House Votes to Amend Part of Dodd-Frank to Make Manufactured Home Mortgages Affordable

Federal lawmakers Tuesday voted to amend the 2010 Dodd-Frank reforms by making it easier for low-income Americans to afford mortgages on mobile homes. But opponents in high places say the bill will just make things worse.

The first measure, which passed 263-162, would alter the meaning of “high cost" mortgages for manufactured housing by exempting mortgages from the classification if the transaction is less than $75,000, the annual percentage rate is 10 percent or lower, and if the mortgage points and fees don’t exceed $3,000.

The Preserving Access to Manufactured Housing Act was introduced almost two years ago to the day by Rep. Stephen Fincher (R-Tennessee) and received immediate bipartisan support. Fincher called manufactured housing “a critical resource for low and moderate-income families across the United States” and roundly criticized the “inflexible” financing process that turned lower-cost homes into higher-cost transactions once all the papers were signed.

“Unfortunately, due to mortgage regulations issued by the Consumer Financial Protection Bureau, access to financing for manufactured homes has been seriously harmed,” Fincher said. “Lenders are no longer able to offer small-balance loans, which are often used for the purchase of affordable manufactured housing, because CFPB rules unfairly sweep a large percentage of these loans into the ‘high cost’ designation.”

Because so many lenders have been unable to offer these loans and have been forced to stop providing technical assistance to consumers during the home buying process, the trickle-down effect has forced many mobile home owners to try to refinance, but end up selling because they can’t get good refinancing, Fincher said.

Though supported on both sides of the Congressional aisle, the Fincher bill does have strong opponents among Democrats, chiefly President Obama, who has threatened to veto the bill should it cross his desk. The key component in the opposition, according to The Hill, is that the president and many powerful Democrats say the language of the bill will open the door for predatory lending that will end up negating any reforms intended under the act.

Rep. Maxine Waters (D-California) has been the leading voice of opposition in the House. Two years ago she was a major supporter, but became concerned with the language of the bill as she and her colleagues looked more closely at what it said. Waters during Tuesday’s vote said that the bill is “a solution to a problem that doesn’t exist.” She went on to say that the investigative journalism organization Center for Public Integrity “have all shown us that this measure would not create access to affordable housing, but would instead allow an incredibly profitable industry to make even more money by charging exorbitant interest rates and fees to low income borrowers.”