Keeping America’s Dream Affordable

Members of Congress have asked the Consumer Financial Protection Bureau’s (CFPB) Acting Director, Mick Mulvaney, to look at the harm which has been caused by the agency’s regulations for manufactured housing loans.

Acting Director Mulvaney was before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday to testify about the CFPB’s Semi-Annual Report to Congress.  Committee members at both hearings asked him about how CFPB regulations have limited the availability of financing for manufactured homes.

At Thursday’s Senate Banking Committee hearing, Senator Thom Tillis (R-NC), talked about living in a manufactured home with his father in the 1970s and 80s and lamented that the financing they received then would not be available today.  He argued that “the real victims we don’t talk about with all this regulatory overreach are the people who aren’t getting loans.”  He said, “let’s talk about the untold victims that because of the regulatory overreach aren’t getting loans, aren’t getting mobile home mortgages, and aren’t able to pay their bills.”  Acting Director Mulvaney agreed with Senator Tillis’ remarks pointing out that he and the Senator were “probably the only two people in this room who have lived in a manufactured home and there is a consequence to all this overregulation which is that people do not have access to credit.”

During Wednesday’s House Financial Services Committee hearing, Representatives Andy Barr (R-KY), Bruce Poliquin (R-ME), and Stephen Pearce (R-NM) each discussed the negative impact of CFPB regulations on the availability of financing for manufactured homes.

Representative Barr argued that working families are being harmed by the lack of credit availability caused by CFPB regulations and specifically asked Mulvaney to look at the negative impact of the CFPB’s regulations regarding HOEPA thresholds.  He pointed out that “under the CFPB’s high-cost loan rule, Americans now cannot finance a manufactured home loan.  Manufactured home loans of $50,000 or less have dropped significantly.”  Barr asked Mulvaney to “consider revisiting the high-cost loan rule and increase the interest thresholds to help Americans realize the dream of homeownership” and Acting Director Mulvaney agreed to look into the issue.

Representative Poliquin commented that from 2014 to 2016 there was “a drop of about a third of the number of loans extended to buy manufactured housing in an economy that was improving” and he asked, “do you think that has anything to do with the enforcement of the CFPB and scaring the daylights out of businesses?” In response Acting Director Mulvaney said, “I certainly think that we run the risk, when we pass rules and regulations, of chilling the providing of credit to consumers.”

Representative Steve Pearce (R-NM) told Acting Director Mulvaney that “one of the charges of your predecessor was protection of the consumers. Beginning almost at his first day, we kept pointing out how he was damaging some of the most fragile consumers – the ones who live in my district where fifty percent of the homes are manufactured housing.”  Referring to manufactured home loans he said CFPB rules “are choking off their ability to lend money so that most of the banks have just gotten out of the products.”  He said that “the previous Director had closed off so many avenues to people just trying to get by.  We were in a years-long discussion with the previous Director, and it’s almost as if they couldn’t hear, that they didn’t want to hear that we were actually out there trying to get consumers protected and actually trying to do things that would help them out.”  Representative Pearce also discussed the importance of seller-financing and whole balloon notes for manufactured housing.  He urged Acting Director Mulvaney to change the current CFPB rules for these products as these are “the ways that we make a rural, low-end economy work.”

Emanuel Levy, Executive Director

The federal budget recently passed by Congress and signed by the President contained at least one pleasant surprise—the $1000 per home tax credit for manufacturers that build ENERGY STAR homes was extended retroactively through 2017.

Once again, if you had faith that the tax credit would be extended, you were rewarded. It’s a familiar story that keeps repeating itself: Congress waits until the end of the year to extend the tax credit retroactively, making it impossible for manufacturers to count on the credit before they decide to qualify homes for the ENERGY STAR label. However, keep this in mind: the credit, first passed over a decade ago, has never lapsed.

Need help qualifying homes completed in 2017 for the tax credit? Contact Gwynne Koch (GKoch@Research-Alliance.org) with the Systems Building Research Alliance (SBRA) for assistance.

What about 2018? Will the credit be extended again through the end of this year? We cannot be certain but year after year extending the tax credit has been a priority for both parties in Congress. And, in the coming weeks, SBRA will announce ENERGY STAR changes that will make it easier to qualify homes for the ENERGY STAR label. Watch this space for details!

U.S. Senate Passes Bill Giving Industry Relief from the Dodd-Frank Act

(March 15, 2018)  Last evening, the U.S. Senate passed legislation clarifying a manufactured housing retailer or seller is not considered a mortgage “loan originator”, simply because they provide a customer with some assistance in the mortgage loan process.  This provision was included in S. 2155, the “Economic Growth, Regulatory Relief and Consumer Protection Act,” a package of reforms intended to improve the national financial regulatory framework and promote economic growth.  The legislation passed with bipartisan support, by a vote of 67 to 31.

In addition to the Senate regulatory reform package, H.R. 1699, the Preserving Access to Manufactured House Act, which includes a similar provision to S. 2155, was passed by the U.S. House of Representatives on December 1, 2017.  This language was also passed as a part of the House’s financial reform package (H.R. 10) in June 2017.  In September 2017, the House also passed the bill’s provisions as a part of its Fiscal Year 2018 Appropriations package.

The House and Senate must now work together, to reconcile differences between the House and Senate regulatory relief bills, in order to agree on identical language, so a bill can be sent to the President for his signature and enactment into law.

Congratulations and many thanks goes out to all of the supporting legislators (past and present), MHI staff, manufactured housing leaders and Executive Directors across the nation, who have spent hours upon hours over the last few years, working towards this day!  Job well done!