This week, the U.S. Senate will consider legislation containing a provision to clarify that a retailer or seller of manufactured housing is not considered a “loan originator” simply because they provide a customer with some assistance in the mortgage loan process.
The provision is included in S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, which is a package of reforms intended to improve the national financial regulatory framework and promote economic growth.
Similar to real estate agents, manufactured housing retailers and salespeople are fundamentally in the business of selling homes, not originating loans. The language clarifies that manufactured home retailers and their employees are not considered loan originators, so long as they do not receive compensation or gain for performing such activities.
Just as a real estate agent’s sales commission does not make them a loan originator under CFPB rules, a similar distinction is needed for those selling manufactured homes. This simple, but important change will not result in individuals receiving kickbacks or steering because the legislation explicitly bars them from receiving compensation related to the loan, requires disclosures about corporate affiliations, and prohibits retailers from negotiating loan terms with the consumer or the lender.
The inclusion of this language in the Senate’s financial regulatory relief package is the result of MHI’s persistent efforts to ensure the needed changes contained in the Preserving Access to Manufactured Housing Act are passed into law as soon as possible. MHI worked closely with Senator Joe Donnelly (D-IN), author of the Preserving Access to Manufactured Housing Act (S. 1751) and long-time supporter of manufactured housing, to include this important consumer access provision in the package. In addition to the Senate regulatory reform package, H.R. 1699, the Preserving Access to Manufactured House Act, was passed by the U.S. House of Representatives in December 2017. The 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.
Please contact your Senators and ask them to vote in favor of S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act.
With MHI’s advocacy page, making this request of your Senators is easy.
To call your Senators, click here and follow the steps on the screen. Once you submit your personal information into the form, the names and phone numbers of your Senators will appear along with some very basic talking points about why this change is needed. Once you have made the call, please use the space at the bottom of the form to let us know.
To email your Senators, click here and follow the steps on the screen. The emails to your Senators have already been composed – all you have do is insert your home address and click submit.
The vote will take place in the U.S. Senate this week. Please give this your immediate attention and send it along to others in your organization and everyone else you know in the industry urging them to do the same.
Submit Comments to HUD About its Manufactured Housing Rules
On January 25, 2018, following aggressive advocacy by MHI, the Department of Housing and Urban Development (HUD) announced a “top-to-bottom” review of its manufactured housing rules to address actions that are ineffective, overly burdensome, or excessively costly. According to its press release, “HUD is accepting public comments to identify existing or planned manufactured housing regulatory actions to assess their actual and potential compliance costs and whether those costs are justified against the backdrop of the nation’s shortage of affordable housing.”
The public comment period will end on February 26, 2018. MHI will be submitting a detailed comment letter regarding regulations and enforcement issues that should be corrected.
We need you to join MHI’s effort and weigh in with HUD about regulatory rules and actions that should be changed because they are negatively impacting your ability to meet the housing needs of your customers. It is important that HUD receive numerous comments from the manufactured housing industry during this public comment period. In this housing alert, we have provided you with two ways to respond to HUD.
First, you can utilize MHI’s advocacy page to submit your comments to HUD. Click here and follow the simple steps on MHI’s website. The letter to HUD has already been composed – all you have to do is insert your home address and click submit.
Second, if you would like to expand and personalize the submission letter even further and submit directly to the https://www.regulations.gov/ website on your Association/Company letterhead, click here to download the sample letter in a Word document. Highlighted in red in the sample letter are suggestions for where you can personalize it. Be sure to include Docket Number FR-6075-N-01 “Regulatory Review of Manufactured Housing Rules” in the Subject Line of your electronic submission.
The sample letter that MHI has prepared for you argues that HUD’s actions have come at the expense of fostering innovation and supporting affordable housing for consumers. HUD has intruded into state functions, reinterpreted regulations to the detriment of long-standing and accepted building practices, and implemented regulations and guidelines that unnecessarily limit consumer choice and increase costs. MHI’s submission will include additional details, but the sample letter provides overarching priorities for the industry to focus their comments.
The sample letter includes examples of HUD regulations that are raising costs for consumers and reducing their options in buying manufactured homes, including:
On-Site Completion of Construction Requirements: HUD’s extensive new requirements for home features that are completed after a manufactured home is delivered on-site has resulted in popular consumer amenities no longer being offered by some manufacturers.
Foundation Requirements in Freezing Areas: Without clear evidence that installation systems are failing, HUD is limiting the ability of states to administer their own installation programs. HUD’s intrusion into a system that is working with a one-size-fits-all approach is unnecessary, burdensome and is clearly beyond its authorities in the HUD Code.
Excessive Alternative Construction (“AC”) Requirements: HUD’s effort to oversee the on-site installation of add-ons (such as carports) to homes that comply with HUD standards when they leave the factory is in direct conflict with statute. In addition, the requirement for several items to require “AC” letters due to HUD’s failure to update the HUD Code stifles innovation and limits consumer choice.
Failure to Enforce Preemption: While HUD has made some attempt to intervene where local jurisdictions have sought to legislate construction and safety standards that are not identical to the HUD standards, or which exclude HUD-compliant manufactured homes on that basis, HUD has been lax in this area. The law gives HUD jurisdictional authority to oppose local regulatory schemes that conflict with the federal building code. HUD should exercise that authority.
HUD Code Updates & Enforcement: To allow manufacturers to utilize new technologies and materials in manufactured homes, the law provides a process for establishing, revising, enforcing and updating the HUD Code. Unfortunately, HUD has not finalized dozens of recommendations by the Manufactured Housing Consensus Committee (MHCC). Instead of keeping the building code current, HUD has engaged in demands for increased/enhanced inspections and attempted to try “recertifications” of factories, with no significant data of failures or quality issues to support the need for these punitive measures. This has resulted in increased costs, slowed the production line, and limited innovation. Implementing MHCC recommendations should be HUD’s top priority.
We hope you will join us in this important effort to ensure HUD reforms its regulation of manufactured housing so that more people can become homeowners through quality manufactured housing.
If you have any questions, please contact MHI’s Government Affairs Department at MHIgov@mfghome.org.