Issue link: https://read.dmtmag.com/i/406201
home communities. And real estate-secured mortgages, for homes on improved re- alty conveyed fee simple, was and is obtained from local lenders of various types. However, the prevailing mindset has unfortunately been, and continues to be – in too many circles - 'Sell homebuyers as much home as they'll buy!', rather than 'Only what they can truly afford' - the former sorry attitude satirized in the industry clas- sic, 'Upside Down in a Mobilehome Park', printed in the now defunct Manufactured Home Merchandiser trade publication during year 2000. (Reprint available on request via Official MHIndustry HOTLINE…see End Note # 7) Much rampant (loan origination) abuse, at turn of the century, precipitated the demise of all but the 'Big Four + One' chattel lenders • 21 st Mortgage Corporation • Triad Financial Services, Inc. • CU Factory Build Lending • U.S. Bank – Manufactured Housing • + Vanderbilt Mortgage & Finance, Inc., in-house lender for Clayton Homes. This was followed, around 2010, by the rebirth (circa1970s) of self-finance busi- ness models, and renewed presence of rental units on-site in LLLCommunities, es- pecially among larger properties and within portfolios. Today, independent third party lenders, now the 'Big Five + One' (with 2013 debut of Green Hill Finance) are very selective regarding the chattel mortgages they underwrite. And since the 2008 appearance of the S.A.F.E. Act (i.e. Safe And Fair En- forcement of mortgage licensing), independent (street) MHRetailers and LLLCom- munity owners/operators engaged in one or another form of seller-finance have been forced to comply with long-existing laws previously ignored - because of lax enforce- ment. In addition, new regulations have come onto the chattel lending scene, with passage of the Dodd-Frank Act and formation of the Consumer Financial Protection Bureau ('CFPB'). Some owners/operators understand the importance of compli- ance, and have taken steps to ensure compliance with state and federal law, while others have either discontinued their seller-finance programs, or sought to evade compliance via a number of different methods, including disguised credit transactions – all the while, building long term business liability for themselves and their succes- sors. Furthermore, independent (street) MHRetailers and LLLCommunity owners/op- erators need seller-finance programs to manage and grow their home sales and tradi- tional land lease business models. If an owner/operator is to keep a Class A property full, they can no longer depend on independent third party lenders to effect the fi- nancing of prospective home sales and help control attrition. On the upside, own- ers/operators with a strong 'captive finance' program now find considerable opportunity buying struggling LLLCommunities, filling them up with new and resale homes, thereby raising the value of their investment. (Previous two paragraphs pre- pared by Ken Rishel, of Rishel Consulting, located in Springfield, IL.) For more information about Class A thru D property quality gradations, and 'cap- tive finance' concept, refer to the Official MHIndustry & LLLCommuntiy Lexicon & Glossary in Bruce Savage's The First 20 Years!, PMN Publishing, IN, 2013. (Chap- ter 6) SERVICE. Warranties and degree of customer service vary from home manufac- turer to manufacturer. There is concern today, however, at least one major home manufacturer is ill-equipped, maybe even reluctant, to effect post-delivery service for recently delivered homes in LLLCommunities, in the manner and to the degree in- dependent (street) MHRetailers performed a decade ago. Too early to tell if this is simply a short term anomaly or an emerging trend. TAXATION. Owners of manufactured homes pay ad valorem ('according to value') real estate taxes on these residences when permanently sited on developed realty conveyed fee simple, and when installed on homesites in LLLCommunities within the state of New Hampshire. And owners of manufactured homes installed on rental homesites in LLLCommunities, pay a variety of unit taxes bearing different la- bels (e.g. privilege tax, license fee, etc.), and in some cases, no taxes at all. SECONDARY MARKET. There is no secondary market encompassing the val- uation and efficient marketing and sale of resale manufactured homes, use of escrow accounts, even licensing of salespersons; making it nearly impossible for present day homeowners/site lessees to effectively, value, market and sell their homes – at times to buy (upgrade to) new homes!. Future of Manufactured Housing as 'housing' versus trailers P RODUCT DESCRIPTION. No significant difference here, from the earlier past & present description. Most attempts to improve product design (e.g. removal of chassis) have been thwarted by homebuilding competitors. Today's manufactured homes continue to be, for the most part, single story (Except in CA & MD a decade ago, where two-story HUD-Code/mod homes en- joyed short-lived popularity), and boast the same features as site- built housing, except for absence of stone and brick veneers when shipped from factories. Many of today's homes are shipped with panel flooring in lieu of carpet. Some believe 'net (energy use) zero' homes may be the 'future of manufactured housing'. *4 REGULATIONS. There's recent renewed interest, even recom- mitment, to effect full implementation of MHIA@2000. There's also Uniform Law Commission ('ULC') model legislation afoot, to supplant the 'title, UCC, & repossession' manufactured home own- ership cycle, with the 'deed, mortgage & foreclosure' combination in place in New Hampshire. And there's hope for common sense enforcement of federal home installation regulations, without re- quiring wholesale replacement of proven concrete foundations. DESIGN & SIZE: Continues to be subject to local housing mar- ket needs and preferences. Developer Series Homes are suited for high-priced land in Sun- belt regions, other retirement meccas and elsewhere. Community Series Homes fit most LLLCommunities' need for smaller to mid- sized homes, especially as more and more (smaller) owners/opera- tors learn to sell and self-finance on-site, to fill more of the estimated 250,000 vacant rental homesites nationwide. SHIPMENTS. Estimates run between 60,000 & 70,000 new HUD Code homes in 2014, following 60,228 shipped during 2013. But what about year 2024? Depends on whether easily accessible, plentiful chattel capital returns, sooner or later, to the manufac- tured housing industry; and or reliance continues to be on LLL- Community owners/operators raising funds to effect self-financing of new and resale home transactions on-site. More on this later. DISTRIBUTION. No change anticipated from present status quo, unless chattel capital, once again, become plentiful and eas- ily accessible. As has been said of late, LLLCommunities are today's ' new breed of MHRetailer & loan originator', with one difference – they don't generally sell and finance new homes to and for off-site homebuyers, or contract installation thereof. RETAIL FINANCING continues to be heavily regulated at the state and federal level. Chattel financing of manufactured homes by independent third party lenders, shows no sign of major improve- ment (i.e. easier access to chattel capital) in the foreseeable fu- ture. In times past, smaller finance firms emerged from time to time, but given the higher costs of meeting more regulatory burdens, and inability to charge interest rates that'd attract Wall Street funds, it seems unlikely any new firms will emerge, or existing lenders lower their standards of acceptance, except via specialized programs that effectively move risk onto LLLCommunity owners/operators, with- out the profit opportunities of a seller- finance program. An exception to this contemporary reality, is exer- cising initiative to create and grow a complex part- nership involving local banks and credit unions, to provide manufactured housing finance in the local housing market. \ 29