The number of homeowners still in forbearance plans has been declining as foreclosure moratoriums expire. HousingWire recently spoke with Joe Davila, president and CEO of Selene Finance, about how servicers can best help homeowners with next steps as they exit forbearance plans.
HousingWire: More than one million borrowers are exiting forbearance plans. How can servicers prepare to help them with next steps?
Joe Davila: Communication, borrower education and training of consumer-facing staff are all critical elements to ensure your servicing operation is properly prepared to help borrowers as they exit forbearance plans.
Embedding the loss mitigation rules into process workflow is needed to ensure consistency and proper flow of information and decisioning. The call center and loss mitigation teams must be properly trained on the options that are available to the borrower to properly guide the discussion.
In certain cases, with the proper technology, the borrower can self-service through a portal to select their exit plan with limited or no documentation requirements.
HW: What do servicers need to know about expiring foreclosure moratoriums?
JD: Servicers have foreclosures in process that are either stopped in a certain stage or progressing to the next stage that require appropriate reporting, tracking and documentation.
Once the moratoriums are lifted, the need to monitor state-by-state rules or potentially county-by-county in an automated fashion will be tricky and require technology enhancements and comprehensive training of the staff.
There are still many unknowns so the servicer will have to remain flexible and start to think about staffing the foreclosure teams because most of the foreclosure teams were reassigned due to moratoriums.
HW: How can servicers best help homeowners as those moratoriums lift?
JD: Servicers will utilize a structured waterfall to determine the optimal outcome for the borrower. These rules will assess the borrower’s ability to pay, property value and employment status.
The goal is always to keep the borrower in the home whenever possible. The servicer will provide outreach to borrowers in foreclosure as well and handle inbound calls where alternatives to foreclosure will be discussed.
HW: What will servicing look like in 2022, and how can servicers best prepare for what comes next?
JD: In 2022, the focus will be on the new CFPB and regulatory environment along with post-moratorium management of the borrowers and the foreclosure process. Compliance with regulatory changes will require technology adjustments, training and advanced reporting to identify real-time risk.
If post-moratorium foreclosure guidelines are set at the state or even county levels, the need to embed the new rules will also be a challenge to manage.
In addition to all of this will be managing the COVID-19 situation if the virus continues to impact day-to-day life. Hiring and retaining a work from home staff versus a hybrid model of in and out of the office will continue to be a challenge even though we have seen very good performance to date.
Chesney Cross, and her husband, Ken, began hunting for a new home in the Knoxville, Tennessee-area just as the pandemic began upending the housing market.
“Everything was selling super quickly and above what we wanted to spend,” says Chesney, 33. “We couldn’t find anything that wasn’t a giant fixer-upper.”
The couple had been living in a 1,100-square-foot home for a decade. But when their first child, Cash, arrived in November 2019, it began to feel cramped.
As frustrating as the house-hunting process had become, Cross would still spend hours scouring Instagram for her dream home: #Farmhousestyle.
That’s when she came across a picture of a house with the rustic, farmhouse-chic aesthetic she pined for.
The “Southern Charm” model by Clayton Homes.
The price was right, but it turned out to be a manufactured home, an offspring of the mobile home.
“I mentioned it to my husband, and of course, he had that mindset of like, ‘It’s a trailer, you know,’” she says, alluding to a common perception of the old, cheaply built mobile homes. “I was like, ‘No, you have to see these photos. It looks beautiful.’”
No matter, the family moved in last year, three months after signing a contract.
Chesney Cross, with her son Cash, outside their new manufactured home in Sevierville, Tennessee.
Priced out of the housing market
As an overheated housing market – marked by double-digit price increases, bidding wars and inventory shortages – puts the dream of homeownership out of reach of many ordinary Americans, manufactured homes are growing in popularity because their cost is roughly half that of homes built on a permanent site.
Unlike a traditional site-built house, which is constructed at its final location using multiple teams of subcontractors, a manufactured home is built in an indoor facility and delivered to its location. That lowers costs by improving the efficiency in the home-building process: All the teams needed to build the manufactured home are in the facility, dramatically reducing labor costs.
More than 43,000 land-lease/mobile park communities exist in the U.S., with an estimated 4.3 million home sites, according to the Manufactured Housing Institute, a national trade organization. And nearly 22 million people live in manufactured homes.
Or Michaelo, founder of Orbit Homes, which makes manufactured homes in California, says the simplicity of completing a house in the factory is what drew him to the business.
A manufactured home by Orbit Homes
“It’s cutting the time of construction, the hassle of dealing with all the trades – and the cost is tremendously lower,” he says.
Cheaper cost of manufactured homes
The price per square foot for a manufactured home in 2021 was about $57, compared with $119 for a home built in a neighborhood (excluding land), according to the MHI.
For the first time in 15 years, manufactured homes are on track to deliver more than 100,000 units this year, a 23% increase over 2016, according to the organization.
Today, manufactured homes refer to homes built on or after June 15, 1976, with construction standards regulated by the Department of Housing and Urban Development. The term “mobile” or “trailer” homes are typically used to describe bare-bones manufactured homes built before 1976.
A neighborhood in Knoxville, TN where site-built, manufactured homes were placed and built by a developer.
The quality and durability of manufactured homes have improved in recent decades to conform to federal and state construction requirements. This has made manufactured homes an affordable and attractive form of housing for many, on either individual lots or in parks, say industry experts.
“There’s a lot of demand for our homes right now,” says MHI CEO Lesli Gooch. “And that’s because people are looking for that extra space. They’re looking to own their own four walls, have outdoor space, enough space for a home office. Today’s manufactured homes are built to a federal building code, are structurally secure and resilient, energy-efficient and include a range of modern features that today’s consumers want.”
Mobile home values rise
Not just that, over a five-year period ending in 2019, the median value of manufactured mobile homes rose at a faster clip in 27 states than the median value of single-family homes, a new study from LendingTree shows.
Chesney Cross moved into this new manufactured home in Sevierville, Tennessee, last year.
That value increased by nearly 40% on average from 2014 to 2019 (the latest census data available), while the median value of single-family homes over that same period increased by 33%, the report says.
As a result, the nationwide median value of a mobile home (as in a moveable dwelling both pre-and post-1976) in 2019 was $53,300. While that is still nearly $190,000 less than the median value of a single-family home, the value of mobile homes has been climbing quickly, according to Lending Tree.
A manufactured home by Orbit Homes
That is not surprising, says Glen Esterson, a broker for mobile park communities and a former mobile park owner, who has seen skyrocketing interest from investors further accelerate during the pandemic.
“In 2020, my team sold 40 mobile park communities. In 2021, we sold 77,” he says. “We’re the most affordable solution for low-income housing.”
Solving the affordable housing crisis requires many pieces, including increasing housing supply through new home construction, addressing zoning regulations that constrain the provision of higher-density and affordable housing. But manufactured housing is an important component, says Gay Cororaton, senior economist and director of housing and commercial research for the National Association of Realtors.
A manufactured home between 1,000- 2,200 square feet costs $138,000, on average, roughly 40% of the median sales price of an existing home at $362,600 and one-third of the cost of a new single-family house, at $416,900, she says.
Home financing remains a challenge
A major challenge for purchasing a manufactured home is financing and the regulation that the manufactured home sits on land that the homeowner also owns, Cororaton says. For owners of manufactured homes who do not possess the land, mortgage rates tend to be higher as they are considered a riskier investment.
Those drawbacks – along with trailer park or land access fees – may discourage some buyers.
The average sale price of a manufactured house as of August stood at $112,000, while the average sales price of a new site-built house with land totaled $481,700. For homeowners who don’t own the land, the average monthly rent for manufactured homes in the U.S. was $568.
Manufactured homes are the most expensive in Washington, Oregon, and California, mirroring traditional housing market conditions in those states. Washington is the only state where the median value of a mobile home is higher than $100,000. Oregon and California trail, with median values at $93,500 and $91,400, respectively.
Meanwhile, mobile homes are the least expensive in Nebraska, Iowa, and Ohio. All three states have a median value of less than $25,000.
Jacob Channel, an economist with LendingTree, says his company’s report shows that mobile homes can be a good investment.
‘Trailer park stigma’
“People are afraid to buy mobile homes for a variety of reasons. And one of them is that they’re afraid that they won’t see any return on investment,” he says, adding that he believes the report dispels that idea. “If you’re thinking about buying a mobile home, as long as you buy it in a decent location, in a decent trailer park, for example, and you buy a home that’s in a good quality condition, then you can expect to see a return on your investment.”
A kitchen in a manufactured home by Orbit Homes
That was the case with Mark Robinson, 48, who was born and raised in the Paradise Cove mobile park community in Malibu, California.
In 2001, he bought his first mobile home for $65,000 in the Seminole Springs Mobile Home Park in Agoura Hills, just outside Malibu. After joining the Los Angeles County Fire Department as a firefighter, Robinson says he quickly paid off the home. He had a $356 association fee that covered water, sewer, and trash.
Mark Robinson with his wife Veronica and daughter Brooke
“I loved the trailer park stigma I got from my co-workers as I watched them struggle to make payments on their stick-built, overpriced homes,” he says, referring to their traditional homes that were built on-site.
In 2007, he sold his trailer for $285,000 and pursued his own site-built dream house.
A few years in, Robinson says he missed the beach life and decided to move back into a mobile home on the beach.
“We were only 15 minutes away, but there’s a difference about being able to wake up and, you know, have a cup of coffee and sit on your deck and be checking the surf at Zuma Beach,” he says.
In 2014, he bought a manufactured home in the Point Dume Club community for $375,000 with the land rights.
Solar roof, fully wired
In three years, the property had more than doubled in value, and he was able to sell it for $810,000. This time, he bought another home in the same park for $850,000 with ocean views, plus a $1,630 monthly space rent.
“We are getting a $20 million view for $850,000,” Robinson says.
Mark Robinson’s current manufactured home in Malibu’s Point Dume Club community
He is in the process of upgrading to a new manufactured home, which is estimated to cost around $500,000.
From Robinson’s perspective, it’s also a great investment, with a solar-paneled roof and a fully-wired house.
“Our forever trailer park home should appraise over $2 million once we put our new home,’ Robinson says.
After Chesney Cross picked out the “Southern Charm” model from Clayton Homes, the largest builder of manufactured homes in the U.S., she added some upgrades, including a pitched roof.
Cash, 3, stands in front of a standalone tub in his new home.
The total cost reached about $180,000. A 2-acre parcel in the area they were considering would have cost them $70,000, bringing their total to $250,000, well within the range of their initial budget. The couple instead decided to locate the home on their family property in Sevierville, Tennessee, to save on the price of the land
A site-built house would have cost them $350,000, she says.
Chesney Cross, her husband, Ken and their child Cash in their new kitchen.
Cross, who lost her job in marketing during the pandemic, says she’s glad they didn’t take on a huge loan for a traditional home.
“We definitely have the space that we needed and have all of the modern touches we wanted,” Cross says. “And of course, the price point was far better than what we were seeing in the market.”
Swapna Venugopal Ramaswamy is the housing and economy reporter for USA TODAY. Follow her on Twitter @SwapnaVenugopal
The judges from the Tampa Division and local attorneys from the Tampa Bay Bankruptcy Bar Association made a presentation to University of Tampa freshmen about the true cost of credit cards on Feb. 20 and 21, 2008. The presentation is part of the Credit Abuse Resistance Education program, also known as C.A.R.E. It demonstrates the way consumer credit works and the actual cost of credit card purchases if balances are not paid in full each month. The project is partially funded by a grant from The Florida Bar Foundation.
35th Annual Economic Forecast Breakfast 2022 Presented by Allen & Company of Florida, LLC
Allen & Company of Florida, LLC, and the Lakeland Chamber of Commerce present the Economic Forecast Breakfast 2022, for the 35th year, on Thursday, January 13, 2022, from 7 to 9 a.m., at the RP Funding Center. This year, more than ever, expert insights into the local and national economy are critical when considering future planning and budgeting. Yes, it was the strangest year ever. We locked-down the economy for a pandemic, spent trillions of dollars to overcome the economic crisis that followed, and printed trillions of dollars of new money to help pay for it. In the meantime, even though many small businesses did not survive, US stock markets moved to new highs. With vaccines being distributed and COVID data getting better, the world is heading back to “normal.” But will it be a “new normal”? Brian Wesbury, will discuss this and more.
“The Economic Forecast Breakfast is one of our signature events,” said Chuck McDanal, Interim President & CEO of the Lakeland Chamber. “Bringing this level of insight, guidance, and wisdom to our business community is core to the Chamber’s mission, and Allen & Company is not only the presenting sponsor, but it is the reason, year after year, that this event is such a wild success.”
Nationally recognized Chief Economist Brian Wesbury of First Trust Advisors, L.P., returns as our guest speaker for the 35th Annual Economic Forecast Breakfast 2022 sponsored by Allen & Company. You can plan on hearing a perspective that is steadfastly germane to the economies and politics of the world we live in delivered in a dynamic and unwavering style.
“It was 35 years ago that a small group of interested people met to hear about how the national economy played a part in our local market. It’s hard to believe that small idea became an event with almost 1,000 people attending”, comments Michael Walker, Vice President of Regional Operations at Allen & Co. “The Economic Forecast Breakfast has provided us the opportunity to attract several of the most talented economists in the country, but very few surpass the intellect and energy of Brian Wesbury. “ He further notes, “no two forecasts have ever been the same, and this year promises to be one to remember.”
Another special video will premiere at this years event. “Year after year we’ve had the pleasure of partnering with Allen & Co. to capture the stories of the incredible work being done in the great state of Florida. We’ve heard from some of the greatest leaders and innovators from our communities. We are excited about this years video as it shares the resilient and hopeful stories of Floridians. We’ve learned that big things are happening and this is the place to do busineess!” Andy McEntire, Founder/Directore Indie-Atlantic.
At annual Lakeland forecast breakfast, economist predicts 4% growth for U.S. economy in 2022
LAKELAND – In 2022, companies can expect a 10% to 15% rise in profits as the U.S. economy grows another 4% this year, economist Brian Wesbury predicted on Thursday during his annual forecast in Lakeland.
In his 27 years of forecasting for the Lakeland Chamber of Commerce, this year will be different because the economy is in unprecedented territory, mostly because of several moves made early in the pandemic in Washington, D.C., he told a crowd of several hundred people at the RP Funding Center.
“Unprecedented means never have we done these things, never have we locked down the economy, never have we borrowed $5 trillion from our kids and great-grandkids and grandkids, never had we printed $4 trillion in such a short period of time,” Wesbury said.
He called the recession during March and April 2020 – a time period that coincides with COVID-19 lockdowns – the shortest economic downturn in history, citing data from the Massachusetts-based National Bureau of Economic Research.
He said presidents both Democrat or Republican may take credit for economic recoveries, but this is not true.
“When (President) Joe Biden stands up and says I have presided over the greatest job growth in a recovery in American history, I want to laugh because he had nothing to do with it,” Wesbury said.
“This was a lockdown and a reopening,” he said of the two-month recession and resulting economic recovery in 2021, adding: “There is nothing normal about this business cycle,” between displaying charts and adding to them with a red marker.
Wesbury’s visit came just one day after Biden’s Economic Council director, Brian Deese, announced on Wednesday at a White House press conference, “in 2021, our economy experienced the largest single drop in the unemployment rate on record in the history of the country, down to 3.9%; the most jobs created in any year on record at 6.4 million; the strongest economic growth of any year in nearly four decades.”
Deese added that prices for gas and food also lowered in November and December, that inflation is occurring worldwide and that the U.S. is poised to overcome these headwinds because of the record-pace of the recovery.
Regarding inflation, Wesbury explained the Federal Reserve’s monetary policy was to blame, not government spending, as many like to say.
What keeps him up at night is the potential for another lockdown, he said. He added, his predictions for 2022 rely on another lockdown not happening.
Displaying another chart, Wesbury claimed effectively all Americans have either been vaccinated, tested positive for the virus or had it but didn’t know it.
“It is so prevalent, it is everywhere,” he said, regarding COVID. “The bottom line is: it’s over.”
Wesbury did not want to predict how 2023 would be because of the unprecedented economic times for the country. Still he said, “2022 is going to be another reasonably good year,” and then predicted an economic growth rate of 4%. He also anticipated 3.5 million jobs would be created this year and a 10% to 15% rise in profits for American companies.
While he did not blame government spending on inflation, Wesbury cautioned against “progressives” that wanted Biden’s Build Back Better program to gain passage in Congress. He countered the proposal saying, in 1930 government non-defense spending represented 2.5% of of the Gross Domestic Product and today it represents 27% of GDP.
“In mathematical terms, what that means is over the past 90 years government has grown 10 times faster than the economy as a whole,” he said.
“They have taken more and more and more,” he said of U.S. governments since President Franklin D. Roosevelt, who led the country out of the Great Depression during his term from 1933 until his death in 1945 with New Deal programs.
He called out former Presidents Johnson, Nixon, Ford and Carter as the “four horsemen of the apocalypse” for their approval of additional government-funded entitlement programs and other non-military spending.
If it passes, the Build Back Better program would provide the country’s poor, disabled, elderly and working and middle classes with assistance for education such as free preschool as well as child care with government funding and tax cuts.
The Build Back Better program would also address climate change with rebates and tax credits to assist families switching to renewable energy for their housing and transportation needs as well as creating jobs in renewable energy industries. Expansion in affordable health care would also be a part of the package.
The president has proposed higher taxes on corporations and the wealthiest Americans to help pay for the plan, while assuring that no one earning less than $400,000 will pay more in taxes.
Wesbury drew a comparison between the government spending in the 1930s and ’40s –when the government was fighting a Great Depression and then a world war – and today. He said that in a recent visit to the mountains, he observed young people kayaking in “stimi-boats” – or boats they bought with government stimulus checks – and smoking marijuana along the Colorado River.
“I have never seen anything like it,” he remarked, gaining laughter from the crowd.
Both periods of high levels of government spending resulted in similarly short-term boosts to the economy, he explained. Boat sales skyrocketed during the pandemic but will not do as well in years to come, he noted.
He admitted he would probably never serve on the Federal Reserve because he would put a stop to the printing of cash by the Treasury “cold turkey” rather than the potential tapering of the pandemic recover program by the Fed as the central bank has signaled it will do in 2022.
The Fed wants to address climbing inflation, now at levels unseen for a generation, more aggressively with a series of interest rate hikes and ending its asset-buying program earlier than expected in 2022, according to a Dec. 15 Forbes magazine report.
Wesbury is the chief economist for the investment advisory firm First Trust Advisors L.P. He is a Northwestern University graduate and previously worked for Republican Connie Mack III, who served as a member of the U.S. House of Representatives from Florida from 1983 to 1989 and then as a senator from 1989 to 2001.
The chamber’s Economic Forecast 2022 breakfast was the 35th year the event has been held. The 90-year-old Lakeland-based investment firm, Allen & Company of Florida, LLC, sponsored the event.
Excessive delays in processing tax returns and tax refunds ranks as the No. 1 most serious problem facing taxpayers, according to National Taxpayer Advocate Erin Collins’ annual report to Congress released today. It was tough last year, and it looks like it’s going to be tough this year, too.
The Internal Revenue Service announced this week that the 2022 tax season filing start date—when you file your 2021 tax return—is Monday, January 24. Meanwhile, millions of people are still waiting for their 2020 tax year tax refunds. And the taxpayer advocate is warning of refund delays this tax season.
“I am deeply concerned about the upcoming filing season. Paper is the IRS’ Kryptonite, and the agency is still buried in it,” said Collins. How bad was it last year? Taxpayers faced long processing and refund delays, difficulty reaching the IRS by phone, correspondence that went unprocessed for many months, collection notices issued while taxpayer correspondence was awaiting processing, limited or no information on the Where’s My Refund? tool for delayed returns and difficulty obtaining timely assistance from the Taxpayer Advocate Service, an independent organization within the IRS that Collins heads up. Last year, TAS got more than 66,000 congressional referrals, six times the pre-pandemic level of inquiries.
Millions of e-filed returns were held up as the IRS issued math error notices because of discrepancies related to 2020 tax year stimulus payments. The most common error (11 million returns) was around Recovery Rebate Credit claims by taxpayers who didn’t get stimulus payments. The mismatch triggers a math error notice; a taxpayer’s response go into the paper pile; and any refund is further delayed. Paper returns were taking up to eight months to process, and there were cases where amended returns took more than a year to process.
Millions of discrepancies—and math error notices—remain likely this year, too, Collins warns, as taxpayers have to reconcile the third stimulus payment paid out in 2021 as well as any 2021 monthly advanced child tax credit payments on their 2021 tax returns. The child tax credit payments apply to almost everyone with kids—36 million taxpayers. To avoid tax refund delays, make sure you have IRS letters 6419 and 6475 on hand before you file. File electronically and choose direct deposit.
How bad is the backlog going into this filing season? The latest Covid operations statistics, as of January 7, show that the IRS still had 6 million unprocessed 2020 individual tax year returns as of December 23, 2021. In addition, as of January 1, there were 2.3 million unprocessed amended individual tax returns, and as of January 5, there were 2 million unprocessed employers’ quarterly tax returns (Forms 941 and 941-X).
The IRS backlog includes about 5 million pieces of taxpayer correspondence—with some of these submissions dating back at least to April and many taxpayers still waiting for their refunds nine months later, according to the Taxpayer Advocate report.
IRS filing statistics as of December 3, 2021, showed 168 million individual income tax returns processed. Of those, 77% were issued refunds. Average refunds came in at $2,815.
Tax refund delays cause real problems for people, with a disproportionate impact on low-income taxpayers. “The financial impact can range from mild inconvenience to severe financial hardship,” Collins says.
Collins says that the IRS “deserves credit for playing the hand that it was dealt.” Congress has charged the IRS with administering Covid relief—stimulus payments, advanced child tax credits and the $10,200 unemployment benefits tax exclusion. And the number of taxpayers the IRS serves has been going up while the IRS workforce numbers and budget have been going down. Since FY 2010, the IRS’ workforce has shrunk by 17%, while its workload—as measured by the number of individual return filings—has increased by 19%.
How can Congress help? The Taxpayer Advocate calls for Congress to beef up its funding to the IRS so it can improve the taxpayer experience and modernize its IT systems.
