Bills
| 3.23.22

Changing the Financing Rules for Mobile Homes and Other Manufactured Housing (H.R. 1699)

Do you support or oppose this bill?

What is H.R. 1699?

(Updated March 5, 2019)

This bill would amend the Truth in Lending Act to exempt manufactured home (or mobile home) retailers from being covered by laws that apply to mortgage originators — unless they receive compensation that is greater than they would receive in a comparable cash transaction. It would also change the disclosure thresholds for high cost mortgages from 8.5 percentage points on a less than $50,000 transaction, to 10 percentage points on a transaction less than $75,000. This amount would be changed to reflect changes in the Consumer Price Index — which measures inflation — since this portion of the Truth in Lending Act was last updated.

Argument in favor

Manufactured housing is typically used by people of low and moderate incomes, and modifying these regulations will save those consumers money and help them into affordable housing situations.

Argument opposed

The change in disclosure thresholds serves special interests and will undermine consumer protections, which could lead to predatory loans and home buyers who are over-extended.

Impact

People who want access to low-cost, manufactured housing; mortgage originators; and the Truth in Lending Act.

Cost of H.R. 1699

The CBO estimates that enacting this bill would cost less than $500,000.

Additional Info

In-Depth: Sponsoring Rep. Andy Barr (R-KY) introduced this bill to lessen the regulatory burden on consumers looking to buy manufactured housing:

“If this legislation were to pass, and I believe it will, we will no longer face a situation where the federal government is protecting people right out of their homes. Instead, more Americans will have access to affordable manufactured housing again, and I believe that greater access affordable housing is something that should and can earn the support of both Democrats and Republicans. Affordable housing, especially in rural America, that’s not a Republican or Democrat issue, that’s basically an issue of the American dream.”

Some House Democrats have opposed this bill, writing in its committee report:

“We believe that low-income families that rely on manufactured housing deserve the same anti-predatory lending standards as other families. H.R. 1699 would not create more access to affordable housing, but instead allow an already incredibly profitable industry to make even more money by charging higher interest rates and fees to low-income borrowers while simultaneously decreasing consumer protections.”

This legislation passed the House Financial Services Committee on a 42-18 vote and has the bipartisan support of 65 cosponsors, including 58 Republicans and seven Democrats. A previous version of this bill passed the House during the last session of Congress on a 263-162 vote before stalling in the Senate.


Of Note: The lower loan values that are associated with manufactured homes have triggered the high cost provisions of the Truth in Lending Act because — as Reuters explains:

“While the cost of originating a $250,000 and $25,000 loan are generally the same in terms of real dollars, the cost as a percentage of loan size is significantly different.”

The Consumer Financial Protection Bureau found that 68 percent of all manufactured housing loans in 2012 fell into the category of “higher-priced mortgage loans” compared to only three percent of site-built homes.


Media:

Summary by Eric Revell

(Photo Credit: SportSuburban / Flickr)