CFPB / Deregulation


#1

Politics aside, it’s hard to see the direction of the strong deregulation trend dramatically changing over the next 3 years. If you’re operating in a state where CFDs are basically fair game, I’m starting to feel more and more comfortable with the risk. Especially as it appears favorable MH-specific legislation is near as well which could make Dodd-Frank effectively moot in the event we get some sort of cap or threshold. Have a feeling @RishelConsultingGroup may disagree?


#2

That would be great. I think we are pretty small potatoes in the lending world and I am always impressed by how far over the line those who get in trouble go, but it would be nice i the CFD is indeed defanged.


#3

Impressed or depressed?


#4

The fact is, rent is an economic concept that really can’t be sorted cleanly from the time value of money (interest). If something you have rights over is desired by others, then you can extract rents. It doesn’t matter whether you call it rent or “installment payment” and the only question in the affordable-housing consumer’s mind is “HOW MUCH DOWN” & “HOW MUCH PER MONTH.” They don’t even get to the “HOW LONG UNTIL IT’S MINE.”

Having a place to live is something people will pay money for. If the payment looks like a stream of payments over time and the duration is known, and the “discount rate” then the home has a certain “value” economically. Why make such a big deal about INSTALLMENT SALE on the one hand but relatively little oversight of RENTING on the other? It’s really economically the same thing (until the sale is completed).

The only thing that is sort of different is whose responsibility is it to insure / maintain / pay taxes. If you’re the landlord or if you’re the creditor, you still want to make sure that the home is okay to be “repossessed” if need be, and the “value” of the “repossessed” home hopefully is more than what you’re still owed. Well that’s the risk you take.

A down payment helps cover those costs if you have to “repossess.”

Imagine the judge saying MHP owners are taking advantage of the poor consumers with this “bait & switch” or bad money lending and then kicking the poor struggling tenants out just before they “pay off” or earn their right to stay forever, or something. You have to wonder, “hey, what was the alternative for this family? They paid the same amount they would have paid anyway in rent!”


#5

So do you find yourself doing more straight rentals these days then?