, because good people kept the wheels of our electronic platform ever moving ahead! The reality of a solid team doing their respective functions well made my trip to Washington with family for this timely event a reality.

Hats off and our thanks to one and all involved! # #

We have what will no doubt be our strongest line up ever at www.MHMSM.com. Let’s rephrase that, this will be the Manufactured Housing INdustry’s strongest line up of articles ever in a single publication.

Innovation – Information – Inspiration for Industry Professionals

That’s a strong claim, but see who’s coming to these pages in 72 hours. Check out any other publisher now or ever, and see when you’ve had more star power, more serious topics and more insights in one issue. Never before!

—

First – exclusive ‘one on one’ interviews.

A Cup of Coffee with…
• Bill Matchneer
• Don Westphal
• Ken Rishel
• Eddie Hicks
• Cheryl Hardee
Our A Cup of Coffee with… are unique interviews that give you insights into the PERSON as well as digging into HOT TOPICS like Industry leadership, financing, image building and the Industry’s future. You’ll want to read each one and make sure others do too.

We now literally have authors from (last name) A to Z! From Adams to Ziglar and others in between!

Joe Adams – Marketing
Market Research and Your Customer

Rachel Biermann – PR & Marketing
Thrive During a Recession

Amy Bliss – Associations
Flight, fight or freeze

Chad Carr – Management Corner
10 Downside Tips

Tim Connor – Sales and Management
Tough Questions
Sales Strategies of Six Figure Income Salespeople

Nadeen Green – Attorney
FAIR HOUSING IS AS EASY AS ABC (Part 2 of 2)

Sue Frost – Financing
NEW GAME New Rules

Tony Kovach – Growing the Industry in 2010
Innovate or Duplicate
How Everyone Involved Wins

Susan Knowles – Development profit Center
Community Owners and Fiber Optics

Steven Lefler – Green factory-built home building
How we are changing the factory built home for the public one at a time

Shawn Mullins – Engineer and management
Process Analysis and Design – A Marketing and Management Perspective (Part 2)

Ricardo Morganti – Retailer
Attitude or Badittude

Greg McClanahan – Retailer and People Skills
Fact’s Verses Meanings

George Porter – Installation
Footing Forward

Ray Schmitt – Upscale Retailer
Yanee Point

Dave Shanklin – Community and Finance

Recession-Proof Housing in California MHPs

Kent Stichter – Design and Marketing
Riddle Solved

Bob Stovall – Marketing and Internet
PR-lead-generation

John Underwood – Sales
the Power of the Present, the Power of Now

Don Westphal – Community Corner

First Impressions

Stephen Wheeler – LLCs: Tapping Gov’t Funds for Rehabing Used MHs.
Financial Assistance for MH Renter & Homeowners

Zig Ziglar – Motivation
Zig On Good choices

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Our writers and INdustry Pros like you have made www.MHMSM.com #1. On the eve of our 6 issue, just about 72 hours away, we thank you for your support and encouragement!

Download those February articles now. Resolve now for you and your team members to take 10-15 minutes a day, every work day, and learn something new that will make your business stronger for the balance of 2010.

Learning and Applying an article a day will help keep the bill collectors at bay! Don’t forget our other blogs, with our new look.  Also keep in mind our 24/7/365 Industry and Housing news with star power of its own, Danny Ghorbani and Thayer Long to name but two …Bob our IT Manager has made it handier than ever. Take a look. ##

An Exclusive Interview with Doug Gorman

1. (Question from www.MHMSM.com by Tony Kovach for Doug Gorman). First, Doug, thanks for taking the time to do this interview. While you are widely known in the industry, please give us a brief background on your many roles and history in this industry, for those who may be new and don’t know you as well as they should yet.

My experience with the industry began in 1971 in the role of a consumer. My wife and I purchased a 12×60 three bedroom front living room which at the time seemed to have plenty of room for us as newlyweds. Shortly after that I went to work for the retailer who sold us our home and have been in the industry continuously since then. My industry work experience has included retail sales, sales center management, multi-location retail management in the Southeast and the Southwest. Field sales for manufacturing covering five sates in the Southeast, multi-outlet retail modular sales management and 22 years of owning a retail sales center in Tulsa, Oklahoma. I have served as the president of our state association in Oklahoma, chairman of MHI’s Federated States Division, chairman of MHEI, the sole retail representative to NFPA for five years prior to the creation of the Manufactured Housing Consensus Committee and for close to ten years now as a member of the Manufactured Housing Consensus Committee.

2. There is a lot of discussion going on in the Industry these days, and we’d like to get your take on some of those timely topics. For example, there is a new initiative out there to launch what is dubbed the MHIDEA, the MH Independent Dealers Association. What are your thoughts on the matter? What can you tell us about R E Crawford, George Allen, Ken Rishel and some of those backing or supporting that initiative?

I believe MHIDEA is a worthy endeavor and its creation is being undertaken by some of the most credible people in the industry. Retailers have numerous issues that can get lost in the broader efforts that are undertaken by MHI. I had hoped for years that the National Retailers Council (NRC) would serve that purpose, but I have not seen it materialize. I don’t fault MHI for that failure. The decline in retailer population has certainly been a factor and for that same reason could limit the success of the efforts around MHIDEA. The total retailer focus of MHIDEA may give it some strengths that are not inherent in NRC.

As a preface to the question that follow, Doug, let me remind our readers that personally and editorially, www.MHMSM.com believes in the strong potential of our industry’s future. I could point to virtually every article, almost every blog post that underscores that fact. But At the same time, we have to look at real world challenges and address them. Many today are scared. So the following are not meant to be ‘doom and gloom questions, but rather to get a feel for how your take on such industry issues as matters currently stand, and to understand what we face in order to address it properly.

3. George Allen is one of those gents that most people in the industry know, especially in the LLC world. Allen has written about what he calls a ‘perfect storm’ or a ‘conspiracy’ to kill HUD Code housing by choking off finance initiatives in Washington, such as implementation of the FHA Title 1 and the “Duty to Serve” passed by Congress in 2008, and what amounts to concerns over leadership from national associations on such issues. How would you respond to that type of concern from a respected and informed industry leader?

I do not have any specific knowledge of a conspiracy to destroy our industry. At the same time I find many of the actions taken in Washington are in fact resulting in driving up costs for our industry’s clients while reducing the financing options available. If it is a conspiracy, those responsible are being remarkably successful as we look at a 90% drop in industry shipments. I don’t read a lot of news coverage of any other industry taking a hit of that magnitude.

4. It seems obvious that manufacturers and retailers – and these days, retailers often means land lease communities (LLCs) operators – have a natural need for each other. What concerns do you feel as a respected retailer who has years of manufacturing experience over the steady decline in new home shipments? What do you see as the needs to turn that 12 year decline in shipments around?

Clients want what we build. They are denied the ability to purchase our homes in many cases because of zoning issues and because of the inability to obtain financing. The zoning concern has to be addressed at the state level to achieve significant success. Improvement of financing will most likely only be achieved through increased pressure from our representatives in Congress to improve the application of existing programs.

5. Some have speculated that we are looking at the end of the HUD Code industry by 2020, others have said 2016. I spoke with a senior executive in the manufacturing world very recently who told me there is maybe 24 months to turn the industry around or many/most of the factories will be gone. What are your thoughts on the time line, and why don’t we see more being done to impact ‘saving our industry’ now?

I would not dispute either of the forecasts mentioned. Our program is the only Federal building code for and is administered by HUD. As an industry we certainly have a very real danger of national shipments continuing to be so low that we become irrelevant in the scheme of the Federal budget. If that were to happen manufacturers would lose the preemptive benefit of the federal code. They could possibly continue production meeting various individual state codes that might exist, but the federal umbrella would be lost.

6. You have expressed in the past your viewpoint on Danny Ghorbani’s importance at MHARR, saying “The industry needs Danny.” Can you elaborate on that, please?

For many of the same reasons that retailers may feel a need for a dedicated retailer trade association, many manufacturers feel a need for MHARR. I have no problem with MHARR’s position that their exclusive objective is to monitor regulatory events as they may affect our industry’s manufacturers and ultimately the cost of the home to our clients. Danny Ghorbani has worked tirelessly in this regard for many years. I do not always support or agree with a particular tact or undertaking by Danny, but the industry does not have anyone else who so fervently monitors the effects of proposed undertakings by our federal government.

As retailers, we do not understand to any significant degree the possible impact for instance of the current efforts by HUD to increase monitoring costs through an effort intended to improve quality control. While I believe the effort by HUD is well intended, I am also aware from conversations with manufacturers that many unintended consequences will drive up costs with no corresponding benefit to our client. MHARR will seek to route these efforts through the Consensus Committee. In HUD’s defense, a proposal on this subject was worked on by the MHCC, but was not moved forward due to lack of information regarding costs.

7. We did an exclusive interview posted on my blog with Eddie Hick’s recently about his initiative to promote product placement as an image building tool. During that interview, Hick’s said, and I’m quoting: “Well, I don’t think we need to wait and get a group like MHI involved. In some ways, they’ve failed to move this sort of thinking ahead on the image building issue.” As someone active with MHI and on the national scene, how would you respond to that comment and concern?

I would support any effort that Eddie can take in that regard. His idea makes sense and he sounds like he knows people that can help him accomplish his proposal. I don’t fault MHI and I don’t think Eddie does either. It is a statement of fact that MHI has not gotten involved in the RV type image building campaign. MHI was confronted by an industry made up of companies facing enormous cash demands in the face of the previously mentioned 90% decline in shipments. Major industry players such as Fleetwood, Patriot, Wick and Champion would ultimately face bankruptcy. That scenario is a difficult setting for raising millions in cash for a national image campaign.

8. Doug, any other thoughts you’d like to share about needs and issues facing the HUD Code and factory built housing industry today? What are your reasons for being optimistic about the industry potential and future?

As an industry we face many challenges. The SAFE Act will drive up costs for our clients while reducing the number of lending options. New FHA guidelines will also increase the costs of financing and increase the amount of cash needed to purchase a home. The new appraisal guidelines that went in to effect on February 16th will make appraisals more difficult especially with those appraisers that do not understand our product or do not understand the difference between an entry level home and a high specification home.

The Duty to Serve issue needs to be pursued as it holds huge potential for our industry. The government needs to move forward to fully implement the FHA Title I program and in light of 3285 retire the current permanent foundation requirements of the FHA Title II program.

Many of the concerns noted affect all housing while others are specific to our industry. I remain optimistic because the consumers want what we are offering. No other housing segment can touch what we offer. I can sell a three bedroom, two bath home for less than $30,000 and I can offer a two story modular for under $200,000. Isn’t life grand? Now if we could just have a good drought.

Ever take one of those two week ‘mini-semester’ classes in college? Or do a workshop or seminar series live or online? Well, this posit is going to be even faster than those classes by a long shot! But it will introduce you to an important topic, and you’ll rapidly see the value and importance.

Cross Marketing is a form of synergy. It is working together to achieve the ‘win-win’ or as our writer Mike DuPure likes to call it, “The Double Win.” It employs elements of Tim Connor’s fine article on a related topic as well, what I learned as the ‘Rule of Reciprocity’ by psychologist Robert B Cialdini, PhD whose book Influence was called “A landmark publication in furthering the persuasion process.” per Jacob Jacoby, PhD, the Director of the Institute of Retail Management at New York University. Influence is a great read by the way, I recommend it. Cross Marketing is what savvy promoters do. You point the finger of praise at person A, they share the pat on the back with you.

When done sincerely and properly, Cross Marketing is amazingly effective.

Movie makers love to cross market. You see the names of the stars; Star A adds a pull that the other stars alone don’t get. As I’m writing this, I picked up a video off the shelf: Lethal Weapon 4. Mel Gibson, Danny Glover, Joe Pesci, Rene Russo, Chris Rock, Jet Li. There are many forms of cross marketing at play here. There was the original Lethal Weapon Movie (by the way, we could be talking about Rocky, Star Wars or any number of ‘series’ of movies). There was the original cast, the original stars – in the case of Lethal Weapon, it began with Mel Gibson and Danny Glover. In Lethal Weapon 2, Joe Pesci was added. In Lethal Weapon 3, Rene Russo joined in on the fun with the cast from 2. Each star, each ‘name’ brought new people in to fill the seats, the original ‘names’ already had a following of their own, and the movie series itself had its own following. Cross marketing. Synergy. Win-win.

As an interesting aside, do you think that the politics of each of these actors named above are the same? Not a chance.

Mel Gibson, for example, is strongly pro-life. In Lethal Weapon 3, one of the characters is wearing a ‘pro-choice’ t-shirt. But these professionals ignored parts of the story that contradicted their own beliefs, pulled together for a specific project and they set the other issues aside to complete their project professionally and successfully. The differing styles, religious or other belief differences, were all set aside. By making movies like Mad Max or Lethal Weapon, Mel Gibson earned millions that allowed him later to do what he wanted to that was more in keeping with his core values. The point of this aside is, you have to be able to set aside some things in order to achieve other goals that may be of importance! This ‘aside’ is in fact an element of cross marketing too.

Book publishers cross market all the time. You see an author, say John Grisham. He wrote The Firm, The Client, A Time to Kill and a whole host of other novels. You’ll see the name of other books by the same author on the jacket or cover of the latest book. This is a form of cross marketing. Trailers before a movie starts, is cross marketing.

Now bring these illustrations of cross marketing closer to home, by using the following example.

Let’s imagine your factory built housing business website as your ‘podium.’ You are in a room with some people. You state your message. That’s good. You tell people why they should do business with you. That’s good. You may even have a testimonial or two. Good as well.

But now, imagine this. Person A is on a different website, and they are praising you, or giving you a Pat on the Back from their website. Now, that has added power!

Says, who? Well check out this video (if you haven’t already) on Bob Stovall’s article list to see the stats. Social media, what some call Socialnomics is perhaps the hottest trend in marketing. I was walking in a nearby, upscale mall in a posh Chicago Northshore neighborhood, and saw this huge ad for a university, and where did they want to drive their inquirers too? Their Facebook page! Why? Because being on Facebook or Twitter is a form ‘social’ form of cross marketing. To millions it feels more like a third party endorsement than an ad does.

Imagine you open your store up on a busy street. That’s good, a whole lot better than some quiet side road that millions will never find. What can be better is to open in a busy mall. Lots of people are coming around, right? They may be coming for Store B, and all of a sudden, they find YOUR store, Store A, as they are walking by! That’s a form of cross marketing. But to take cross marketing one step better, the savviest of those store fronts do their own advertising and marketing. They want to bring you to THEIR store. They don’t just count on the mall’s message or the mall’s core traffic. Have you ever seen a dead store in the middle of a busy mall? I have. Dollars to donuts; that dead store is doing zero or close to it direct marketing. You don’t want to be at either extreme on the spectrum. Get that combo of direct marketing and cross marketing going, and everyone, everyone in the mix wins.

The modern ‘auto-malls’ or ‘magnificent mile of cars’ are a form of cross marketing. Back in the day, Shields Boulevard was an amazing form of it for manufactured housing! In the early 1980s when I got my start in the retail side of the manufactured housing sales world, Shields Boulevard had 52 retail centers (back then, we called them dealerships) on a 3 mile stretch on South Shields. Ma and Pa locations were next door or down the street from the ‘Big Boys’ and they were hoping their little sign – direct marketing in the midst of cross marketing – would attract people into their location.

So how do you cross market in our industry? On the business to business level, let’s take a look.

As was noted in a feature article on LinkedIn, and alluded to above, social networking is a form of cross marketing. Professionally and intellectually, an ezine or Manufactured Housing INdustry trade journal like www.MHMSM.com can be a platform for cross marketing too!

You see people writing here about a variety of themes. There are featured articles. There is our popular, new INDUSTRY VOICES Guest Blog. There are news items to bring readers, the photo gallery, press releases and a growing number of resources. Speaking of all of that, an association leader who I spoke to not long ago was telling me ‘Wow, it is amazing how much you information and how many resources you have up here!’ A company president said, ‘You’ve accomplished in a short period of time what _____(think, big name pro)_____ wanted to do but hasn’t pulled off yet.’ I am routinely pointing to our team of writers, volunteers and our webmaster Bob Stovall – because without them, this would be one person on a soap box; not the chorus of voices that we are professionally singing like Handel’s “Messiah!”

Do you think all of us agree on every little thing? We may on some items, but may not on others. Why would someone like Thayer Long, who heads up 75 year old MHI, why would he want to be here? Well, there are many reasons. Cross marketing is a nice phrase that can catch them all. But let’s look at the power of cross marketing for a moment, and use MHI’s Mr. Long as an example.

The Google search above was done at 8:58 AM 2.24.2010

Now keep in mind, that Thayer’s own website and a host of other venues would have his name. Yet, thanks to some SEO wizardry by our masterful Web Master, you see that many top ten results came from our interview called a Cup of Coffee with Thayer Long and also his TRENDS 2010 Survey replies. A win-win for all involved? As they say in neighboring Wisconsin, youbetcha.

Another well known industry personage recently joined our ranks whose name is well know, whose cross marketed with others too. Chad Carr of Rainmaker software joined just about 2 weeks ago, and already his writing with us ‘pays off’ in the form of good cross marketing and good SEO (Search Engine Optimization).

Google search done at 6:42 PM, 2/24/2010

These are examples of the power of cross marketing.

Now let’s go back to our examples. You may not be impressed by Writer X, they may not connect with you for whatever reason. As a quick aside, I learn from every Industry writer, even if I may disagree with some part of what they are sharing. Why? Because they give me a fresh perspective! They can keep you or me from getting locked into a straight jacket of thought. I’ve often gotten ideas that paid off handsomely from someone I disagreed with, by analyzing their position or method, and then refining it into something that worked for me or my clients. Equally important, sometimes that person that I thought was ‘wrong’ turned out to be dead-bang right! Okay, so Writer X may not connect with you, but Writer A or B does! Writer A or B may or may not know each other, but the reader traffic that Writer X attracts can help them both.

Sometimes Writer A will look better to a given reader precisely because Writer X is in the mix.

Remember, since your tastes, mine and the next person’s differ, this isn’t about ‘better’ or ‘worse’ it is about some writers ‘connecting’ more with a segment of readers than another. To go back to our hit fiction book author John Grisham, noted above, some people love his work; others would never pick up a book written by him again. Go figure. But a good book store – which deals in a type of cross marketing by offering a variety of authors, genres, etc. – gladly features Grisham, even knowing he won’t connect with everyone. Different strokes for different folks.

I plan to do at some point an article about writing and its power, but hopefully these ideas also suggest a start to that timely topic. We’ve all heard that “the pen is mightier than the sword,” well if so, then the Internet’s Ionic Pen is mightier than that Bic pen will ever be! I’ve got a thin volume on my shelves entitled, ‘Will you put that in Writing?’ because executives often want a memo, power-point or paper on a topic so they can share it with others, and study it themselves. In some professions you must “publish or perish.” More and more, in the Internet era, publishing is a wise move too. So if publishing is good, then being published even more is…even better! Writers write for a reason. I don’t just publish on our www.MHMSM.com industry trade journal website; I’ve been published on others too. All of it is good cross marketing.

Savvy writers submit their work here at www.MHMSM.com in part because it is a form of cross marketing. It is a win-win for EVERYONE involved; the readers, the writers, the industry. Everyone participating wins. Those who don’t – currently – participate can begin to win simply by jumping in!

At a time when our industry has trended down for a dozen years, we HAVE to have a wide variety of ideas and view points to consider! It isn’t enough to have one or two people on a topic. We need and want ‘the proven veterans,’ the known names; but we also need and want the new names – or at least new on the national stage – they may be well known in their own market. We need those new ideas, test them against the wisdom of the past and in the exchange of ideas – in the cross marketing of ideas – see where it takes us.

I’ve been told by people who’ve published in this industry that we get tons more comments their print publication ever did. Precisely because we are online – YOU, our reader have the ability to comment. When can you connect? Well, if you wanted to – right here, right now! Right here; Right Now! – now there’s interaction! We could show examples where just a COMMENT posted by a ‘known name’ in our industry on a blog post earned him a top ten rating in a google.com search done earlier today. The more who are ‘on the stage,’ the more who ‘share the podium,’ the more traffic you get individually and collectively! This is cross marketing online at its finest.

So even beyond writing or posting a comment, there are other advantages beyond cross marketing. Via comments on articles and blogs, via news from sometimes opposing camps in the industry and comments on those, a conversation or discussion can develop over time. Posted comments – especially when you register and then log into our Disqus system – allows you to follow the threads of comments, jump back in and also to post your name and company website. It can be a simple form of cross marketing…

…then, when you connect on Facebook as a Fan, follow on Twitter, or get LinkedIn with me or other writers, you’ll simply be amazed as to how Socialnomics, how cross marketing can benefit you AND the others involved.

Don’t look at someone else in our business and think ‘competitor.’ Think cross marketing. Think Synergy. Think Win-Win. The more you do, the further ahead you will be. The further ahead you get, the further ahead the industry gets.

The Turn-Around can be easy, we need to think about free opportunities like www.MHMSM.com or low cost – highly effective – Cross Marketing in ways like The Virtual Louisville Housing Show © can provide. Be at the virtual ‘auto mall’ cross marketing approach and be part of the future that is growing, not the past that may be dying or dead!

We hope this intro has stimulated both your thinking on cross marketing and helped you to understand some of the ‘thinking behind’ and some of the behind the scenes work and benefit that goes into an INdustry © project and platform like www.MHMSM.com!

Cross marketing, it can be a wave for the future success of whatever it is you are doing or promoting. Give the other gal or guy some attention. Be part of the group, not just sitting on the sidelines. Be part of the conversation, even if it is just to say, well done, or I see it differently because of x. Keep comments clean, don’t attack a person, but politely question or differ with their idea if you have reason to do so. Be happy if they have a different viewpoint. It all creates interest, it can provoke thought and thoughts can lead to the cures for our industry’s ills. Interest and discussions boil down into opportunity. Opportunity, if you knock and keep on knocking, is the door that when opened leads to success. Make cross marketing part of that success.##

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http://www.linkedin.com/in/latonykovach

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