[Congressional Record Volume 163, Number 200 (Thursday, December 7, 2017)]
[Extensions of Remarks]
[Pages E1671-E1673]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         PRESERVING ACCESS TO MANUFACTURED HOUSING ACT OF 2017

                                 ______
                                 

                               speech of

                           HON. KEITH ELLISON

                              of minnesota

                  in the house of representatives

                        Friday, December 1, 2017

  Mr. ELLISON. Mr. Speaker. I oppose this bill. It would remove 
consumer protections put in place by the Consumer Financial Protection 
Bureau. H.R. 1699 would weaken Home Ownership and Equity Protection Act 
(HOEPA) requirements for people who buy manufactured homes. HOEPA 
requires additional disclosures to people taking out a loan to buy a 
home when the interest rate is 6.5 percent or 8.5 percent above the 
annual percentage rate (APR) for the average Prime Offer Rate (APOR). 
Those disclosures include: Explaining the consequences of default, 
disclosing loan terms and monthly payments, and ensuring the borrower 
receives homeownership counseling.
  In addition, the Consumer Financial Protection Bureau, under 
Regulation Z, forbids firms selling manufactured homes from steering 
buyers into loans. This bill would remove these protections.
  Manufactured homes are the biggest source of unsubsidized affordable 
housing in the country. More than 17 million people live in 
manufactured homes. If you removed manufactured housing, our national 
homeownership rate would fall 6 percent. The homes are of good quality.
  Thanks to the Dodd Frank Wall Street Reform and Consumer Protection 
Act, high-cost loans to manufactured homeowners are rare. Wednesday, we 
received updated Duty-to-Serve requirements from the Federal Housing 
Finance Agency which will provide even more affordable financing to 
these buyers.
  Before Democrats enacted the Dodd Frank Wall Street Reform and 
Consumer Protection Act, the financing for manufactured homes was 
notoriously predatory. If you want to see how badly manufactured 
homebuyers used to be treated, read the award-winning series of 
articles in the Seattle Times. The investigation showed that the main 
seller of manufactured homes--Clayton Homes--steered borrowers to 
lenders like Vanderbilt Mortgage and 21st Mortgage which Clayton 
actually owned.
  Clayton's loans are particularly expensive compared with those of its 
peers. The company locks buyers in loans at interest rates that can 
exceed 15 percent. If this bill, H.R. 1699 was enacted, borrowers could 
again be asked to pay 14 or 15 percent without being told that there 
might be cheaper options.
  I've also introduced bills to help manufactured home buyers:
  The Energy Efficient and Manufactured Home Act (H.R. 515) helps 
manufactured home buyers replace their outdated homes.
  Two bills--the Frank Adelmann Manufactured Housing Community 
Sustainability Act, (H.R. 3296) and the Fair Tax Treatment for 
Manufactured Home Communities (H.R. 3399)--help residents of mobile 
home parks buy the land and run their community as a cooperative.
  Let's bring those bills to the House floor. Not this bill which would 
steer borrowers to high-cost lenders. Now is the time to keep hard 
fought protections for manufactured home buyers so they re can buy 
homes they can afford. People who work with manufactured homebuyers 
oppose this bill. Therefore, I include in the Record letters of 
opposition from the Housing Assistance Council, Americans for Financial 
Reform and MHAction.
  Protect homebuyers. Oppose H.R. 1699.


                                   Housing Assistance Council,

                                Washington, DC, November 27, 2017.
     Hon. Keith Ellison,
     House of Representatives,
     Washington, DC.
       Dear Representative Ellison: As a national voice for 
     affordable rural housing, the Housing Assistance Council 
     (HAC) opposes HR 1699. HR 1699 would eliminate reasonable 
     safeguards for consumers of manufactured homes put in place 
     by the Consumer Protection Financial Bureau (CPFB). Examples 
     include protections against high-interest loans when lower 
     cost options are available.
       Manufactured homes are an important source of housing for 
     millions of Americans, especially those with low-incomes and 
     in rural areas. While the physical quality of manufactured 
     homes continues to progress. the basic delivery system of how 
     these homes are sold and financed needs improvement. HAC 
     continues to work with manufactured housing stakeholders--
     including the

[[Page E1672]]

     industry, housing finance entities. and consumer-focused 
     groups--to improve the system, starting with improved data 
     collection. Moreover, ``Duty to Serve'' requirements of 
     Fannie Mae and Freddie Mac represent an important infusion of 
     capital into the manufactured housing market. HR 1699's 
     enactment could undermine such progress.
       As housing costs rise for poor rural Americans--exacerbated 
     by recent natural disasters--it is important that Congress 
     seek opportunities to make housing for the rural poor more 
     accessible and fair. HR 1699 is a step in the opposite 
     direction.
           Sincerely,
                                                    David Lipsetz,
                                               Executive Director.
                                  ____
                                  


                               Americans for Financial Reform,

                                Washington, DC, November 30, 2017.
       Dear Representative: On behalf of the undersigned community 
     organizations and public interest groups, we ask you to 
     oppose H.R. 1699, the so-called Preserving Access to 
     Manufactured Housing Act of 2017. This bill poses significant 
     dangers for consumers and homebuyers by exempting 
     manufactured housing lenders from requirements that protect 
     borrowers against inappropriately high-cost loans.
       This bill would undermine already vulnerable homeowners by 
     stripping away protections created by Congress and 
     implemented by the Consumer Financial Protection Bureau 
     (CFPB). These protections were put in place for a reason: to 
     give manufactured-homeowners the same protections as 
     traditional homeowners. The last housing crisis showed that 
     loan-originator compensation and exorbitant loan pricing were 
     particular areas of abuse. Congress and the CFPB decided to 
     protect homeowners from those practices. However, H.R. 1699 
     would repeal those protections for the buyers of manufactured 
     homes. In particular, H.R. 1699 would reverse much of this 
     progress by:
       Raising the interest-rate trigger for protections under the 
     high-cost mortgage protections of the Home Ownership and 
     Equity Protection Act (HOEPA).
       Under H.R. 1699, chattel loans (the type used for most 
     manufactured homes) that are less than $75,000 and that have 
     an interest rate close to 10 percentage points above the 
     prime rate would no longer receive HOEPA protections. In the 
     current market, this would permit an interest rate of more 
     than 13% for a 15- or 20-year loan on a family's home 
     mortgage without enhanced protections. In comparison, the 
     going rate for traditional real-estate mortgages is around 4% 
     or less.
       Raising the points-and-fees trigger for HOEPA protections.
       Currently, borrowers who sign high-cost loans get HOEPA's 
     protections if the loan has points and fees totaling the 
     lesser of 8% of the loan amount or $1,000 for loans under 
     $20,000 and 5% of the loan amount for larger loans. However, 
     under H.R. 1699, borrowers would not be protected for chattel 
     loans under $75,000 until the points and fees exceeded the 
     greater of 5% or $3,000. This would weaken protections for 
     low-income homeowners where they are needed most. This means 
     that a homeowner with a $70,000 chattel loan could pay almost 
     $3,500 in documents or other junk fees without getting any of 
     the federal protections intended for such borrowers. It also 
     suggests that every loan less than $60,000 will incur $3,000 
     in fees regardless of actual origination costs.
       Exempting manufactured-home retailers from the definition 
     of mortgage originators.
       This would perpetuate the conflicts of interest and 
     steering that plague this industry and allow lenders to pass 
     additional costs onto consumers. This provision would also 
     stifle competition and likely discourage new entrants to the 
     manufactured housing finance market, just as Fannie Mae and 
     Freddie Mac begin implementing their plans to serve this 
     sector.
       Despite claims from industry lobbyists that the new 
     protections are squelching manufactured housing lending, the 
     data tell a different story. There was an initial dip in 
     lending in 2014, the year the new rules went into effect. 
     However, since then, lending volumes have started to recover. 
     In 2015, lending volume was roughly similar to what it was 
     before the new rules went into effect. And these loans were 
     broadly safer, without the predatory features that were 
     common before the new rules, and few of them had very high 
     rates and fees. Last year, loan volume decreased slightly by 
     about 5 percent--however, loan quality remained improved. As 
     the industry adjusts to the new standards and as new 
     competition enters the market, we expect loan volumes and 
     loan quality to continue improving. Historically, failure 
     rates for these loans have been exceedingly high. The 
     industry wide default rate for most manufactured-home loans, 
     those made as personal property loans, has been about 28 
     percent. Improved loan quality as a result of the Dodd-Frank 
     rules should decrease this astronomical default rate.
       In short, H.R. 1699 would harm homeowners through weaker 
     consumer protections and costlier loans that are harder to 
     repay. It would make homeownership more costly for those who 
     can least afford it.
       We strongly urge you to stand up for consumers and oppose 
     H.R. 1699.
           Sincerely,
       Allied Progress; Americans for Financial Reform; Center for 
     Responsible Lending; Consumer Action; NAACP; National 
     Association of Consumer Advocates; National Consumer Law 
     Center (on behalf of its low-income clients); National Fair 
     Housing Alliance; National Manufactured Home Owners 
     Association; Prosperity Now (formerly CFED); UnidosUS 
     (formerly National Council of La Raza); Woodstock Institute; 
     California Coalition for Rural Housing (CA); Housing and 
     Economic Rights Advocates (CA); National Housing Law Project 
     (CA); San Marcos Mobile Home Residents Association (CA); The 
     Committee to Elect Pierre Beauregard for Congress (CA).
       AMISTAD (CO); C-MOB Boulder (CO); Orchard Grove Neighbors 
     Association (CO); Vista Village Homeowners' Association (CO); 
     Vista Village Manufactured Home Association (CO); Honorable 
     Al-Bey J.L.Esq. & Affiliates, LLC. (DE); Affordable 
     Homeownership Foundation Inc. (FL); Jacksonville Area Legal 
     Aid, Inc. (FL); MHOAI (IL); Coasap (IA); Public Justice 
     Center (MD); Massachusetts Communities Action Network (MA); 
     All Parks Alliance for Change (MN); Opportunity Alliance 
     Nevada (NV); New Hampshire Community Loan Fund (NH); Native 
     Community Finance (NM); Coalition on Human Needs (C.H.N.) 
     (NY); Friends of the North Country, Inc. (NY); HomeSmartNY 
     (NY); MHAction (NY).
       Mobile Manufactured Homeowners Association Suffolk Inc. 
     (NY); National Federation of Community Development Credit 
     Unions, Inc. (NY); North Carolina Justice Center (NC); CASA 
     of Oregon (OR); Network for Oregon Affordable Housing (OR); 
     Fayette County Community Action Agency Inc. (PA); Cantrell 
     Legal PC (SC); New Level Community Development Corp. (TN); 
     Addison County Community Trust (VT); CVOEO Mobile Home 
     Program (VT); Law in the Public Interest, L3C (VT); Helping 
     Overcome Poverty's Existence, Inc. (VA); Virginia Housing 
     Alliance (VA); H&R Properties of River Falls LLC (WI); 
     Metropolitan Milwaukee Fair Housing Council (WI).
       As manufactured homeowners, we are writing to express our 
     opposition to the Preserving Access to Manufactured Housing 
     Act of 2017 (H.R. 1699). MHAction works with homeowners and 
     residents in manufactured home communities across the country 
     on housing and economic justice issues. We believe that 
     manufactured home communities play a key role in providing 
     affordable, safe and accessible housing for all families.
       This bill would make it easier for dealers to steer 
     potential buyers of manufactured homes, commonly referred to 
     as mobile homes, to high cost loans resulting in financial 
     hardship for borrowers. This bill would remove recent 
     consumer protections for manufactured homebuyers implemented 
     by the Consumer Financial Protection Bureau. This bill, if 
     passed, would only undermine the economic and retirement 
     security of thousands of prospective manufactured homeowners.
       I am passed, this legislation would add additional fuel to 
     the harmful trends that are chipping away at this important 
     affordable housing sector that thousands of seniors, low-
     income workers and immigrant families rely on for their 
     housing needs. Beyond the abusive and discriminatory lending 
     practices that have been well documented in an award-winning 
     series of articles in the Seattle Times, the manufactured 
     housing sector overall is bearing witness to disturbing 
     trends that are disrupting the housing security of families 
     across the nation.
       Over the past 20 years, manufactured home communities 
     increasingly have gone from ``mom and pop'' enterprises to 
     ownership by large, multi-state corporations and private 
     equity. While many residents own their own homes, they pay 
     rent, known as lot fees, for use of the land. The increase of 
     multi-state, corporate ownership has brought with it an 
     unsustainable business model that is based on rapidly 
     escalating lot fees and decreasing investments in community 
     maintenance. This creates an economic trap for homeowners, 
     who are unable to move their home for structural or 
     regulatory reasons and therefore must either pay increasingly 
     high lot fees or abandon their property.
       Cost cutting by corporate owners also leads to decreasing 
     investment in community maintenance resulting in increased 
     wastewater treatment/septic system failures, improperly 
     maintained roads and other infrastructure issues. Each act of 
     disinvestment increases the economic, health and safety risks 
     for manufactured homeowners and negatively impacts the 
     quality of life of the surrounding community.
       Our organization views H.R. 1699 as simply another 
     indication of harmful trends being perpetrated by corporate 
     community owners and predatory lenders that are causing havoc 
     to the economic, retirement and housing security needs of 
     manufactured home owners. Please retain the Consumer Bureau's 
     rules that protect manufactured home buyers from loans that 
     strip their wealth. We are asking that you oppose H.R. 1699.
       Signed on behalf of MHAction and the 16,873 members we 
     represent.
       Aimee Inglis, California; Patti Ann Rose, California; 
     Yvonne McCurley, California; Cesiah Guadarrama Trejo, 
     Colorado; Maria De La Luz Galicia, Colorado; Clara McNichol, 
     Delaware; Patricia Norberg, Delaware; Samuel Saunders, 
     Delaware; Terry Saunders, Delaware; Marjorie Mathers, 
     Florida; Debra Kiel, Illinois; Jeffrey Kiel, Illinois; Linda 
     Reynolds, Illinois; Pat Bohlen, Illinois; Terry Nelson, 
     Illinois; Ronel Remy, Massachusetts; Shandra BP-Weeks, 
     Michigan; Amanda Devecka-Rinear, New Jersey; Joe Mangino, New 
     Jersey; Dianne Enriquez, New York; Kevin Borden, New York; 
     Nathalie Hernandez, New York; Rachel Rivera, New York; 
     Richard Robinson, Utah; Sondra Robinson, Utah.

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