January 2010 MH Loan Market Update by Rory Manning

January 2010 MH Loan Market Update
Tue 01/05/10 07:40:14 pm
by Rory Manning

The New Year rings in with many changes and challenges for the entire lending industry, especially for those of us that specialize in Manufactured Home lending.

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SAFE Act / Licensing

While the SAFE Act originated in 2008, it has been a major effort for states to coordinate with the National Mortgage License System and Registry. The details of the program are here: http://mortgage.nationwidelicensingsystem.org/safe/Pages/default.aspx

The Federal Act called for states to have training and registration programs in place by July 2009. While a few states are enforcing new guidelines as of January 1st, 2010, most have extended their requirement for mortgage banker and broker licensing until October 2010. In some states, the required education changed as of January 1 and new course material may not be available until March.

One question, that keeps coming up is "Are private lenders subject to education and licensing laws required under the SAFE Act and New Reg Z Rules?" The answer is a simple, "Yes!" If in the normal course of business, you underwrite manufactured home loans, as a seller or retailer or both, you are required to be in compliance with the new rules. We've been ahead of the curve and have practical solutions for our strategic partners that are concerned about the new regulations.

Title One

We are continuing to monitor the status of Title One rulemaking. MHI continues to work with FHA. Here's the most recent update.

On December 15, MHI staff had a second meeting with FHA Commissioner David Stevens since he took office in July 2009. In addition to Commissioner Stevens, staff from Ginnie Mae, the FHA Title I program office, the HUD Office for Intergovernmental Affairs, and the Manufactured Housing Program Office were in attendance. The purpose of the meeting was to brief the Commissioner and staff on the continued challenges that the industry is facing, particularly in the area of finance. MHI was similarly briefed on several important issues. MHI learned that the final changes to the Title I Mortgagee Letter were imminent. However, in addition to the Mortgagee Letter, FHA will also need to issue a rulemaking on the Title I program. While it is still unclear at this point if Ginnie Mae is going to require both the Mortgagee Letter and the regulation to lift the moratorium, at the meeting, MHI urged Ginnie Mae to lift the moratorium on Title I issuers as soon as the Mortgagee Letter is published. MHI will work closely with FHA and Ginnie Mae staff to ensure the program is expedited as quickly as possible.

MHI also raised the issue of the repeal to the FHA Guide to Permanent Guide Foundations now that the HUD Installation Standards are widely used in most states. The conflict between the two has created confusion and the FHA policy needs to be revised to permit the Model Installation Standards to be effective for all FHA-insured mortgages in HUD approved states. While MHI was originally disappointed several months ago to learn that a rulemaking was required, FHA is going to be reexamining the process and working closely to resolve this issue soon.

We'll . However, the secondary market for Title One loans is nonexistent. We don't expect a fluid market soon. We do believe the product could be a shot in the arm for the industry if GNMA pools will accept the loans and an investor is willing to underwrite them. Those are some big IFs in our opinion.

Secondary Markets

The secondary markets for land home transactions took a serious hit this past year. To insure compliance, we've limited the states where we offer land home loans. . The secondary landscape for FHA manufactured home loans has shrunken to a staggering low. There are solutions to the land home financing markets. We continue to work with retail and financing partners to make sure we can offer land home lending with confidence.

We hope the market will settle down this year. Staying on top of the changes that affect our strategic partners is our top priority as we enter 2010.

Rory Manning, President of Park Loan Funding, LLC www.parkloan.net has 20 years experience as a mortgage professional. The last dozen years have been dedicated to financing affordable factory built housing for Hard Working Americans. Based in Denver, Colorado. Rory has developed innovative industry software and finance systems including MH Express, MH Value and Floor Plan One.

Floor Plan One

A Unique Factory Funding

Source for New Home Sales

We've had a great response to the Floor Plan One program, and have received a lot of park living questions about how it works. We've kicked off the Pilot Program in California.

This is a one step process for new homes going into lease communities or on leased land. We work with the Buyer and Retailer to provide a seamless loan program that provides a permanent loan and a One Time Floor Plan Loan for the payment to the factory plus setup. The prequalification process is easy. To get started, all we need is a loan application with projected sales price and estimated invoice plus setup and additions. We finalize the numbers and approvals and fund 100% of the invoice and setup into escrow. We have a great deal of flexibility with the draw process and provide personal care to the Buyer and Retail Representative.

Preserve your capital and sell more homes. Let us show you have this innovative program works.

Market Update

Retail, Resale and Refinance

Chattel investors have remained steady with In Park rates. Our new 10 year program for A plus credit has rates as low as 6.25%. Applications with a minimum of 10% or more down are getting the highest approval rates. Whether we are using NADA valuation or appraisals, values are still being scrutinized.

FHA land home rates have improved a bit for Manufactured Homes and seem to be hovering around 6.625% to 6.875%. We haven't seen the frantic rate movements we witnessed this time last year. We're not so sure the working American agrees with the Federal Reserve regarding the recession, but we do. The market will be cleaning up short sales and foreclosures for some time to come, but we are seeing some measurable market improvement.

Land Home Portfolio Loans

An Alternative to FHA

dream hoome Our FHA One Time Construction Loan continues to be a popular product, but there are occasions when an advance based loan is better for your Land Home transactions. While portfolio rates are a bit higher, our portfolio products close faster with lower closing costs and No Up Front or Monthly FHA Mortgage Insurance.

Post and Read Comments about January 2010 MH Loan Market Update

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