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ViewPointBy Jess MaxcyCMHI PresidentH.R. 3849 – The PreservingAccess to ManufacturedHousing ActIntroduced on January 31, 2011 byGary Miller (R-CA), Joe Donnelly (D-IN) and bill sponsor Stephen Fincher(R-TN), H.R. 3849 seeks to “reduceregulatory burdens that impede accessto affordable manufactured housingfinancing.” *The Preserving Access toManufactured Housing Act is focusedon two issues:1) Reducing the threshold by whichsmall balance manufactured homepersonal property loans are consideredhigh cost mortgage loans.2) Clarifying that persons sellingmanufactured homes who arenot engaged in the business oforiginating residential mortgageloans and do not perform the acts of amortgage loan originator (MLO) are notdefined as such.Support for H.R. 3849 is extremelyimportant for our industry.While clarifying the definition of aMLO may be viewed as a cleanupissue, the section dealing with high costmortgage loans is of vital importanceto current and future home owners,especially those in the resale market.For example, a recent audit of yearto-datesales by one of our largestlenders revealed that over 50 percent oftheir loans would have been consideredhigh cost mortgages by the HomeOwnership and Equity Protection Act(HOEPA). As a result, those loans mostassuredly could not have been madehad the HOEPA limits been in place.The following are excerpts from ananalysis prepared by the ManufacturedHousing Institute:Impact of the Dodd-Frank Act onManufactured Housing• Dodd-Frank imposes new standardson mortgage lending designed to cureabuses in the real property mortgagemarket. However, the Act wouldhave the unintended consequenceof limiting the availability of creditfor low-cost affordable housing,including manufactured homes. Thevast majority of small balance loansused for the purchase of affordablemanufactured housing would beunfairly classified as predatory –“high-cost mortgages”.• Without recognition of the uniquepressures associated withmanufactured housing finance,Dodd-Frank’s “high-cost mortgage”provision lumps small balance loans– particularly loans used to purchaseaffordable manufactured housing –into the same category as subprimepredatory real property mortgages.While crafters of Dodd-Frankrecognized large multi-national banksand small community banks couldnot be regulated in identical ways; thesame realization was not reached formortgage loans.• A $250,000 loan and a $25,000 loancannot be regulated in the sameway. While the cost of originatingand servicing these two loans arethe same in terms of dollars, the costas a percentage of each loan’s sizeis significantly different. It is thisdifference, along with differencesin the costs of funds that cause thesmaller sized loan to violate caps inthe Act can be categorized as “highcost”or predatory.• Among manufactured homeowners,EXPRESSESCROWCOMPANYEXPERTS IN PERFECTING TITLEFOR PARK-OWNED HOMESCalifornia’s leading authority ontechnical issues concerningmanufactured housingtitle and escrowMobile/manufactured home andmobilehome park sales andrefinance escrowsStatewide service7812 EDINGER AVE. SUITE 300HUNTINGTON BEACH CA 92647(800) 669-6925 FAX (714) 848-9174info@ExpressEscrow.comPage 9potentially millions of families couldsee the equity they have built in theirhome wiped out. Because of thischange in Dodd-Frank, small balanceloans needed by those purchasingor refinancing existing manufacturedhomes could be essentially regulatedout of existence. This is due tothe increased liabilities and stigmaassociated with making a HOEPA“high-cost mortgage”. Lenderswould simply stop making theseloans, potentially cutting off a sourceof financing for half of the nation’snine million manufactured homes.• For a variety of reasons, most ofaffected buyers - who are primarilylow-to-moderate income - wouldhave few alternatives of purchasing ahome including:° ° traditional mortgage financingis not readily available to mostmanufactured home buyers;° ° availability of government-insuredand GSE programs is limited;° ° personal property lending iscontinued on page 10