A Must Read by Frank Rolfe

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ST. LOUIS, Jan. 6, 2016 /PRNewswire-USNewswire/ -- The following is a statement by Frank Rolfe:

The PBS News Hour recently ran a segment titled "Bad Bargain? Manufactured Homeowners Feel the Financial Strain", as a part of their "Chasing the Dream" series. Apparently, the reporters didn't listen to their own facts and statistics, because they clearly demonstrated that manufactured homes are a fantastic bargain for the consumer, and not the nemesis that they intended. They were apparently blinded by their political agenda, and could not see the forest for the trees.

The least expensive housing option in any market

This segment showcased two manufactured homeowners. The first, Carla Burr, bought a manufactured home for $113,000 in Chantilly, Virginia, where the median home price is over $500,000. The second, Bob Thompson, paid $90,000 for a manufactured home in Winchester, Virginia, where the median home price is a little under $200,000. So both customers paid between 50% less and 80% less than their other home purchase options. That's the most important point of the segment, in my opinion.

Superior design for an aging America customer base

In both cases, the customer needed a home that is on just one level. A recent study showed that 99% of American homes are not suitable for elderly residents. Manufactured homes are, by definition, only on one level and this is a sudden byproduct that nobody had considered before. With the Baby Boomers the largest segment of the U.S. population, and the oldest Boomers now entering their 70s, this is a trend that will fuel greater manufactured home sales in the years ahead.

Low lot rent increases that matched social security bumps and are far less than apartments

Both examples included manufactured home lot rents that had increased over a decade or longer. In the case of Carla, it had gone up $280 per month over a ten year period. In the case of Bob, the rent had gone up $248 per month over a 13 year period. In both cases, that equates to an increase of only 3% per year, which is in-line with inflation and very mild. By comparison, apartment rents have gone up nearly 10% per year during the same period, and college tuition has gone up more than 10% per year. Even tickets to Disneyworld – which is where the PBS reporters apparently got their economic training – have gone up 5% per year for the past decade. It's also important to note that apartment rents in Chantilly, Virginia and Winchester, Virginia are nearly twice as much as their lot rents.

The truth about manufactured home values, and not just a couple extreme cases

One point of the story was that both Carla and Bob's home had depreciated. Of course they have. Both were purchased new and that comes with a premium – all assets cost more new and then lose their value massively the day they leave the dealer's lot. Neither Carla nor Bob are in any way the norm, but simply the most extreme end of the market. Carla paid $113,000 for her manufactured home, and Bob paid $90,000. In the majority of our communities – and throughout most of the U.S. – the average manufactured home costs between $5,000 and $30,000.

The reality of credit and interest rates – and why manufactured home loans are a bargain

During the segment, the interest rate on manufactured home loans is criticized. It is noted that manufactured home loans are 3 points higher than stick-built mortgages. But the reporters admit that the customer base of manufactured homes have very poor credit and that the chattel collateral depreciates. So it's pretty amazing that any lender will make a loan on a manufactured home at all, much less for only 3 points more than a mortgage with a good-credit customer and real property as collateral. Have the reporters ever heard of credit card rates, or pay-day loans? Same customers. Same basic collateral. Rates of 20%+ in most cases. What's to complain about? These manufactured lenders should receive awards and not criticism.

The truth about consumer choice and personal accountability

Throughout the segment, the tone was that both Carla and Bob were somehow deceived and at the mercy of the manufactured home industry. That's as crazy an argument as the buyer of a Mercedes complaining that the German manufacturer had somehow seduced them into signing the contract and taking the keys. Carla and Bob are adults – in fact, middle aged when they made their purchase. They elected to pay the prices they paid. They knew that brand new items carry a premium which is lost when the item is no longer brand new. They knew the exact lot rent in the community they put their home into, and that prices of everything in the U.S. rise with inflation. To claim that they are not personally accountable for their decisions and actions is insulting to the intelligence of the viewer. The new American posture that all consumers are victims and have no control over their personal choices has become a common theme since the start of the Obama era, and is still widely promoted by liberals as the reason that we need to move to more of a Bernie Sanders' socialist agenda.

The real scandal that the PBS is afraid to talk about

Equally damaging for the liberals who support and manage PBS is the 800 pound gorilla of real estate lies: that the American taxpayer is supporting the apartment industry. There are 20 million Americans who live in manufactured homes. But there are more than 20 million Americans living in Section 8 apartments. These rents are subsidized –sometimes nearly 100% -- by the American government and therefore the U.S. taxpayer. These rents have risen dramatically, yet PBS never writes a single story on this fact. If you look at the amount of taxpayer subsidy of apartment owners, it would be a bigger scandal than Bernie Madoff. To run a story about manufactured homes being opportunistic – and not include apartments in the story – is disingenuous. Apartment rents in the U.S. average over $1,300 per month, while manufactured home community lot rents average around $275 per month. Given that fact, who is taking advantage of the American consumer?

Who was actually behind this story?

This story was similar to one written in the Seattle Times, blasting Warren Buffet for "taking advantage of the American consumer" since he is the largest owner of manufactured home construction and financing in the U.S. That story was a joint venture of the Center for Public Integrity and the Seattle newspaper. What most people don't know is that CPI is basically a "journalist for hire", taking large contributions in exchange for writing positive or negative articles on the contributor's own suggestion. Here's some information on the CPI scandal http://humanevents.com/2008/01/25/the-center-for-public-integrity-and-a-media-scam/. Could it be that the same benefactor of CPI is also contributing to the ever cash-strapped PBS, and wanted to continue with the Buffet witch hunt? It's interesting to note that no American newspaper picked up and reprinted the Seattle story – apparently the story was so poorly thought out that no legitimate news agency would run it without getting paid. So much for public integrity.


Manufactured homes are the last hope of the American Dream of homeownership for millions of Americans. They offer privacy, a yard, the ability to park by your front door, and a sense of community. They are preferred by millions of Americans to the inferior lifestyle of apartments. They offer a tremendous value for the dollar, in which households can live in nice areas for a fraction of the cost of stick-built homes. For every Carla and Bob, there are thousands who love their choice and lifestyle. PBS should be ashamed of themselves for running this poor excuse for journalism, and for denigrating an industry that offers the only non-subsidized affordable housing in the U.S.

SOURCE Frank Rolfe

What an injustice to air such a one-sided viewpoint from PBS, to make viewers think the industry is taking advantage of folks (which is the furthest thing from the truth). My parents are an example of a couple who outright own a $200k+ valued 4-level split, but cannot find a ranch at a decent price that isn't trashed. They were looking at a 55+ park where a brand new doublewide w/over 1500sqft was closer to $100k and mom loved it! Not saying its for everybody, but the retirees needing no "steps" find these homes a great option and a great SAVINGS! Thank you for sharing Ken.


The author precisely described large, long term problematic issues in the country as well as simple, realistic and economically accurate solutions. How refreshing.


continuation - part two

At some point in the interview, I became aware the reporter was quoting information to me that seemed curious because I could not see how a reporter could have accessed some of the information. When I pressed him on this, he conceded that he had read a white paper I had written.

From my perspective, the white paper he referred to was one of extremely limited and restricted circulation, and certainly copyrighted by me. The only place that paper had been circulated at all beyond Rishel Consulting Group's client base and to certain state MH trade association executives and certain MHI staffers, was at a George Allen Annual Roundtable in Georgia for community owners. (These three day events are held every year in September at different locations each year and normally attended by over 300 community owners.) These were distributed only at the opening meeting by my staff prior to my speaking and not left where they could just be picked up and recipients were cautioned these were not for distribution to others without written permission and were so marked on each page.

The only misdistribution I was aware of was to Paul Bradley from ROC who had apparently registered for the Roundtable as a community owner. Since ROC was in fact part of the subject of the white paper, Bradley was noticeably angry and when the opportunity for Questions and Answers arose, he attempted to dominate the rest of the time period to discuss the white paper. Given that some of the (well-researched) statements could have resulting in lawsuits against me if untrue, it was a heated discussion. (No lawsuit has ever even been threatened because of the research documented in the white paper made it clear that the information was factual.)

It occurred to me that ROC, or someone tied to them had to be the source that had supplied this white paper to the reporter. (Point of Information: Paul Bradley when asked  later directly denied supplying the white paper to them.) At that point, I became very suspicious and soon ended the interview by hanging up on the reporter.

As Frank Rolfe correctly pointed out in his piece, there are a number of people and entities at work trying to cripple one aspect of our industry using a liberal agenda as a cover. While each entity and person has their own payoff reasons for their role, the overriding role is to cripple chattel finance so as to destroy the private ownership of manufactured housing land lease communities. The ultimate big money beneficiary would be upper level employees and members of the Board of Directors of ROC, as the four and five star communities were forced to sell through a process normally controlled by ROC in which ROC and their upper level people would reap huge bonanzas.

A few of us in the industry are aware of this and are working to quash their effort, but there are many others in the industry still asleep or being bought off to ignore or even promote this effort. I'm taking the time to write this so that readers here are at least aware to some extent of what is going on, because not all who read here are subscribed to the Chattel Finance Newsletter nor should they be because they have no interest in the finance of the people who buy and reside in HUD Code homes.

A final note on Frank Rolfe and Dave Reynolds. These guys take some heat sometimes because of their Boot Camps and even Frank's big adventure of being interviewed by the Wall Street Journal. What the entire industry should know is these guys are the real thing. In my estimation they are one of the fastest growing community group in the country. While I don't always agree with parts of their philosophy, their Boot Camps are the premier source of detailed information on what one needs to know when it comes to purchasing 1-3 star smaller communities. They deserve our respect.

Originally posted by @Account Closed :

I thought this be relevant to post here: 


This could go along with the theory of a larger movement to cripple and put pressure on mobile home lending. 

 The question the entire manufactured housing industry needs to be asking itself is:

Is the reason for all the push because, in fact, are we taking advantage of people as alleged, or is it because someone or some group stands to find advantage in making those allegations?

As someone who has been lending to consumers who want to purchase, or refinance, since 1975, and who now provides strategies, advice, and services for those who want to start, or fix a lending operation, I believe that what many lenders do and offer is fair.

There is no question that what we do starts as disadvantaged. Our cost of funds to use for lending is much higher - hence the higher rates we must charge. Our target customers are poorer and less educated which increases the likelihood of repossession and loss through borrower neglect or anger driven damage. This also results in higher interest rates and make the need for chattel transactions with the faster and easier reclaiming of collateral imperative to any success.

Is this taking advantage of the consumer? I think not. Quite the contrary, we offer a segment of the populace a chance for homeownership which can benefit both them and their families. People living in a manufactured home they own experience lower divorce rates and their children get better grades in school and are more likely to successfully complete some form of higher education than those living in the same or similar neighborhoods who rent. (Rishel Consulting Group is subsidizing an academic white paper on this subject that will be available in mid-May, 2016.)

So. As business people either somewhat or fully engaged in manufactured housing, what do you think?

How about a letter writing campaign? Here is my letter:

Date of Letter

The Honorable Rodney Davis

United States House of Representatives

1740 Longworth House Office Building

Washington, DC 20515

Dear Mr. Davis:

Recently several members of the House Financial Services Committee called for an investigation into Clayton Homes and more specifically, their lending practices relating to the chattel financing of manufactured homes. I am writing you because I believe this action is both unwarranted and misguided, and potentially very damaging to the manufactured housing industry, its employees, and the consumers it serves.

Specific to Illinois, over 14,000 Illinois residents derive all or part of their living from the manufactured housing industry. Over 50,000 Illinois residents live in and own manufactured homes and depend on the affordable solutions to homeownership that manufactured housing provides. All of these people would be harmed if these unwarranted attacks are allowed to reach the desired goals of a limited group of organizations and individuals that stand to profit by the elimination of chattel financing as a means of lending on manufactured homes.

Part of the basis for justification for these attacks are a series of articles published by the Seattle Times, an on-line publication tied to other entities known for their willingness to engage in journalism for hire for ultra liberal entities. In at least two of those articles, I was quoted (as an industry expert on chattel finance) as the source of certain figures. The truth was, I never supplied those figures and only after several stern notes to the publication did they cease utilizing my name and reputation to their advantage. As the expert on chattel finance of manufactured homes they claimed I was, I can tell you that all of the articles they have written lambasting Clayton Homes and Warren Buffett are full of inaccuracies, mistruths, and selective and manipulating data.

I am asking you, as my representative in Congress, to do whatever you can to stop this unwarranted effort and to educate your fellow members in the House of Representatives as to the truth of this matter. Please feel free to email or call me for any assistance or information I can supply you to help in this effort. Thank you for your time and consideration in this matter.

Respectfully submitted,

Kenneth Rishel

Rishel Consulting Group