Issue link: https://read.dmtmag.com/i/205269
istence of a noncompliance, defect, or more serious issue. A manufacturer that receives information directly, moreover, is required, under the new rule, to investigate and make further determinations only if it believes "in good faith" that the information relates to a noncompliance, defect, or more serious matter. And a "class" of homes is no longer a class of homes in which the same defect "may exist," but a class that the manufacturer determines, in "good faith," includes homes in which the same defect either "exists" (as a matter of fact), or "likely exists." The revised rule thus raises and clarifies the threshold for action by manufacturers, moving away from vague concepts such as "problems" that "may exist" or defects that "may exist," while establishing a partial safe harbor (i.e. a defense to the imposition of penalties) for manufacturers who act in good faith – changes that should reduce the number of investigations and class determinations, and related costs, while maintaining strong and effective protections for homebuyers. There are other positive aspects of the new rule as well, including: (1) clarification and ex- 19 \ pansion of the limits on manufacturer liability (e.g, by eliminating the requirement that "consumer abuse" be "gross and unforeseeable;" by eliminating the requirement that neglect of maintenance be "unforeseeable;" and by eliminating the requirement that to avoid liability, a failure must occur "solely" as a result of such abuse or neglect of maintenance); (2) an increase in the time period for initial manufacture determinations to 30 days; and (3) a new "reasonable investigation" standard for initial manufacturer determinations, instead of the old mandate for "necessary investigations and inspections," among others. That said, however, the final rule does not include all of the changes suggested by MHARR and recommended by the MHCC and, in a few cases, changes aspects of Subpart I that should have been left alone, such as: (1) deleting the current transit damage exemption; (2) deleting the express limitation that a Subpart I class involves "defects" systematically introduced "during the course of production;" and (3) leaving the "possible existence" of a defect as the standard for HUD and SAA preliminary determinations. CIS Home Loans is an experienced mortgage lender in this industry — and we understand mortgage lending for manufactured and modular homes! We are a seller/servicer for Fannie Mae and Ginnie Mae loans. We offer conventional loans, FHA and USDA loans, as well as one-time closes for construction (for qualified buyers). CIS Home Loans can also refinance current In the final analysis then, do the changes in the HUD final rule go as far as they should in reforming Subpart I? No. Do they fully reflect all of the changes sought by MHARR in its Petition and/or the recommendations of the MHCC? Again, no. But, they are an improvement from where the industry and consumers have been for the past 37 years-plus and should make Subpart I into more of a reasonable, fact-based process, rather than an openended "witch hunt" where virtually every home is a suspect for a "possible" defect. In MHARR's view, HUD revisions to Subpart I are a step forward for the industry and consumers, but more work still remains to be done. T J Danny D. Ghorbani is President & CEO of the Manufactured Housing Association for Regulatory Reform. MHARR is a Washington, DC-based national trade association representing the views and interests of independent producers of federally-regulated manufactured housing. Danny can be reached at 202-783-4087. conventional and FHA mortgages, and we specialize in community servicing. Want to put a mortgage lender— who understands your business—to work for you? Call Paula Reeves at 800-844-4845 or email her at preeves@cisfn.com. CIS Home Loans—how can we help you? Actively signing up retailers in California and Texas For a complete list of states in which we are licensed for mortgage lending, visit www.cishomeloans.com.CIS Financial Services, Inc. dba CIS Home loans | NMLS ID # 93140 | NMLS Consumer Access (www.nmlsconsumeraccess.org). Licensed by the Mississippi Department of Banking and Consumer Finance. Licensed by the Virginia State Corporation Commission. No. 9 on Get It Quick Page NOVEMBER 2013 19 THE JOURNAL