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Congressman Denny Heck

Representing the 10th District of Washington

Statement from Congressman Denny Heck following passage of bill to incentivize abusive practices in manufactured housing sales

Dec 1, 2017
Press Release

WASHINGTON, D.C. – After the U.S. House of Representatives passed H.R. 1699, the Preserving Access to Manufactured Homes Act of 2017, U.S. Representative Denny Heck (WA-10) issued the following statement:

“Supporters of this bill claim this change provides more Americans access to affordable housing, but all it does is make our most vulnerable people subject to more predatory practices that often cause them to lose their home. We’ve seen evidence of this already happening, and endorsing this activity will cause even more heartbreak for aspiring homeowners.

“Predatory loans, hidden fees, and deceptive lending practices are not a valid part of making the American Dream possible for more families. Let’s work on common sense, bipartisan measures that allow for access to responsible financing towards homeownership, and not take away important protections established by Congress and enforced by the Consumer Financial Protection Bureau.”

The Preserving Access to Manufactured Housing Act makes two big changes to consumer protections for people buying manufactured homes. It would change the definition of a “mortgage originator” so that salesepeople at manufactured home retailers are exempt from the rules on originators even if those salespeople do the same things loan originators do, like assisting them in applying for credit. The bill would also relax the circumstances where special consumer protections kick in on "high-cost" loans under Home Ownership and Equity Protection Act (HOEPA).  High-cost is defined as a certain spread above the average prime offering rate (currently 4.25 percent).  Right now, these additional protections for kick in for non-mortgage loans at 10.75 percent (6.5 percentage points above APOR), for loans of $50,000 to $75,000, or 12.75 percent (8.5 points above APOR), for loans under $50,000.  This bill raises the threshold to 14.25 percent (10 points above APOR) for all non-mortgage manufactured-home loans.  The bill would also raise the threshold for high fees that trigger HOEPA protections to the greater of 5 percent of the total transaction amount or $3,000, whichever is greater.

According to Home Mortgage Disclosure Act (HMDA) data, obtained from the Consumer Bureau, this new interest rate trigger would have exempted 58 percent of manufactured home loans originated in 2013 from HOEPA protections.

A joint investigation by The Seattle Times and Center for Public Integrity found that Clayton Homes, the largest manufactured homebuilder in the United States, trapped low-income borrowers with loans for manufactured homes they could not afford and eventually took away their home.

Heck is a member of the House Financial Services Committee and voted against the Preserving Access to Manufactured Homes Act of 2015, which passed the House on April 14, 2015. The bill did not pass the Senate.