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CFPB Director Richard Cordray’s Decision Is Missing the Mark

December 15th, 2013 1 comment

Among the hottest topics in manufactured housing are routinely those related to financing. We see that keen interest in financing at live industry events, such as seminars that take place at the Louisville Show, or the rapidly organized and high interest being shown in Texas Manufactured Housing Association's Dodd-Frank summit, both taking place in January 2014. We see that high level of interest in articles about financing being read here on MHProNews too. For example, the single hottest read so far in December is this Industry in Focus report on HR 1779, which we've just updated with a new download of the letter from Consumer Financial Protection Bureau (CFPB) Director, Richard Cordray, which will be the subject of this analysis.

CFPB Director Cordray finished the polite letter, in which he declined delays requested by a bi-partisan call on behalf of manufactured home owners and industry members expressed by 11 U.S. Senators. At the end of the letter, Cordray added a pair of hand written notes.

Here is a screen capture of those second of those two hand-written notes.

democrat-richard-cordray-cfpb-director-posted-masthead-mhpronews-com-.png                             hand-written-note-from-cfpb-director-richard-cordray-to-11-us-seantors-posted-mhpronews-masthead-blog.png

In reply to Director Cordray's note, we are not going to review the Goldman Sachs analysis, but we will make a point that both national associations in manufactured housing have made in their own unique ways. Namely, that the manufactured housing industry had less than zero to do with the financial crisis that brought about the stringent rules that the CFPB is implementing.

To de-facto punish manufactured housing home owners and business (as if our industry were part of the mortgage-bubble-bust), as CFPB rules will do is just flat wrong! It is a little akin to arresting someone who witnessed a crime and treating that witness the same as the one accused of the alleged offense.

A further look at Director Cordray's decision is even more troubling in its reasoning.

First, those U.S. Senators Constitutionally represent “We, the People.” It isn't just the industry's interest he is saying no to, it is the interests of those millions of home owners represented by those U.S. Senators at the well over 100 Congressman who have signed onto HR 1779.

Second, while MHProNews respects the organizations referenced in Cordray's letter as “consumer groups,” that begs the question, who in fact are those “consumer groups” and where do they get their funding? Is it from consumers? No. It is often from foundations. While those groups may in fact desire to advocate for consumers, which is noble, one might ask, do those groups have as close a connection to manufactured home consumers as our industry does?

That could be a long analysis in itself, but let's be clear. A business – or industry – has to serve its consumers or they tend to go out of business. No one has a greater stake in consumer protection than the manufactured home industry professionals do!

Third, while one lender said tongue in cheek to this scribe that manufactured housing lending in the later part of the 1990s was the “Petri dish” for the kinds of abuses the mortgage industry fell into, that same lender added, “But we cleaned up our act ourselves, without Congressional or regulatory intervention. The market worked on its own. We have our own vested interest in making sure that loans perform and consumers succeed.”

Another lender echoed a similar sentiment, saying that sustainability in lending combined with consumer safeguards are an obvious win-win.

No major lender in our industry wants to make bad loans! Major publications covered stories during the 2008 post-mortgage-meltdown, that referenced Warren Buffett's Berkshire-Hathway manufactured home lenders having loan performance better than conventional lending was experiencing.

That same point isn't limited to Berkshire-Hathaway linked MH lenders, it could have been made about any of the major MH industry regional or national lenders.

buffett-obama-mhmsm-posted-masthead-blog-manufactured-housing-mhpronews-com-.png

Buffett was quoted by the Wall Street Journal as saying,

“Last year I told you why our buyers – generally people with low incomes – performed so well as credit risks. Their attitude was all-important: They signed up to live in the home, not resell or refinance it. Consequently, our buyers usually took out loans with payments geared to their verified incomes (we weren’t making ‘liar’s loans’) and looked forward to the day they could burn their mortgage. If they lost their jobs, had health problems or got divorced, we could of course expect defaults. But they seldom walked away simply because house values had fallen. Even today, though job-loss troubles have grown, Clayton’s delinquencies and defaults remain reasonable and will not cause us significant problems.” (Editor's note, emphasis added).

Cordray's letter says in part, It is critical that we move forward so these rules can provide new protections for consumers and provide certainty that the industry has been seeking.”

I'm sorry, but Richard Cordray has missed the mark widely! The uncertainty in the markets – including but not limited to manufactured housing – has arguably been caused more by federal issues, rather than by the market itself.

However noble Cordray's intentions may be, I've heard from more than one source that “They (the CFPB) heard us, but they don't believe us.”  If so, who then does Cordray believe?

Of course the industry is pleased with the accommodations that were granted on appraisals and other issues. But those accommodations by the CFPB to date are only a start.  They are not nearly enough to protect thousands of jobs, many businesses and our millions of home owners.  Our loans are for lower balances, they tend to require more servicing and yet the cost to originate a 30,000 manufactured home loan is similar to a $250,000 conventional housing loan.  The law must take these and other factors into account.

The utter logic of our industry's request and the performance of our loans in the last decade-or-so has been lost on the Director and/or his staff at the CFPB. Or are they being ignored for other – perhaps political? – reasons? We can't say.

What we can say is that the CFPB is making mistakes very much akin to those plaguing the ObamaCare roll out, only in this case, the impact will be on financing that is the life blood of so much of our economy. HHS ignored the warning signs, everyone dug in their heels on the regulatory end and in the Obama Administration.

The Solons of DC have all too often taken a Utopian view rather than a practical one.  Real people and real businesses suffer as a result.

A number of bankers and lenders that tell me that the policies put in place are harmful. Others in the media are reporting on the negative impact of these regulations too, it is just that not enough of the media are focused on the impact on manufactured housing and the 20-23 million Americans who live in our industry's homes!

The "GreenSeco" days of the MHIndustry are dead and gone. There is no rush by any major lender I know of to return to them. Those I know in the industry who were with Conseco, or other lenders with similar practices, learned the lessons well. Not one woman or man I know who experienced the consequences of the MH lending meltdown has suggested that we return to the dark days of a wink-and-a-nod to get another deal done, even if all suspected the loan would blow up. We as an industry paid that price in starting in 1999 and on into the 2000s.

Do the Feds think we in manufactured housing or our home owners need to pay the price on that forever?

sam-zell-manufactured-housing-professional-news-mhpronews-c2013-lifesstyle-factory-homes-llc-.png

Let's hasten to add that not enough attention is paid to the politics that caused the mortgage meltdown. Equity Lifestyle Properties (ELS) Chairman, Sam Zell referred to that, as we've reported previously. Political decisions were made that helped fuel the conventional mortgage crisis. Manufactured housing had essentially nothing to do with that either.

Director Codray, please don't let the DC bubble or politics keep you from seeing and acting upon the truth that our industry's lenders and various associations leaders' have been sharing. Without the changes requested, lending will constrict to the kinds of home owners that Warren Buffett's quote above references.

Who will that harm the most? Frankly, first our millions of our home owners. Yes, it will impact businesses too, but our home owners who may from time to time need to refinance or sell will be harmed the most.

To paraphrase Edmund Burke, those who don't know or learn from the past are condemned to relieve it's pains.

Let's not let unintended consequences that are easily foreseen by seasoned professionals – who are motivated to do right by all involved – stop regulators, politicians or others of good will from doing what is necessary to correct what's wrong with Dodd-Frank and the SAFE Act.

Please see the article and the download linked in our report on HR 1779, as well as this Daily Business News article, both of which now include a download of Richard Cordray's polite but “No” letter to 11 U.S. Senators.

As always, my opinions are mine and should not be construed to represent the views of this or that person or organization. We welcome and publish differing views.

Let's close with a simple thought. It would be wonderful if the CFPB responded to the industry's lobbying efforts.  It was – and is – a worthy effort. But we can't have all our eggs in that one basket. We expect a companion bill to HR 1779 to drop in the Senate, perhaps as soon as Monday, see that article here.

MH Industry pros, it is past time to make our next big push! Our industry could be the answer to America's affordable housing crisis, if only the regulators and public officials will do what's right. We could create tens of thousands of new jobs, and protect millions of manufactured home owners values and access to credit. Together, we can make the changes needed to protect our home owners and our businesses too. Together, yes we can. ##

PS: Check our many Exclusive and Red Hot Featured Articles for December and see the other new stories at MHLivingNews.com too

tony-kovachL. A. 'Tony' Kovach
ManufacturedHomeLivingNews.com|MHProNews.com|
Business and Public Marketing & Ads:B2B|B2C
Websites, Contract Marketing & Sales Training, Consulting, Speaking:

MHC-MD.com|LATonyKovach.com| Office863-213-4090

Connect on LinkedIN:
http://www.linkedin.com/in/latonykovach

One Liners: can they help you protect or grow your business?

October 23rd, 2013 No comments

This column will be posted on hump day, and your scribe is writing this from 36,000 feet. Let's share some thought provoking one liners and power phrases that can help you make your day (and your life) every day they are put to work.

do-you-love-life-then-don't-waste-time-that-is-the-stuff-life-is-made-of-ben-franklin-c2013-mhpronews-.JPG

"Dost thou love life? Then do not squander time, for that is the stuff life is made of." – Benjamin Franklin

"Oh, how rich I would be if only I had everyone's wasted time!" – The Elk

"When everyone is going right, look left." – Sam Zell

"Most of the shadows of this life are caused by our standing in our own sunshine." – Ralph Waldo Emerson

"Govern thy life and thoughts as if the whole world were to see the one, and read the other." – Thomas Fuller

"Every day do something that will inch you closer to a better tomorrow." – Doug Firebaugh

"Timid salesman have skinny kids." – Judge Ziglar

trust-but-verify-ronald-reagan-poster-c2103-mhpronews-.JPG

"Whether you think you can or whether you think you can't, you're right." – Henry Ford

"If you have an hour, will you not improve that hour, instead of idling it away?" – Lord Chesterfield

"Heaven never helps the man who will not act." – Sophocles

"Trust but verify." – Ronald Reagan

"We are either progressing or retrograding all the while; there is no such thing as remaining stationary in this life." – James Freeman Clarke

"They can because they think they can." – Virgil

"Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude." – Thomas Jefferson

"The first step in the acquisition of wisdom is silence, the second listening, the third memory, the fourth practice, the fifth teaching others." – Solomon Ibn Gabriol.

“…hard work and commitment does pay off – if you balance it with faith in God, concern for others, integrity, a passion for learning, and a positive mental attitude." – Jim Clayton

"You can get everything out of life you want if you help enough other people get out of life what they want." – Zig Ziglar

If you liked these…

…then make sure you check in on the popular INspiration blog.

http://www.MHProNews.com/blogs/INspiration/

It is loaded with thought provokers and motivators. Please pass it onto your colleagues, team mates and friends.

The Road Ahead

There are widely divergent forces at work which impact manufactured housing. These are both challenges and opportunities. That said, there are good reasons why a company like the Carlyle Group (CG) is getting into manufactured home communities. As Dawn Wotapka at the Wall Street Journal said it:

"Carlyle Group (CG +1.97%) LP, a private-equity firm that has interests in everything from an oil refinery to a vitamin maker, is adding trailer parks to its portfolio.

The Washington-based company has struck a deal to acquire two Florida communities for a total of $30.8 million…"

Dawn knows better than to call these "trailer parks," and we will reminder her of the proper name. But the point is be it this deal or others, new lenders, new capital, new blood are coming back into manufactured housing.

Let's wrap up with a quick look, keeping in mind the quotes above.

Negative Forces and Factors

  • Regulatory and Zoning.
  • Image issues, both real (self inflicted wounds) and outdated (quality, we build a durable home that's an incredible value, but too few know it).
  • Finance, notably SAFE, Dodd-Frank and CFPB regulations looming or already in effect.
  • Incomes are down, and the work week is shortening for many due to ObamaCare.
  • Home sizes are shrinking.
  • 10,000+ boomers are retiring daily, many need more affordable homes.
  • We need 20 million new housing units by 2020, and affordable housing is seen by Harvard studies and others to be in a looming crisis.

Positive Forces and Factors

  • Manufactured home shipments are rising steadily for 3 years. While still well under HUD Code home levels, modular home sales are rising too.
  • We sell America's most affordable permanent homes.
  • The outdated stereotypes that hold us back from still more sales can be dealt with by persuasive facts and appealing images.

  • The self-inflicted wounds can be corrected and healed.
  • HR 1779 is perhaps the most bi-partisan bill moving to fix CFPB regs, and as of Monday morning, we are now up to 95 Congressmen on board with the MHI and state associations supported fix that protects lending for consumers and those who retail HUD Code manufactured homes.

http://www.MHProNews.com/home/featured-articles/october-2013/136-community-management-a-fair-housing-legal/6333-its-now-or-never-for-mh-lending-reform

Innovation, Information and Inspiration for Industry Professionals.

That was our original tag line here at what we now call MHProNews.com. Please reflect on those words and what they mean.

As to image building, we have a rapidly growing platform that Showcases Smarter, Stronger, Stylish Shelter Savings! found at ManufacturedHomeLivingNews.com or MHLivingNews.com for short.

Like you, we are in the trenches of our industry, through client work, web marketing, sales training and much more. We are more than just "trade media," as important as that is! We are 'all in' on factory built housing.

We see the challenges and look them in the eye, and decide daily to be part of the solution. Thanks for being here. Thanks to all who make this trade media work possible. Thanks for getting others to see what we do, sharing our links and joining the fight for a better future.

http://www.MHProNews.com/home/featured-articles/october-2013/117-marketing/6327-sib-kis-the-manufactured-housing-phenomenon-and-evangelization

Day by day, working better together, inspired as we ought to be…we can do this.

Yes, we can. ##

PS: Check our many Exclusive and Red Hot Featured Articles for October and see the other new stories at MHLivingNews.com too.

L. A. "Tony" KovachL. A. 'Tony' Kovach
ManufacturedHomeLivingNews.com | MHProNews.com |
Business and Public Marketing & Ads: B2B | B2C
Websites, Contract Marketing & Sales Training, Consulting, Speaking:

MHC-MD.com | LATonyKovach.com | Office 863-213-4090 

Connect on LinkedIN:
http://www.linkedin.com/in/latonykovach 

HR 1779 and Manufactured Housing

May 4th, 2013 No comments

We have some 7 months before onerous regulations from the Consumer Financial Protection Bureau (CFPB) kick in January 2014 that would cut access to an important segment of manufactured housing financing. That means we have less than 7 months to get HR 1779, and a pending companion bill in the U.S. Senate done.

So we have 7 months to protect and accelerate our industry’s recovery.

You can click here to identify your U.S. Congressman by zip code , or use the link below.

http://www.house.gov/representatives/find/

I’ve done what I’m asking you to do. So I can look you in the proverbial eye and say, please protect your own future and that of millions of manufactured home owners. Call and/or write your Congressman to ask them to cosponsor the bi-partisan HR 1779.

The link to all you need to know about HR 1779 is right here. A very fine statement by Congressman Stephen Fincher, one of the bill’s co-sponsors, is linked here.

Each on reach one

Once you reached out to your U.S. House of Representatives member, then take one more step. Ask an industry colleague (and your team members) to do the same. Each one, reach one. Sending more messages is fine! But don’t fail to send less than 1 message to someone you know requesting the ask their Congressman to support HR 1779.

Student loans got their legislative fix last year, during the highly political election cycle. Organization and follow through made it happen! Others have, so we can get this done too! The Realtor’s are a highly active body, when an issue comes up, agents write or call Congress by the droves. We must discipline ourselves to do the same.

So take 10, right now if you can, and just do it. Then, ask your industry peers to do the same.

A Nice By Product

The likely bi-product of getting this bill passed will be more positive publicity. Note the Wall Street Journal article linked here. Note the pro-MH Industry video plug on a real estate website linked here. The more engaged WE are, the more good publicity we can get!

Doing this will protect and promote our industry, save and grow jobs, while supporting the value manufactured home owners and that of manufactured housing industry businesses too.

Plenty of good reasons, so please, just do it. Thank you! ##

PS: Check our many Exclusive and Red Hot Featured Articles for May and see the

other new stories at MHLivingNews.com too.

l-a--tony-kovachL. A. “Tony” Kovach

MHLivingNews.com=Re-Discovering and Spotlighting the MHLifeStyle

MHProNews.comMHMSM.com = Industry News, Tips and Views Pros can Use

Services:B2BandB2CAds, Proven MH Marketing & Sales Systems, Websites other Industry Solutions.

Office -815-270-0500

latonyk@gmail.com or tony@mhmsm.com

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http://pinterest.com/latonyk/manufactured-home-lifestyle/

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Whether you think you can or whether you think you can’t, you’re right. – Henry Ford

Reforming Dodd-Frank

April 27th, 2013 1 comment

The day has dawned. The start of the reform of the Dodd-Frank bill has begun. You read the hint here first in our Spotlighted Reports mid week emailed NewsLine. Starting in the House of Representatives, the bill designated as HR 1779, was filed on Friday, April 26, 2013.

The bill's press release is available at the link below, entitled, U.S. House Fights to Preserve Access to Affordable Unsubsidized Manufactured Housing for Millions of Americans.

It is very important to note that this bill has bi-partisan support. Sources tell MHProNews that the companion bill in the U.S. Senate should be filed in the next few weeks, during the month of May. That too will have bi-partisan support. Bottom line? This is doable, but we need you to do your part!

The Wall Street Journal ran a story this earlier week covering the issue just before the bill dropped, underscoring the bi-partisan nature of the desired reform.

The reform of the financial reform is so needed by some 23 million residents of factory built homes and to protect the jobs of hundreds of thousands tied to the manufactured housing industry. With some 70% of our financing being personal property lending, this tweak of Dodd-Frank is critical.

The Grass Roots

State and MHC associations have often done a fine job of getting their members to call, write or meet with their legislators and/or their staffs. Since one is wise to lead by example, your faithful MH scribe here at MHProNews made the journey to DC during MHI's Legislative Session to meet with staffs of the Illinois U.S. Senators Mark Kirk and Dick Durbin, as well as U.S. House Representative Adam Kinzinger (IL-16-R). Count on the fact that I will follow up with each office now that we have a bill number.

Ask your U.S. House Representative to Co-Sponsor HR 1779.

So by setting the example, I can now digitally look you in the eye and say, please, do likewise!

This is your industry and our home owners that we are fighting to protect from the unintended consequences of Dodd-Frank.

We will have more on this topic in the days ahead, and will build a resource page for this purpose too. It's pedal to the metal time. Do your part, we will ours and we will keep you posted on the progress. ##

PS: Check our many Exclusive and Red Hot Featured Articles for April and see the

other new stories at MHLivingNews.com too.

l-a--tony-kovachL. A. "Tony" Kovach

MHLivingNews.com=Re-Discovering and Spotlighting the MHLifeStyle

MHProNews.comMHMSM.com = Industry News, Tips and Views Pros can Use

Services:B2BandB2CAds, Proven MH Marketing & Sales Systems, Websites other Industry Solutions.

Office -815-270-0500

latonyk@gmail.com or tony@mhmsm.com

www.MHC-MD.com

http://www.linkedin.com/in/latonykovach= connect with me on Linkedin.

http://pinterest.com/latonyk/manufactured-home-lifestyle/

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Whether you think you can or whether you think you can't, you're right. – Henry Ford

Bring it on!

January 14th, 2013 No comments

'Championship wrestling' (example, WWF style) has frankly never been my kind of thing. While I love the Rocky series of movies, boxing isn't high on the list either, but a good football game (like that amazing finish between Falcons and the Seahawks) may be! Some of our regular factory-built housing readers who are also on LinkedIn may doubt it, but my heart is peace loving. Still, there are times when something so outrageous happens that no matter how peace loving you may be, you simply have to say, enough is enough! "Bring it on."

For those with skim, don't miss the finish of this…or the meat in between.

Watchdog

Once upon a time, the media played the role of watchdog. Corruption or questionable actions by policy makers, leaders etc. might lead to tips, whistleblowers and in time an investigative report. While journalism isn't dead, it has often reverted to the yellow journalism of yore, more akin to thinly veiled advocacy. In trade publishing, media tends towards the cheer leading role, but that doesn't mean that you don't dig in from time to time and remind professional readers that a spotlight still exists. As an aside, we publish good, bad or in between news in our wildly popular Daily Business News to keep news all real apart from commentary for our readers.

The watchdog role requires synergy between it readers and the media. It is NOT enough for a publisher to merely spout off well (feeble, or in between) conceived missives. When any publisher has an agenda, caveat emptor applies.

AAA

We do listen to, chat with and receive insights and messages from a number of pros coast to coast and border to border. Canadians reach out, as do intentional readers beyond North America's shores. Having the largest U.S. audience in factory built housing has its advantages. One perk is hearing sometimes riotous comments, such as AAA. It has been over a year since that one came my way, with the source being protected, of course.

AAA stands for another publisher's unstated mantra, namely: AAA = "All About Allen."

Self-promotion is necessary for every business – and to some extent – for professionals too. Another behind the scenes commentator once told me (tongue in cheek?) that he is 'jealous' of George F. Allen's ability to self-promote.

The best self promotion is when others see the value of what you do and sing your praises. But for some, it is “AAA.” When you publicly agree with George Allen, then you may be welcomed into his inner circle. If you dare to disagree, well…

Allen is retired Marine, and he periodically reminds readers about his service in Vietnam and the Gulf, which certainly deserves out thanks. No doubt Allen's entertaining tricks at times have brought smiles to many, myself included. One must give the man his due for positive things like being a part of the birthing process of the National Communities Council (NCC).

George Allen has his following of a few hundred precisely due to good or entertaining things done, but are those 'good things' now in the 'good old days' gone by?

A number of readers tell us that the AAA self-serving nonsense has hit a level that arguably borders on the intolerable. You watch a drunk on the same road you travel, not because you want to, but because it is prudent to do so. There are those who read what the Allen fellow says, not because his writing is necessarily easy or appealing, but rather because he is weaving back and forth and you want to avoid a collision if possible. Case in point?

For approaching two years now, Allen has been about trying to force MHI's hand, privately and/or publicly, into buying out his 'business interests' so he may 'retire.' Thinly veiled threats are sent directly to MHI officials, indirectly as if they are clandestine black ops through his blog, other published writings, and of course by phone, email or in person.

We examine some of what Allen is doing in this new Industry in Focus article published at this link here.

We have waited until we had a statement from Manufactured Housing Institute (MHI)

CEO, Richard "Dick" Jennison, which is included in that report linked above.

Danny Ghorbani

In a way, Allen and Danny Ghorbani have been complimentary book ends, more united by their passions (opposing) MHI than they are unified by any shared vision. Some think that “the enemy of my enemy is my friend” may apply with those two.

Why they oppose MHI may also have similarities.

Danny, I've been told, seems to have never gotten over some things back in the day with respect to MHI or the occasional personality related to it. Long memory and not getting his way, Danny may lash out when it is least expected or convenient, such as his rant penned in the wake of the Wall Street Journal report, which is linked here.

The Price we all Pay

The problem is, that Danny Ghorbani's or George Allen's rants come with a price tag!

We will not parse their intentions, which may be sincere and well meaning. But that price is arguably paid by home owners and the industry's businesses and professionals that they allegedly wish to serve. The consequences may be unintended, but they are impactful nevertheless.

Both Ghorbnai and Allen had been and/or were sounding off veiled and/or directly targeted attacks on MHI, at precisely the time when MHI, Texas and SNR Denton were engaging with the CFPB in highly sensitive discussions. Did the Allen/Ghorbani attacks have an impact on the adverse CFPB decision released (linked here) last Thursday?

Who knows with certainty? But can anyone suggest with a straight face that the attacks of those two helped the Industry's cause to modify Dodd-Frank in a reasonable fashion?

As one seasoned and respected manufactured housing industry leader said to me recently, our industry has historically done its best in the last 15 years when the voices work together, as was the case with the Manufactured Housing Improvement Act of 2000 (MHIA 2000). So true.

Note, MHProNews with-held in our sole discretion the publishing of Ghorbani's 'analysis' until now, in hopes of blunting the possible impact of his missive. But the facts are that Ghorbani send out hundreds of those 'press releases' via email and there is no telling whose hands that and other attacks on MHI's efforts falls into. Whatever damage that may have been done, is done.

Specific Hits on Industry Segments

While Allen and his buddies – including Ken Rishel, Spencer Roane and Michael Power – beat the drum for a 'new association,' it reportedly has Ghorbani metaphorically salivating on the sidelines, as this has long been one of his desired goals, to foment an insurrection within MHI. Is that wise?

We must examine the potential costs and fall-out from the recent decision in DC.

  • To low balance cost manufactured home owners. Millions in this group may be the most harmed if we fail to get Congress to act before the CFPB's decision kicks in. Why? Because the early read on last week's decision (again, linked here) is that MH didn't get the result MHI/Texas and SNR Denton worked so hard to achieve for all segments of manufactured housing.
To MHCommunities – of all the business segments potentially among the most harmed by the CFPB decision, the land lease communities segment is surely in that mix. Can it be weathered? Yes! But the fact that low-dollar value home owners in land lease communities are going to be impacted, so too will MHCs. For seasoned, savvy and nimble operators – especially larger portfolio operators – this can be turned into new opportunities.

So the irony is that the precise group that George F. Allen ('community investor') has as his recent 'target market' for his new 'association' – namely, the 'mom and pop' MHPs and MHCs – they are the far more likely to be harmed by the decision linked above, once it is implemented. Thanks so much for your help, George.

  • Smaller Factories. Clayton, Cavco and Champion – among others – have evolved their business models to a point that they are better able to weather such squalls. But a hiccup in the flow of chattel (oops, personal property) lending could swamp the boats of some of the very manufacturers that MHARR represents. Thanks so much for your help, Danny.

We will note that some lenders and retailers who do more land/home mortgage style deals will be the least impacted, in fact they could benefit from the decision.

That said, one personal property lender executive told me last week that they want ALL of the lenders to do well, including the one most likely to be adversely impacted. Why? Because, he explained, some marginal retailers – in the wake of such a decision – could fall from the table, especially if their business model has been wed to marginal customers who will arguably be harmed in the wake of the CFPB's ill advised decision. Thanks so much, Consumer Financial 'Protection' Bureau.

The point is that while it wouldn't be a 'beyond a shadow of a doubt case,' Ghorbani

and Allen's routine and public anti-MHI missives may well cost some businesses 6-7 figures at a time they can't afford it.

Logically the 'constituencies' of Allen and Ghorbani are among the most likely to suffer!

Historically, as noted above,our industry does its best is when we join hands and unite our voices. It is America, Allen and Ghorbani have the right to say or publish what they will, within limits. But those who 'support' them (smaller independent factories and mom and pop communities) will be the more likely to pay the price if they are not marginalized, reigned in or have their funding cut off.

For the Regulators, Public Officials or Investors who may be reading this analysis

One ought to consider why the vast majority of the engaged industry owners back the existing state and community associations along with the Manufactured Housing Institute (MHI) and the National Communities Council (NCC). Then, one ought to consider why the few vocal naysayers herein have such a comparatively small following.

A snapshot of the pair

Potential Silver Lining Solutions to the CFPB decision

Unlike the handful of tiresome industry complainers who want to pat their own or each other's backs, it is much better to have true third parties toot the horn for you.

For example, the membership of state, communities, MHI and NCC combined numbers well into the thousands. By contrast, the numbers of followers of Allen and his band or Danny Ghorbani are relatively few.

Allen periodically rants about this publication and my work, as recently as today.

In response, let me simply point to over 175 current LinkedIn recommendations and endorsements (as evidenced by the screen capture from LinkedIn below), MHC-MD.com, or other client testimonials.

 

 

Mistakes

Mistakes can be corrected, when the mistaken party is willing to stand corrected.

We have all made mistakes, but the question is, what do we do once those mistakes are clearly identified?

I recall the CEO of one of the very biggest companies in our industry who sent me a message, bringing to my attention a significant fact error in one of my own articles. Ooops! The error was corrected, an apology offered and accepted. We moved ahead.

We all have to do that from time to time. So why can't a handful of adept self-promoters admit their efforts in recent years have born substantially no good fruit for the industry and/or even for their target audience of supporters?

We at MHProNews have worked for some years to build strategic allies. This has been done as our part in advancing the Industry. We have not always agreed with MHI, but we strive to work within the system. Patience and respect for the other's perspectives, quiet persistence if one is sincerely convinced they are correct; these are the ways to advance towards unity and joint action.

Let's provide a partial list of initiatives we've been involved in – in some cases for many years now – for your consideration, and let you decide if these would be worthwhile efforts.

  • Greater involvement in good associations (can anyone say with a straight face and using sound reason that Allen's proposed "new association" could qualify as such before many years go by…if ever?).
  • Doing more with good MH PACs. We've seen with the 93% win rate MHI had in supporting its picks in the last election cycle, or the impressive 87% win rate that Iowa's MH Association had in 2012 (others beyond these two could be named), that PAC support matters!

The more the support, the wiser the picks, the better the outcome. 2013 ywill NOT be a year to sit out on the sidelines! Let's look at the example of Sherrod Brown. Senator Brown was one of MHI PAC's supported picks in 2012. Senator Brown issued a strong letter to Richard Cordray, as we reported last week. This bodes well for his support in upcoming legislative initiatives we will need in 2013.

We have dozens of potential supporters in DC, but more are needed.

  • Grass roots activism. We need you, yes you, involved in your association(s) if you aren't already deeply involved. This can't be left only to paid association staff. We need this grass roots activism to mirror what Realtors or Homebuilders do. That activity needs to be in concert with properly established national, and/or state level and/or established MHC Associations (again, we mean MHC associations like those Western U.S., not George Allen's planned new one). We need YOU, in Washington DC for the MHI Legislative Session in the end of February and/or at your local House or Senator's office.

(Note. Allen's own comments about his planned 'association' stated that he intends no advocacy. Huh? An association that does no lobbying? Then what in heaven's name would it do? That said, he has at times signaled the opposite, so it is difficult to know what he truly has in mind. That's one of many reasons his initiative makes no sense.)

  • Increased positive engagement with MHC residents and MH Home Owners, to line them up with industry professionals when needed. MH Homeowners, MH Professionals and MH Associations could be the sleeping giant we need with Congress, regulators and in the states too.
  • New Blood. Those leaders – and they are many – involved in the Introduction to MH Opportunities Day may someday look back and say, that was a solid, pro-active decision they made to start that process. We need more pros – more new blood – coming into our Industry! We need more smart builders, investors and lenders to look closely and say, yes manufactured and modular home building makes good sense. It should be noted that the CFPB decision doesn't harm what a stick builder would b used to doing! The stick builder who would enter the MH space could be undeterred even if that CFPB ruling went into effect. Those who would develop new communities using overlooked options available right now also opportunities that only the forward thinking investors or business professionals will capitalize upon! New capital and industry growth can help those already in the business, as it can benefit the newcomers.
  • Remarketing of MH! I will only say that if you are a lender, retailer or MHC owner/operator, you need to be at or have at least one trusted representative in Louisville to hear Dan Rinzema's important presentation, which I will have the pleasure of introducing. Warren Buffett, I know you are busy, but this is an idea you told Kevin to think about some years back. Thanks to Dan Rinzema's foresight, it is already underway. Learn all about this in Louisville, at a free seminar, on January 23, 11:15-12:15 PM. Don't miss it. The times and topics for all of the AT SHOW seminars are on page 2 of the downloadable brochure linked here.

Ju-jitsu

The time has come to rally the troops. Let the blow-hards, blow harder.

Let the rest of us take their negative energy and turn in into positive inspirational dissatisfaction!

Tell your colleagues why the blow hards are wrong, so they don't get the fuel and support they crave.

Please tell your friends, that you'd rather back the teams and players who are positively engaged than those who spend too much time publicly pointing their finger at the associations noted above who are doing the heavy lifting, without realizing that three fingers are always pointing back at them.

Not Personalities, Consequences and Results

None of what was written herein should be construed to disparage anyone. Just as two people in particular love to analyze others, as public figures, they and their results are subject to analysis.

People can get passionate about something, they may sincerely believe they are 'doing the right thing' – for themselves and/or for others. But a person can be sincerely mistaken!

So we provide, you decide. We will leave it to our readers to investigate and decide if those noted in this column are in the right, or are in fact the voices of division that can't help you as a professional or business leader based on their recent behaviors.

Dissent is fine, it everyone's right. But let it dissent among and within existing associations be more private, better thought out and prudently handled. Let's learn to synergize, instead of doing what Danny Ghorbani has been doing for some time now. Let's not let support yet another 'national' association, as Allen is mistakenly advocating, that can only further splinter our efforts in DC or elsewhere!

The Next Stop!

My understanding, and we hope to have an expert pen a column on this soon, is that we have one year to get it together regarding the CFPB's mis-fired decision, linked above. That can be enough time, if enough of us dig in and do the right things.

We are either part of the problem or part of the solution.

Retailers and communities, besides engaging in real Associations, come to Louisville and see lenders in person present their latest programs that ARE Dodd-Frank complaint!

Learn what you can do today to enhance your growth and profits at the Louisville Show! Hop a plane, or jump in your truck, car, SUV (does anyone in MH drive a Prius?… ;-) and be in Louisville to see all the Money Tree business-building seminars, 39 new model homes on display and some 80 exhibitors who will show you how to profitably navigate in the world today.

Your Feedback is Encouraged

We welcome your private messages, posted comments or 'Letters to the Editor' style feedback for, against or nuanced about this column and the two Industry In Focus Reports:

If you are sending comments for publication, please make your subject line to: Letters to the Editor, tony@MHMSM.com.

We will be engaged. We will be in DC. We will support MHI and the existing associations as noted. We will call and write our legislators. We will be in Louisville, please see us in booth #115. No one can do it alone. But together, we can get it done.

2013 can be a great year. We have early reports from retailers and communities that indicate the same.

As to the blow-hards, if they don't mend their paths, bring 'em on. Let's tune them out, or take the steps to put them in their proper place. Now is the time for unity. Now is the time…for thoughtful, positive action! ##

PS: Check our many Exclusive and Red Hot Featured Articles for January and see the

other new stories at MHLivingNews.com too.

l-a--tony-kovachL. A. "Tony" Kovach

MHLivingNews.com=Re-Discovering and Spotlighting the MHLifeStyle

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Services:B2BandB2CAds, Proven MH Marketing & Sales Systems, Websites other Industry Solutions.

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Whether you think you can or whether you think you can't, you're right. – Henry Ford

Sounding off to resolve Manufactured Housing Industry’s news blues

July 20th, 2011 No comments

In recent weeks, we’ve had Marty Lavin, Al Cole and Pat Curran among others sounding off on Industry related issues via our popular Industry Voices Guest Blog.  For those who have not followed that blog, shame on you!  if you aren’t a regular reader, you are missing out on some often bright minds sharing keen insights on how to turn-around the Industry’s blues into more profitable good news.

The purpose of the Industry Voices guest blog is to offer Industry professionals a platform to share an OpEd style article.  Think New York Times, Wall Street Journal or any major publication’s guest columns.

Do you have an opinion?  Are you ready to write a guest column on a topic of Industry interest?  Some think of this as a letter to the editor.  It could be that, but an OpEd or Guest Column article is usually more robust.

We’ve had association leaders, retail, lending and community professionals among those who have graced our pages recently.  We are holding a three columns, two from a well know executive and a third from an MHC owner, because we had a record number of submissions at the first of this week.

Let’s be honest.  You have your own list of topics to get off your chest! You have an opinion on what is going on (or not) at the Capitol, state or national. You might have thoughts on an event you attended, or plan to attend. Industry Voices is the place to do so in the Manufactured and Modular home world.

I’d love to see people sounding off on industry turn-around strategies.  We can and should be selling more new manufactured and modular homes!  How do YOU think that can get done?

Or sound off on ideas on how to handle issues such as Dodd-Frank.  CFPB goes live on July 21st.  When will their rule making go into effect?  MHI hopes rule making will be 18-30 months from now.  But what if it is sooner?

I’ll briefly mention again the following of interest:

iReportMHNewsTips@MHMSM.com is your fast and easy way to share news items with us for publication.  This can be anything from an Obituary, to a People and Promotions item, to some local, political, association or business news related to factory built housing or housing in general.  Please put iReportMHNewsTips in the subject line for fast identification.

Want to submit an Industry Voices Guest Column?  Please Put Industry Voices in the Subject line of your email to me at tony@mhmsm.com, and suggest a headline you like.  Keep in mind all articles are subject to editing, see about is and the terms of use.

Our new format is getting closer by the day!  MHMSM.com will soon be re-branded as MHProNews.com.  The new site will boast a modern news-site look, with more features and easier navigation.  When the switch takes place, planned for the end of summer, be advised our IT guru tells us we will go off line for about half a day to accomplish the switchover.

Are you signed up for our twice weekly emailed newsletter updates?  It’s free, so You should be!  About 15,000 messages go out via email that bring thousands to daily to MHMSM.com to read news, tips and views you can use.

Finally, posted comments from readers are available via our Disqus system 24/7.  We typically get lots more calls and emails than posted comments, but either way, your feedback matters.

Let’s close with a common theme that Marty Lavin’s, Al Cole’s and Pat Curran’s articles all had.  They:

get into the meat of an issue, in their cases, chattel financing, which is the fuel for 60% of our Industry’s home sales.
The looked at not just problems, but suggested possible solutions.  How can we protect our remaining 3d party lenders?
How can we get more third party lending?

Please read their thoughts and you will see some interesting common points, even though each are writing independent of the others.

Watch for some interesting news and commentary in the days ahead.  It is all right here at MHMSM.com a.k.a. MHProNews.com. Thanks for letting us bring you All the Best. ##

The Wall Street Journal and the Manufactured Housing Industry

October 3rd, 2010 4 comments

In our Friday edition of the Factory Built Housing Industry News at Noon, we featured stories from Canada and the United States, including our daily Market Watch report on manufactured housing stocks. My focus for this post is the part of the News at Noon that recapped the Wall Street Journal’s recent article on the Manufactured Housing Industry’s “search for a rebound.”

Let’s analyze this Wall Street Journal (WSJ) article – pros and cons – for a few moments. Pans and Points from this article include:

  • Starting with the headline, this may be read by manufactured housing industry aficionados as a classic example of either sloppy journalism or media bias. The headline reads: “Mobile-Home Makers Try to Stitch Together a Rebound.” The problem here, as any informed MH Industry Professional knows, is there have been no mobile homes built by the factory-built housing industry since June 14, 1976.
  • A proper and legal name used by the federal government and others for this style of factory-built housing is “manufactured home” or “manufactured housing.” That has been the case since June 15, 1976, the date that the HUD code as passed by Congress in 1974 went into effect.

The WSJ article intermingled the use of the terms “mobile home”, “manufactured home” and “trailer”, as if each were a proper usage of synonyms. They are not. In our politically correct age, we should all know and be sensitive to proper use of names and terminology. This should be especially true for respected publishers, such as the WSJ.

Let’s use an analogy to make the point.

  • Since when does the mainstream media use old, politically incorrect terms in any other form of reporting? When do we see blacks or African Americans referred to with the “N” word by the media? When do we see natives of Mexico referred to as “wetbacks,” as was once sadly the case with such ethnic groups? So, why does the WSJ use (or rather, misuse) the terms “trailer” and “mobile home” in their article?
    • To help the WSJ out – and anyone else in the media that is paying attention – a “mobile home” was built on or before June 14, 1976. None have been built in 34 years.
    • A “trailer” hauls cargo or cattle; a “travel trailer” is a non-motorized style of recreational vehicle (RV). (A motorized RV is a “motor coach” or “motor home”.) A trailer is also a name for a movie preview.
    • Manufactured Housing Industry purists believe that only the ignorant, lazy, misguided or those with an anti-industry agenda misuse terms such as “mobile home” or “trailer” by applying them to modern manufactured homes.
    • So, what is to be said when a respected main stream media outlet – such as the WSJ – deliberately blurs the proper terminology regarding this type of quality, affordable factory building, past and present?
  • In their article, the WSJ doesn’t explain why Cavco Industries, Inc. CEO, Joe Stegmayer, is counting on a “gradual rise in demand from retiring baby boomers and empty nesters seeking smaller houses,
    Cavco Manufactured Home in Arizona
    This photo by Brandon Sullivan of the Wall Street Journal, was included in their story linked above. This was one of the positive highlights from their article – a Cavco Home in AZ – that demonstrates how residential today’s Manufactured Homes can be.

    as well as first-time home buyers.” One might wonder from their wording:

    • Is Stegmayer into wishful thinking?
    • Or is his reason because of studies like those done by Cornell University’s Dr. David Funk
      • or that of Charles Shinn, a respected consultant once with the National Association of Home Builders (NAHB)?
      • These two studies point towards a looming demand that will roughly dovetail once this current wave of stick-built/conventional housing foreclosures has passed.
      • These studies also suggest the importance of manufactured and modular housing for addressing these looming booms in the not too distant future.
    • One quote in the WSJ piece seemed to allude to a popular conspiracy theory that runs in certain MH Industry and business circles:
      • “I see this as a temporary blip for Buffett,” says Paul Howard, an independent analyst in Glastonbury, Conn. “There’s value in being the last person standing and being able to survive the downturn.”
      • The theory that Buffett/Berkshire-Hathaway/Clayton Homes is allowing the MH Industry’s downward slide may sound interesting or bring more readers, but where is the hard evidence?
      • Where are the affidavits or secret documents to prove such a theory, leaked by a disgruntled whistle-blower?
      • To be balanced, some facts and terminology used in the WSJ article are correct:

        • Indeed, some 19 million Americans live in manufactured homes, as the story reported.
        • A positive – and accurate – statement about the quality materials and advantages of manufactured homes should be noted as well.

        Other facts cited by the WSJ are clearly questionable:

        • To suggest that the Industry as a whole employs 75,000 individuals is unclear, misused or absurd. There are about 50,000 manufactured housing communities, some 3500 retail outlets, plus dozens of factories, not to mention, lenders, insurance companies, installers, suppliers and vendors to the Industry.
        • Most such locations and firms require multiple employees, which collectively dwarfs and dispels the figure cited by the WSJ story.

        Then there is the oblique reference in the article to the “Duty to Serve” provision passed by Congress in the Housing and Economic Recovery Act (HERA) of 2008, mandating that the GSEs serve the manufactured housing Industry and other “under-served markets.”

        • Where is the investigative work that was once the hallmark of mainstream journalism at work here? As we have mentioned in our pages at www.MHMSM.com before, if you or I violate a federal law, we become subject to fines, penalties, prison, etc.
        • What happens when the GSEs, now with the FHFA’s help, ignore federal law mandating financing for modern, appealing, quality manufactured homes? So far, apparently, nothing!
        • There have been hundreds of billions of dollars in bail-outs of lenders on conventional housing! In the light of that fact, isn’t it a bit disingenuous to call manufactured home loans “riskier,” as the article says?
        • Riskier how and to whom? Where is the clarity of reporting?
        • Certainly not riskier in total dollars to U.S. taxpayers! Wikipedia states that over 700 billion in federal dollars have been committed to various taxpayer-guaranteed efforts linked to the subprime mortgage crisis for conventional housing. Any manufactured home loan losses one might point to by comparison are a mere pimple on an elephant’s cheeks.

        One might easily lose perspective on how large the federal bailout of the subprime mortgage mess truly is. To put that vast sum of $700 billion in perspective, that would pay outright for 9,333,333 manufactured homes at an average price of $75,000. If 9.333,333 million residential-style manufactured homes were built and placed end to end, that would circle the world at the equator about 5 times. So when Congress passed HERA in 2008 and gave the GSEs, who hold over 5 trillion dollars in mortgage-backed securities, the mandate to serve the manufactured housing industry, it is laughable to think we are a higher risk than the subprime loan crisis of conventionally built homes has proven to be.

        The manufactured home industry does suffer, as Triad Financial’s Don Glisson and Champion’s Phyllis Knight indicated in the WSJ piece, from an image issue.

        • Unquestionably, that image can be helped or harmed by proper – or improper – reporting by the mainstream media. The comments posted by some on the WSJ story underscore that point.
        • Most certainly, a level playing field in financing would be a massive boost to the MH Industry, creating jobs, and would prepare manufactured housing builders for the next wave of affordable housing demand that Dr. Funk’s and Mr. Shinn’s studies tell us is coming.
        • So, where are the investigative reports by the mainstream media that document the lost American jobs, due to failure to implement HERA?
        • Where are the reports on studies published by the mainstream media that documents the quality, durability and value of modern manufactured homes?
        • Why do so many in the media seem to relish reports on old pre-HUD Code “mobile home parks”?
        • Why tag old mobile homes, when there are even older, more outdated, unappealing, energy-hog conventionally-built houses than old pre-HUD Code mobile homes?

        There are plenty of theories, conspiratorial or otherwise, as to why the media or regulators drive stakes into the heart of a uniquely American Industry. Where are the reports that show how the GSEs/FHFA ignoring of the congressionally mandated duty to serve in HERA hurt millions of American manufactured home owners when refinancing or resale time comes?

        Would the Japanese media be so un-nationalistic and short-sighted as to attack Toyota for its often bustling factory built housing industry? Would Japanese regulators try to choke off their own nation’s industry?

        In the post-Conseco era, manufactured housing community operators have created an estimated 3.5 to 5 billion in chattel loans for residents of their communities. Lenders like Triad have proven manufactured housing loans can be safely and profitably underwritten. The WSJ could have noted these and other facts as to why the manufactured housing industry is working wisely on a sustainable come back.

        We will move this to a close with this from http://www.merriam-webster.com/dictionary/journalism

        Definition of JOURNALISM

        1
        a: the collection and editing of news for presentation through the media
        b: the public press
        c: an academic study concerned with the collection and editing of news or the management of a news medium
        2
        a: writing designed for publication in a newspaper or magazine
        b: writing characterized by a direct presentation of facts or description of events without an attempt at interpretation
        c: writing designed to appeal to current popular taste or public interest

        One must question if the WSJ article fits the definition of 2b above. So, what do we call this form of news reporting? Does the following perhaps fit?

        From http://www.answers.com/topic/yellow-journalism -

        yellow journalism n. Journalism that exploits, distorts, or exaggerates the news to create sensations and attract readers.

        We are not mind readers here at www.MHMarketingSalesManagement.com, or www.MHMSM.com for short. Perhaps the WSJ can explain why they misused terminology in the story linked above. Maybe they will do a correction, or are working as you read this on REAL investigative journalism that would benefit our Industry, millions of potential home buyers and the nearly 20 million current manufactured home owners?

        We will be among the first to stand in line and to toot their horn if the WSJ does so! # #

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