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  • FHA issues RFI on Title I Manufactured Housing Programs

    Federal Issues

    On August 11, FHA and Ginnie Mae issued FHA INFO 2022-76, which seeks public feedback on their Title I Manufactured Housing Programs. According to the request for input, FHA and Ginnie Mae are seeking input on, among other things: (i) opportunities to improve the use and effectiveness of the Title I manufactured housing program; (ii) Title I lender eligibility requirements; and (iii) how to make the programs more competitive in the primary and secondary markets. Responses are due by September 26.

    Federal Issues FHA Ginnie Mae Manufactured Housing

  • CFPB launches initiative to address financial issues facing rural communities

    Federal Issues

    On March 10, the CFPB launched an initiative focusing on financial issues facing rural communities in the U.S. Citing economic trends that have disproportionately affected rural communities over the past several decades, the Bureau stated its initial focus will center around banking deserts, discriminatory and predatory agricultural credit, and manufactured housing. Last month, CFPB Director Rohit Chopra hosted an event where individuals from organizations representing rural communities shared consumer financial concerns and discussed issues affecting the financial resilience of rural families. Among other things, attendees highlighted the issue of banking deserts caused by “stark declines in the number of banks in rural areas,” which has “led to non-bank alternatives that charge higher fees and interest rates.” Bank consolidation has also caused the loss of institutional knowledge, which in turn, has resulted in the disappearance of banking relationships, credit, small businesses, and jobs. Attendees stressed the need for Community Reinvestment Act requirements that would serve rural banking deserts, particularly in persistent poverty counties, most of which are overwhelmingly rural. Additionally, attendees raised issues related to discriminatory and predatory agricultural credit, with stakeholders pointing out that a long history of credit discrimination against Black farmers has contributed to the decline of Black farmers and Black land loss. Other stakeholders raised concerns that farmers’ obligations to banks can make them more vulnerable to exploitative arrangements with dominant agriculture firms. Manufactured housing concerns were also raised by attendees, who spoke about the lack of affordable housing in rural communities, explaining that “manufactured home parks are increasingly being bought up by private equity firms that have, in some cases, dramatically increased rents and tacked on fees in short periods of time.” The Bureau emphasized that it is “concerned about these threats to rural household financial resiliency” and has launched this initiative “to ensure that rural communities, and the people who live in them, have opportunities to build wealth and thrive.”

    Federal Issues CFPB Consumer Finance CRA Rural Communities Manufactured Housing

  • Fannie Mae issues Selling Guide updates, announces MH Advantage program

    Federal Issues

    On June 5, Fannie Mae issued Selling Guide update SEL-2018-05, which announces, among other things, the MH Advantage initiative. MH Advantage is a manufactured home that meets specific construction, design, and efficiency standards. Fannie Mae offers a number of flexibilities on loans secured by these properties, including higher loan-to-value ratios and standard mortgage insurance. The Selling Guide is updated to include the requirements for loans secured by MH Advantage homes, such as property eligibility, appraisal, and underwriting requirements. The requirements for MH Advantage loans are effective immediately. Additionally, the Selling Guide includes updates to (i) HomeStyle Energy loans in Desktop Underwriter; (ii) HomeStyle Renovation loan forms; and (iii) project standards updates to condo, co-op, and PUD project policies.

    Federal Issues Fannie Mae Selling Guide Manufactured Housing Mortgage Insurance Mortgages

  • CFPB Publishes White Paper On Manufactured-Housing

    Consumer Finance

    On September 30, the CFPB published a white paper claiming that manufactured-home owners typically pay higher interest rates for their loans than site-built borrowers. The white paper cites data in support showing that a greater share of manufactured-housing loans are classified as higher-priced mortgage loans or “high-cost” loans. The white paper further discusses the CFPB’s findings that: (i) manufactured homeowners are likely to be older, live in a rural area, and have a lower net worth than site-built borrowers; (ii) manufactured homes typically cost less than site-built homes; (iii) about three-fifths of manufactured-housing residents who own their home also own the land it is sited on; (iv) approximately 65 percent of borrowers who own their land and financed the purchase of their manufactured home between 2001 and 2010 did so using a chattel loan (rather than a manufactured-housing loan); and (v) manufactured-housing production contracted in the 2000s. The white paper does not propose any formal rule or guidance related to manufactured-housing. Rather, it indicates that the CFPB will continue to analyze facets of the manufactured-housing market to identify ways to fill in gaps in available data about that market. For example, the white paper states that the CFPB is considering adding a data field to the Home Mortgage Disclosure Act’s reporting requirements that would indicate whether a manufactured-housing loan is secured by real or personal property.

    CFPB HMDA Manufactured Housing

  • CFPB Director Announces Indirect Auto Finance Proxy Methodology White Paper, Discusses Numerous Other Initiatives

    Consumer Finance

    On June 18, in an appearance before the House Financial Services Committee, CFPB Director Richard Cordray stated that later this summer the CFPB hopes to release a white paper on the proxy methodology it employs  to identify alleged discrimination in indirect auto financing. The white paper follows repeated attempts by members of the Committee to force the CFPB to reveal more details about its approach to indirect auto finance enforcement. Director Cordray also revealed that the CFPB is working on a white paper regarding manufactured housing finance.

    The hearing covered numerous additional topics, some of which overlapped with those addressed during Mr. Cordray’s recent appearance before the Senate Banking Committee. Among the new issues raised before the House Committee, Mr. Cordray expressed openness to developing a limited advisory opinion process for the CFPB. In response to a question from Rep. Ed Royce (R-CA), Mr. Cordray explained that the CFPB regularly provides informal advisory opinions. He acknowledged other agencies’ use of advisory opinions and their potential benefit, and indicated that advisory opinions could be a useful tool for the CFPB on certain specific issues. Nevertheless, he resisted committing to the implementation of a formal advisory opinion process. The Committee recently approved, along party lines, legislation that would require the CFPB to establish an advisory opinion process.

    In response to criticism from Rep. Denny Heck (D-WA) about the pace of an anticipated Military Lending Act (MLA) rulemaking, Mr. Cordray promised that the Department of Defense’s (DOD) proposal to revise the Military Lending Act regulations is nearly ready for submission to the OMB. The DOD recently released a report that previewed the forthcoming rulemaking.

    Finally, Director Cordray also fielded a significant volume of questions regarding the CFPB’s collection and use of data, a continuing area of focus for the Committee’s Republican majority.

    CFPB Auto Finance Military Lending Act Manufactured Housing

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