Issue link: https://read.dmtmag.com/i/672763
MAY 2016 6 THE JOURNAL No. 4 on Get It Quick Page The negative impact of Consumer Financial Protection Bureau (CFPB) rules on the ability to buy, sell and finance manufactured housing loans was a topic at Thursday's Senate Banking Com- mittee hearing entitled "The Consumer Financial Protection Bureau's Semi-Annual Report to Con- gress" thanks to efforts by the Manufactured Hous- ing Institute. Sen. Joe Donnelly, D-Ind., the sponsor of MHI's priority legislation, the Preserving Access to Manufactured Housing Act (S. 682), high- lighted the need for the bill by expressing concerns about the impact of CFPB rules, raising questions to CFPB Director Richard Cordray about the de- cline of manufactured housing loans since the CFPB regulations went into effect. "We have previously discussed the impact of CFPB's rules on manufactured housing lending and I do have concerns that the new rules would negatively impact the ability of the consumers to buy, sell or refinance these homes as financing for smaller balance loans is becoming more difficult," Donnelly said. Donnelly cited Home Mortgage Disclosure Act (HMDA) data that confirms that manufactured home lenders are not making loans that fall into the revised Home Ownership and Equity Protec- tion Act (HOEPA) category. HMDA data shows that after HOEPA rule changes kicked in starting in 2014, manufactured housing lenders stopped making loans with the HOEPA designa- tion, denying borrowers mortgage credit for these types of loans. While manufactured home loans of all size categories went down, the declines were largest for smaller dollar loans, the category of loans that the new rules impacted the most. In comparison, overall mortgage loan data for all homes, meanwhile, shows a 2013 to 2014 year over year increase in the number of mortgage loans. "The 2014 HDMA mortgage data shows that high cost manufactured home loans have basically evaporated at this point since the rules went into effect," Donnelly said. The Federal Reserve issued an analysis of the 2014 HMDA Data. They called the decline in manufactured home loans: "a precipitous drop in the number of loans originated in 2014 at the HOEPA price threshold, whereas, for 2013 - be- fore the new threshold rules took effect - no such discontinuity was evident. Senator Donnelly's questions to CFPB Direc- tor Cordray helped make a compelling case for the legislative changes in S. 682, the Preserving Ac- cess to Manufactured Housing Act, which makes necessary adjustments to ensure financing is avail- able for manufactured housing, while keeping in place the important consumer protections of the Dodd-Frank Act. "The evidence clearly demonstrates that regu- lations implemented as a result of the Dodd-Frank Act have become a barrier to the financing needed for manufactured homes," said Dr. Lesli Gooch, Ph.D., Senior Vice President of Government Af- fairs and Chief Lobbyist for MHI. "The Preserving Access to Manufactured Hous- ing Act contains two slight revisions to CFPB reg- ulations that can spur lending without harming the consumer protections contained in the Dodd- Frank Act. Manufactured housing provides a key alternative to rising home prices and rental rates that are squeezing American buyers. To restore the American dream of homeownership for these credit-worthy families, these regulations must be fixed. We appreciate Senator Donnelly's hard work to advance these simple, but meaningful, re- forms. " If you have any questions, please contact MHI's Senior Vice President of Govern- ment Affairs and Chief Lobbyist, Dr. Lesli Gooch, at (703) 558-0660 or lgooch@mfghome.org. MHI Advances Manufactured Housing Finance Reform