Top National News

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"Banks Get New Leeway in Valuing Their Assets" [New York Times]
"FHA Losses Spur Talk of a Taxpayer Bailout" [Wall Street Journal]
"30-Year Mortgage Rate at Record Low" [Boston Globe]
"Fannie Cautions Servicers" [American Banker]
"Report Finds U.S. Mortgage Problems Increasing" [San Francisco Chronicle]

Industry News

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"Prefab Friday: Stillwater Dwellings" [Inhabitat]
"Habitat Could Soon Be Rehabbing Foreclosures" [WYFF4.com]
"Sales Rate Reaches 65 Percent in Phase 2 of Country Lakes" [Cape Coral Daily Breeze (FL)]


Banks Get New Leeway in Valuing Their Assets

The Financial Accounting Standards Board (FASB) has approved a rule change that will allow banks to report on their income statements certain assets at their value in a normal market, writing them down to market value only if the drop is "other than temporary." The fall in asset values would be indicated on their balance sheets, but critics contend that the change will permit banks to put off recognizing losses from bad loans. Another change approved by the FASB will force banks to disclose the impact of the new reporting rules, though the extent of the disclosures remains to be seen.
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From "Banks Get New Leeway in Valuing Their Assets"
New York Times (04/03/09) P. B1; Norris, Floyd

FHA Losses Spur Talk of a Taxpayer Bailout

A Senate hearing on April 2 focused on the FHA and a jump in seriously delinquent mortgages to 7.5 percent of all loans insured by the agency from 6.2 percent during the year-over-year period ended in February. The FHA is struggling to meet its affordable housing mission and maintain its self-funding structure, as its reserve fund slipped to 3 percent in fiscal 2008 from 6.4 percent in fiscal 2007. HUD Secretary Shaun Donovan said President Obama's 2010 budget will determine whether the premiums paid by borrowers will increase or taxpayer dollars will be used in the event that the agency's insurance fund is depleted.
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From "FHA Losses Spur Talk of a Taxpayer Bailout"
Wall Street Journal (04/03/09) P. A3; Holzer, Jessica; Timiraos, Nick

30-Year Mortgage Rate at Record Low

Freddie Mac reports that rates on 30-year mortgages fell to the lowest level on record for the second consecutive week. This week, average rates on 30-year fixed-rate mortgages declined to 4.78 percent, down from 4.85 percent a week ago. Refinancing activity has picked up because of the low rates, and the Mortgage Bankers Association says approximately 80 percent of mortgage applications came from borrowers seeking to refinance.
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From "30-Year Mortgage Rate at Record Low"
Boston Globe (04/03/09) P. 6

Fannie Cautions Servicers

Fannie Mae is rolling out new guidelines for its HomeSaver Advance Program that provides unsecured loans up to $15,000 to cover arrears for borrowers with mortgages in which all the credit risk is held by the mortgage giant. The government-sponsored enterprise says many servicers have made errors in issuing the loans, such as filling out the wrong paperwork, providing loans for ineligible mortgages or failing to submit missing paperwork within 90 days. Fannie Mae says servicers could be asked to buy back these defective advances, and the new guidelines will be applied retroactively.
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From "Fannie Cautions Servicers"
American Banker (04/03/09) P. 1; Berry, Kate

Report Finds U.S. Mortgage Problems Increasing

A new report from the Comptroller of the Currency and the Office of Thrift Supervision analyzing 34.7 million mortgages indicates that just over 10 percent of home loans were nonperforming at the end of 2008. The report shows a jump in 60-day delinquencies among prime borrowers to 2.4 percent in the fourth quarter from 1.11 percent in the first quarter of last year, while Alt-A delinquencies climbed to 9.1 percent from 5.18 percent over the same period. The re-default rate six months after modification for loans with a more than 10 percent reduction in payments was 22.7 percent, versus a 45.8 percent default rate for loans with a jump in monthly payments.
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From "Report Finds U.S. Mortgage Problems Increasing"
San Francisco Chronicle (04/03/09) Said, Carolyn


 
Prefab Friday: Stillwater Dwellings

Seattle-based prefab builder Stillwater Dwellings likens its new sd-i series homes to Lego block creations. Though the firm offers traditional prefabs, the sd-i series allows the buyer to pick and choose each module and arrange them in their own unique order. Buyers do this through a three-step process: first, choosing from one of six living modules; second, choosing a connecter module with a universal connector to bring the home together; and third, choosing bedroom, office, and garage modules. The buyer stacks the modules to make upper floors or connects them on the ground level for a one-story home, and then selects either a Fundamental, Natural, or Contemporary interior finish. Stillwater's architects aim to create fun, sustainable, and affordable prefabs, so each home is priced between $130-$199 per square foot.
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From "Prefab Friday: Stillwater Dwellings"
Inhabitat (04/03/09) Steffen, Bridgette

Habitat Could Soon Be Rehabbing Foreclosures

Habitat for Humanity is sending two factory-built homes to the Mississippi Gulf Coast region in 2009 to contribute to rebuilding efforts. The organization's chapter in Greenville County, S.C., also plans to ease the foreclosure crisis by providing already-built homes to displaced families. According to local officials, foreclosures have topped 3,000 foreclosures since mid-2008. While renovating an existing home is less expensive than starting from scratch, Greenville Habitat for Humanity spokesperson Monroe Free says there are risks to this approach. "The downside is you don't ever know what the cost is until you get in there," Free states. "There's always a risk that you're going to find things once you start the rehab that you didn't know about on the front end."
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From "Habitat Could Soon Be Rehabbing Foreclosures"
WYFF4.com (03/25/09)

Sales Rate Reaches 65 Percent in Phase 2 of Country Lakes

The sales rate for Phase 2 of the Country Lakes manufactured home development hit 65 percent in late March, according to the builder, LeeCorp Homes Inc. Buyers interested in one of the 11 remaining lots in the 32-unit development will pay $24,900 to $49,900, and they have access to land and home packages priced from the $130,000s. Phase 2 of the 55-and-over community is located near a freshwater lake with a scenic viewing area and gazebo, and residents will enjoy such amenities as a pool, clubhouse, shuffleboard court, tennis courts, and playground.
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From "Sales Rate Reaches 65 Percent in Phase 2 of Country Lakes"
Cape Coral Daily Breeze (FL) (03/23/2009)


Abstract News © Copyright 2009 INFORMATION, INC.

Among the challenges the manufactured housing industry faces with the new HUD installation standards is the requirement that homes located in areas subject to frost (most of the nation) be placed over frost-resistant foundations. The two solutions offered by HUD, footings placed below the frost line and concrete “floating” slabs, generally cost thousands of dollars more than traditional foundation and support systems.

The industry’s research arm, the Systems Building Research Alliance or SBRA, believes there is an alternative and has launched an initiative to develop an affordable, shallow, frost free foundation design. The concept is simple: if the home is installed in a manner that assures that the ground under the home is dry and will remain dry, the soil will not freeze. If the ground does not freeze, there is no need to install components intended to resist frost heave, such as concrete footings below the frost line. The concept follows from industry’s experience of installing millions of homes in the frost prone areas over decades with few problems.

Unlike most other SBRA projects that are funded, in part, by public agencies, the shallow foundation effort is supported entirely by industry. To complete the effort, SBRA will depend on companies with a stake in foundation design and keeping a lid on home cost to contribute to the effort. Minimum contributions are requested from retailers ($250), community operators ($500) and manufacturers ($2,000) to enable the project to move forward. Suppliers are also being asked to contribute to the effort. As an incentive, those contributing to the project by May 15, 2009 will receive the design approximately six months in advance of general distribution to the rest of the industry.

Project chair Mark Ezzo (Clayton Homes) noted that SBRA is aggressively focusing on new technologies that will hold the line on cost. Ezzo noted that “it is never a good time to increase housing costs, and in the current environment we are being particularly diligent about finding ways to lower the cost for the consumer.” Industry expert George Porter, an early and tireless advocate for the project, summed it up, “keep the ground dry, no frost heave. It’s not rocket science.”


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Why Do You Need to Be at the 2009 National Congress & Expo for Manufactured & Modular Housing (April 14-16, 2009) in Las Vegas?

FHA Loan Limits Increased, Tax Credits for Homebuyers, Sales and Marketing in a new era.....The Time is NOW for the Industry Turnaround.

• The FHA Loan Limits are now in effect- significantly increasing the ability to purchase a home for thousands of potential buyers. The $8,000 tax credit is also in effect. Boosted home sales means an increase in business and increase in market share. Get to the Congress and Expo to boost YOUR business.

• With over a dozen educational programs to choose from, learn cutting edge sales and marketing techniques in a challenging market; understand how to profit from “green” building; and increase your chances of generating traffic and closing the deal.

• Get AHEAD of the curve. The Congress & Expo offers you the BEST place to get the latest on FUTURE industry conditions. Know what is going to happen before it does.

- AND - Las Vegas is easy to get to, with cheap airfare and discounted hotel rates; you can do Vegas for under $1000; we guarantee it is WORTH it! Hotel room rates have been reduced to $145!!

The year has started a little bumpy, but with the upcoming spring sales and building season upon us, and some major changes benefiting homebuyers- good times will be here again, and for our industry, they may be here sooner than you think!

Make the most of this opportunity to be there at the beginning. The National Congress & Expo is the largest and ONLY annual national tradeshow for the manufactured housing and modular housing industry sectors.

Be part of something big! The Congress and Expo is drawing a crowd, including hundreds of community owners and operators, builders and developers, and manufacturers- all gathering to learn more about the MAJOR changes taking place to help homebuyer buy homes- and figuring out how our industry can continue to increase marketing share in today’s housing market.

The National Congress & Expo is the largest annual national tradeshow for the manufactured housing and modular housing industry sectors.

Top National News

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"October Construction Spending Drops 1.2 Percent" [Associated Press]
"New-Home Sales at Lowest Since 1991 in Oct. Data" [American Banker]
"US Treasury and the Fed: Too Close for Comfort?" [Christian Science Monitor]
"U.S. Rethinks Roles of Fannie, Freddie" [Wall Street Journal]
"Malls Are Next to Face Foreclosure" [Sarasota Herald-Tribune (FL)]

Industry News

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"Home Builders Find Something to Cheer" [Washington Post]
"Interest in Gypsum Worker Housing Jumps" [Vail Daily News (CO)]
"Manufactured Homes Get Pre-Holiday FEMA Push" [Trading Markets]
"A Prefabricated Future?" [Seeking Alpha]
"Living Through Hell and High Water" [WKRG.com News 5 (Alabama)]
"School Seeks Bids on Modular Houses" [Franklin News-Post (VA)]

MHI News

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"MHI Sends letters to the Honorable Ben Bernanke, Chairman of the Federal Reserve Board and the Honorable Henry Paulson, Secretary of the U.S. Department of Treasury to Address the Industry’s Inventory Finance Problem"
"Register for the NCC's December 3 Webinar - Creating a “Green” Community"
“Register Now for MHI's Winter Meeting to be Held in February 2-3, 2009 in New Orleans, LA"
"Register for The 2009 National Congress & Expo for Manufactured and Modular Housing to be Held April 14-16, 2009 in Las Vegas, NV"
“Enter to win 2009 Community of the Year or Retail Sales Center of the Year"
“Members Save BIG on FedEx® shipping services"
Join MHI and Help Shape The Future for the Manufactured and Modular Housing Industries



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October Construction Spending Drops 1.2 Percent

Construction spending fell an unexpected 1.2 percent in October, propelled by another big retreat in residential activity, reports the Commerce Department. Home building has moved consistently downward for the past two-and-a-half years, with the exception of just two months. The nonresidential segment now is faltering as well, with developers finding it increasingly difficult to secure financing due to the credit crisis.
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From "October Construction Spending Drops 1.2 Percent"
Associated Press (12/01/08) Crutsinger, Martin

New-Home Sales at Lowest Since 1991 in Oct. Data

Falling property prices and buyer uncertainty forced new-home sales down 5.3 percent to an annual rate of 433,000 units in October, marking a 17-year low, according to the Commerce Department. The median new-home price was down 7 percent year over year to $218,000; and while inventory contracted to a seasonally adjusted rate of 381,000, supply rose to 11.1 months. "As housing prices continue to decline in a number of markets, it's difficult to make a buying decision unless you absolutely have to," said D.R. Horton Inc. CEO Donald Tomnitz.
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From "New-Home Sales at Lowest Since 1991 in Oct. Data"
American Banker (12/01/08) P. 13

US Treasury and the Fed: Too Close for Comfort?

Some economists are concerned about the recent partnership blossoming between the U.S. Treasury Department and the Federal Reserve, while others note that Fed Chair Ben Bernanke sees the causes of the Great Depression as tied to a credit freeze, which he hopes to avoid in this economy. The Fed and the Treasury recently agreed to fund $800 billion in new lending programs, and the Fed will purchase up to $600 billion in debts issued or backed by Fannie Mae, Freddie Mac, and other housing-related firms. The Fed also plans to shore up securities tied to student loans, car loans, and other debts with $200 billion. While the partnership is commendable, others are concerned that the prized independence of the Fed from the administration and the president may be lost in the shuffle. Economist Anna Schwartz and others hope the Fed will return to monetary policy tools to tighten the supply of money, noting that with recent economic stimulus packages, the need for additional funding has passed.
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From "US Treasury and the Fed: Too Close for Comfort?"
Christian Science Monitor (12/01/08) Francis, David R.

U.S. Rethinks Roles of Fannie, Freddie

Congress and the Obama administration likely will restructure Fannie Mae and Freddie Mac in response to the economic crisis and conflicts between the companies' need to meet government demands to bolster the housing market and to deliver profits to shareholders. Mortgage industry consultant Andrew Davidson says one option would be to transform them into bank-controlled cooperatives that would create mortgage-backed securities for sale to investors and pay fees to the Treasury for explicit backing in the event of significant losses; a similar fee structure could be implemented for the Federal Home Loan Banks as well. However, there are concerns that bank-controlled cooperatives would not prop up the housing market to the degree called for by home builders and Realtors. Meanwhile, House Financial Services Committee Chairman Barney Frank (D-Mass.) says Fannie Mae and Freddie Mac's core functions of financing affordable housing and funding the mortgage market could be separated.
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From "U.S. Rethinks Roles of Fannie, Freddie"
Wall Street Journal (12/01/08) P. A5; Hagerty, James R.

Malls Are Next to Face Foreclosure

In the face of a prolonged slump in the housing sector, signs are emerging that the foreclosure crisis that has battered the residential property market is spilling over to affect the country's malls, hotels, and shops. Unlike home loans that typically are amortized over 30 years, commercial mortgages generally last for five to 10 years with a balloon payment due at the end of that period. Roughly $20 billion on malls, hotels, office and condominium complexes, and similar properties will come due in 2009--when Fitch Ratings analysts anticipate that the volume of late payments and defaults will double and possibly triple by the close of the year. The squeeze is being felt from Arizona to Michigan, but states with a large concentration of mortgages in the securities market--such as Florida, New York, California, and Texas--are particularly vulnerable.
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From "Malls Are Next to Face Foreclosure"
Sarasota Herald-Tribune (FL) (12/01/08) Apuzzo, Matt



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Home Builders Find Something to Cheer

U.S. home builders took heart as mortgage rates moved south last week, thanks to the federal government's campaign to stimulate consumer spending--including through home purchases. The optimism showed as the 25 publicly traded companies in the sector gained 15 percent in three trading sessions Nov. 21-25. Manufactured housing concern Cavco Industries, meanwhile, emerged as one of top-performing builders for the year, down just 14 percent. That compares to the wider field of builders, which was down 39 percent for 2008.
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From "Home Builders Find Something to Cheer"
Washington Post (11/30/08) P. F2

Interest in Gypsum Worker Housing Jumps

Initial construction at Gypsum, Colo.'s Stratton Flats has created interest in Eagle County's newest workforce housing development. Two houses have already gone up and a four-plex is underway in the modular community. Eight single-family houses and townhouses have been sold, and money has been paid on 14 condominiums. The finished development will be a combination of 339 deed-restricted and free-market condominiums, townhouses, and single-family homes. Economic Council of Eagle County executive director Don Cohen notes that since Stratton Flats demands fewer up-front expenses than the majority of regional developments, it is in a better position to survive the bad economy. The modular houses are pre-made in a plant, then sent in sections when they are bought, and later put together on site. "Some kinds of developments you have so much infrastructure that has to go in, the pre-sale is really important," explains Cohen. But, with modular housing, "there's no speculative buying." Sales manager Andy Forstl explains that Stratton Falls is providing a lease-to-own product to individuals who might not have enough money for a down payment. Deed-restricted houses mandate a $3,000 down payment, and purchasers need a $5,000 down payment for the free market houses.
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From "Interest in Gypsum Worker Housing Jumps"
Vail Daily News (CO) (11/30/08) Outcalt, Chris

Manufactured Homes Get Pre-Holiday FEMA Push

The Federal Emergency Management Agency (FEMA) is working to get all eligible Texans who lost their homes due to Hurricane Ike into appropriate housing as soon as possible. While thousands of impacted residents have already located alternatives to their short-term housing requirements, FEMA and its Texas partner--the Governor's Division of Emergency Management (GDEM)--are trying to expand the number of eligible residents who have moved into manufactured homes. FEMA Community Relations specialists are working in some of the worst-hit communities on the upper Gulf Coast to simplify the process of manufactured home installations. In the town of Bridge City, over 75 percent of the Texans sanctioned for temporary direct housing--and whose location was determined to be feasible--have moved into manufactured units. In addition, Bridge City recently broke ground on the state's first Hurricane Ike temporary mobile home development site. So far, FEMA and GDEM have listed 3,213 households as eligible for manufactured housing. Of that amount, 1,419 Texans have signed occupancy deals, meaning they have moved into a mobile home or park unit. FEMA also is looking for feasible sites for the manufactured houses that have yet to be implemented for those on the list of eligible applicants.
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From "Manufactured Homes Get Pre-Holiday FEMA Push"
Trading Markets (11/28/08)

A Prefabricated Future?

While the housing crisis is still going strong, there are certain segments in the industry that could wind up stronger once it finally fizzles out. Manufactured housing firms like Champion Enterprises, Fleetwood Enterprises, and Palm Harbor Homes will significantly benefit from the present downturn. Manufactured homes are more environmentally friendly; and their construction demands fewer materials, overhead, and employees to produce. Champion said during its third-quarter conference call that it will continue promoting alternate products in regional markets, with special emphasis on multi-family and commercial projects. The company added that its business units in Canada and the United Kingdom are still lucrative, cash flow-positive, and have not witnessed the amount of decline that it is seeing in the United States. In Canada, Champion shipped more than 3,350 housing units during the first nine months of 2008. Meanwhile, in the United Kingdom, Champion's backlog continues to be high, at $235 million.
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From "A Prefabricated Future?"
Seeking Alpha (11/27/08) Weil, Judy

Living Through Hell and High Water

Residents of Bayou La Butre, Ala., are using nearly $16 million in FEMA grants to place modular homes in areas of the city devastated by recent storms. The federal agency offered $15.7 million to help reconstruct areas of the state; but Bayou La Butre Mayor Stan Wright was the only local leader to apply for the aid, thus becoming eligible to receive the full amount. The funds were used to purchase 100 single-family homes in two new subdivisions, Safe Harbor Estates and Safe Harbor Landing. Each factory-built unit is founded at more than 80 feet above sea level and is designed to handle wind speeds of 150 miles per hour. Residents will pay 20 percent of their income toward the homes and will eventually be given the option to purchase them.
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From "Living Through Hell and High Water"
WKRG.com News 5 (Alabama) (11/27/08) Craig, Tiffany

School Seeks Bids on Modular Houses

The Franklin County school system in Franklin, Va., is seeking a buyer for two modular home units constructed by students at Franklin County High School (FCHS). The deadline to submit a sealed bid is 12 p.m. on Dec. 1. Building trades students began the project in the 2007-2008 school year and continued working on the homes this fall when they returned to classes, said Dr. Mark Church, the career and technical curriculum administrator at the high school. Each fully framed unit forms a 1,089-square-foot home with three bedrooms and two bathrooms, with a frame that allows for the construction of an additional bathroom. The units--which are being sold in one transaction--must be moved from the John L. Smith Technical Center within 15 days of their purchase, officials said.
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From "School Seeks Bids on Modular Houses"
Franklin News-Post (VA) (11/28/08) Turner, Joel