Predatory Lenders Hate Regulation

Well, duh, right? I’m about to tell you just how much they hate regulation.

The janitress where I work is a great lady who likes to fatten me up with her tamales, posole, and Mexican sweet bread. Her English is limited but is way better than my Spanish. And she’s taking ESL classes, which I think is really awesome.

Anyway, yesterday, she showed me a packet she got in the mail from 21st Mortgage Corporation, her mortgage company. She asked me about it. Oh man. After reading it? Head. Spinning. Anger.

From the 21st Mortgage Corporation:

Will you wish to sell or trade-in your home in the future?

The Dodd-Frank Act could take that freedom away from you.

The Dodd-Frank Act is a broad, complex federal statute that was passed by Congress and signed into law by President Obama on July 21, 2010. It is the most comprehensive financial reform law that has been passed since the 1930’s. The purpose of the Dodd-Frank Act is to enhance the ability of the federal government to identify risks in the nation’s financial sector by increasing regulatory oversight.

As with any federal law this large and extensive, there will be unintended consequences
that need to be addressed. Unfortunately, manufactured home owners and prospective buyers will be especially harmed by this law as it is currently written.

How the Dodd-Frank Act could affect you:

  • Severely limits financing for low to moderate credit score buyers and for homes
    valued under $50,000. The buying or selling of new and used manufactured homes
    will become very difficult.
  • Lack of financing will limit new home sales, thus slashing American jobs that are currently dedicated to building high quality manufactured homes.
  • New restrictions could be placed on manufactured home loans that will make them much more expensive for potential home owners.

The Dodd-Frank Act must be amended so that these consequences do not become a reality.

This cover letter was followed by three prewritten letters with her name and address on them to be sent to Senators Boxer and Feinstein and her Representative. They also added three prepaid envelopes addressed to them. Here’s the letter:

Her Name
Her Address

Dear Senator Boxer,

I am a manufactured home owner writing to respectfully request your support in making needed changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203). Without changes to this act, it will have a negative effect on me, other manufactured home owners; as well as people who may wish to purchase a manufactured home in the future. I feel that fellow manufactured housing owners and buyers will be unfairly punished for making the responsible decision of choosing a low-cost affordable housing option that fits our budget.

As the law is currently written, and the Federal Reserve Board is proposing implementation regulations, selling or trading in my home will be extremely difficult because lending alternatives that are not dependent upon government subsidies are being taken off the table and will not be available to prospective purchasers of low priced manufactured homes. I am one of approximately 19 million current owners of manufactured housing and we dont like the government taking away our financing alternatives.

I propose an amendment to the Act that will exclude manufactured housing, thus halting any undue hardship on myself that it will cause in its current form. Jason Boehlert, (Vice President of Government Affairs with the Manufactured Housing Institute 703.558.0660 jBoehlert@mfghome.org) is leading the effort to properly amend this legislation and can assist you with any information you need to investigate and address these issues.

Thank you for your time.

Sincerely,

Her Name

Unbelievable. They encouraged her to voice her opinion with prewritten letters? Um, more like their opinion. She asked me if she is supposed to send the letters. I told her no. I added that if she believed them, she could if she wanted to. I also said that sending these letters helps them.

Asking if sending the letters was mandatory is what I feared. How would other owners react? Would they send it because their mortgage company requested it and provided everything they needed to do so? They can be pretty intimidating, considering they hold the deed to your house.

This is the kind of crap that reinforces my belief in the importance of regulation. Why shouldn’t companies like 21st Mortgage Corporation be held accountable too? Are they worried that they can’t sell people houses they can’t afford? That they actually have to explain that the cheap monthly payment is just the interest? And after a few years, the principal will be added making the payment much, much more? Protecting the consumer against these predatory lenders should be a priority.

The Manufactured Home Owners Association of America agrees. They know that the Dodd-Frank Act is a good thing. Selling homes that people can actually afford so they don’t end up foreclosing. What a concept.

I shouldn’t be surprised that companies protecting their shady interests would try tricks like this. I asked her what happened to the letters. She dumped the packet in the shredder…exactly where they belong.


37 responses to “Predatory Lenders Hate Regulation

  • nonnie9999

    know what i would have done? i would have set up a dummy email account and written to them to thank them for the postage paid envelopes they sent to my mother. i’d say that, at mom’s request, i used them to send letters to her senators asking them to make sure that fat-cat asswipes like the president of 21st mortgage are forced to pay their fair share of taxes. then i’d tell them that they’ve got plenty of lobbyists to fight their battles, and they suck ass for asking people who they’ve probably ripped off for many dollars to do their dirty work for them. the nice janitress wouldn’t get any backlash, because it could never be traced to her.

  • lbwoodgate

    We haven’t seen anything like that in Texas. But then Texas isn’t a state like California where their congress people don’t always fall in line with the wishes of their corporate donors. That doesn’t mean they don’t some of the time though I’m sure. 😉

    It’s a campaign where their money is aimed at those states that they don’t already have in their back pockets.

  • lobotero

    Now nonnie has a great idea! These Banksters will use every dime of their money to stop any regulation that would make them accountable….

  • beaglezmom

    Companies like that know that many of the people they loan to are not able to really comprehend that the company is just using them. They’ll send off the letters because they think they are supposed to do it. Its really an act without any sense of conscience. My hope is that the fact its a form letter in a post paid envelope tips the lawmakers into realizing exactly who is sending/behind the letter.

    I have to say — I like Nonnie’s idea a lot.

    • Spinny Liberal

      I really hope so too – the form letter and prepaid envelopes should be a dead giveaway. I like her idea a lot too. It really pisses me off that they’re using unsuspecting homeowners in this way. It really is unconscionable. 😡

  • Terrance H.

    That’s pretty unbelieveable. LOL. I guess I never before realized how blatant companies can be about their greed and rotten practices.

  • afrankangle

    Interestingly, Dodd-Frank regulates what was illegal before Gramm-Briley. Let’s return to Glass-Steagel!

  • Hansi

    The “financial industry” is really getting shitty with people. In stead of just lending money, they’re out their trying to increase business, and therefore the bottom line, at the expense of those they supposedly serve.

  • Latonyk

    The truth is the truth. 21st Mortgage is right on this. Barney Franks has said the bill needs amending, and has said he will work to amend it.

    Lending on MH is higher than conventional lending for a many reasons. Example: It costs the same to process a $35,000 loan as a $250,000 Loan. But there are few dollars profit on those smaller loans.

    Denial or smear tactics don’t help MH owners, only the truth will. Dodd Frank needs amending, period.

    • Spinny Liberal

      The tactics 21st Mortgage used were downright disgusting. Prewritten letters made to look like the MH owners wrote them to be placed in prepaid envelopes to send to their Senators? The fact that they came from the mortgage company will prompt the same question my coworker asked. It’s NOT compulsory. People shouldn’t feel like they should send them because the one they pay every month told them to. If the MH owners have a problem with Dodd Frank, they can voice their opinion. NOT the opinion of 21st Mortgage.

      Thanks for reading and commenting.

  • Latonyk

    Spinny,
    Just as you are sounding off and lining up support for Dodd-Frank, so too the lender can sound off and ask for support to change it.

    The fact that Barney Frank’s is willing to amend his own legislation should be compelling to any thinking person.

    Corporations don’t have exactly the same ‘free speech’ rights that natural person’s do. But a true liberal should be for not against free speech.

    It should not matter who states a fact. The facts support 21st in this matter. If I were a stockholder (I am not, no direct ties), I’d argue that they are absolutely correct in asking their customers to write. It would be irresponsible to not let their customers know what is coming, if they have an opportunity to stop this from negatively impacting millions if manufactured home owners.

    • Spinny Liberal

      The fact that Barney Frank’s is willing to amend his own legislation should be compelling to any thinking person.
      Please don’t be condescending. It’s beyond irritating. He’s willing to amend the legislation. Fine. That’s NOT the point of the post.

      I’d argue that they are absolutely correct in asking their customers to write.
      I am absolutely fine with this. What I’m against is 21st Mortgage writing the letters for them.

      But a true liberal should be for not against free speech.
      Um, how am I against free speech? They can disseminate the information and leave it up to the homeowner to write – NOT write letters for them.

  • Latonyk

    Spinny,
    Don’t look now, but Your ‘ad hominems’ are showing.

    You explain to your readers your point, they (21st) explains to their customers what’s up, and they forewarn their customers who it impacts them.

    Every political group I’ve seen does what 21st did, this is old hat for Dems, Reps, etc.

    They are doing their customers a favor, and if you want condescending, please look at your remarks about them as predatory lenders. Will you Loan your money to these same customers? If so, under what terms?

    Dodd Frank was rushed, poorly crafted legislation, period. The intent sounded noble, but it will hurt millions of MH owners, business people in the field, kill jobs and that us just for starters.

    • Spinny Liberal

      Hmm ad hom. I wasn’t the one who said, “The fact that Barney Frank’s is willing to amend his own legislation should be compelling to any thinking person.”

      I get information from Democrat organizations and NPOs all the time. They encourage me to call my Congressman and Senators. They do not send me prewritten letters to be stuffed in prepaid envelopes to send to them.

      This is the issue I have with 21st Mortgage Corporation, and the point of my post. You seem to believe that they are doing their customers a favor. I don’t agree. Nothing you say will change my mind because I believe that encouraging people to voice their opinions is very different from using them to voice theirs.

  • Latonyk

    Spinny,
    ‘Head. Spinning. Anger.’ and numerous other quotes from your post, starting with predatory lenders.  Those are attacks on the person (corporate), not a logical argument, the very definition of an ad hominem.

    I mean no disrespect, just stating an objective fact.

    By contrast, My statement you referenced is read out context.  As a ‘thinking person’ – that can clearly include you – Barney Frank’s willingness to modify the bill that bears his name points out that 21st is at least arguably correct.

    Now, if they are right -and I believe they are- then they have done a two step process; explain the issue (inform their client(s)) and then offer an immediate action step, including the envelope with postage.  That is reasonable.  

    They are in business, so I am not saying it is ‘a favor,’ they hope to profit.  But you ducked my question.  Would you do it?  Make loans to sometimes high risk customers, so that those very customers can have their shot at part of the American Dream?

    Or do you want the ‘new America’ where rental is the cry for many politicos?  Where ‘the rich’ own those rental housing units?

    My point is you were wrong to attack them on any of the levels you did.  They -21st- and companies like them are rendering an important service.  

    FYI, I get pre-written letters from many groups.  It is my option to use them or not.  It is a free speech issue to explain why someone should consider using such a method, write their own, or pass.

    Thank God for freedom like that in America.  And for our ability to discourse civilly even when we disagree.

    • Spinny Liberal

      Head. Spinning Anger meant my head was spinning because I was angry.

      Now, if they are right -and I believe they are- then they have done a two step process; explain the issue (inform their client(s)) and then offer an immediate action step, including the envelope with postage. That is reasonable.
      I do not believe so at all. I do not believe that they should be writing letters for their customers. I have never received pre-written letters from groups. I think that is terrible, but I’m repeating myself ad nauseum.

      My statement you referenced is read out context. As a ‘thinking person’ – that can clearly include you
      Really? Perhaps you didn’t mean it, but it sounded sarcastic to me.

      They are in business, so I am not saying it is ‘a favor,’ they hope to profit.
      Huh? You said, “They are doing their customers a favor”

      But you ducked my question. Would you do it? Make loans to sometimes high risk customers, so that those very customers can have their shot at part of the American Dream?
      I’m not a lender, nor do I pretend to be. If I were, I’d have to look at certain factors – years on the job, credit (reasons behind bad credit if it’s applicable), etc.

      You may believe I was wrong to attack them, but I believe I have cause. I don’t believe in their tactics. You do. Agree to disagree then.

      Yes thank God. And thank God for you that I can’t reach through the computer to smack you around. 😛

  • Ken Rishel

    Spinny Have you made an in depth assessment of what 21st is indicating is an area their borrower should be concerned about to decide if you agree or disagree? The reality is, for the majority of people that currently own manufactured homes, the implementation of the Dodd-Frank Act without 6 key changes means those homeowners are about to lose most of their value in their homes. If I were in that position, I would want to be aware of that information – even if it did come from my lender. I would also want to voice my outrage to people who had the ability to change that law.

    The problem with any campaign like this is that very few people are truly confident in their ability to compose a reasoned letter on a complex topic like Dodd-Frank so they often do nothing instead, hoping for others to do it. Staff members of politicians often do not understand the point of letters they receive and often misclassify them, which negates the efforts put forth by the person who mailed the letter. Thus, it would seem to make sense for anyone asking someone else to take action to at least offer a letter they could use as written, or as an outline of what they care to say.

    Your post indicates that the person showing you the letter is challenged when it comes to English. Would it be more acceptable if they had asked this person to write their own letter? Even if that were the consensus, the action would have come out the same way – no letter would have been written.

    Frankly, you strike me as more aware of politics than most, and I suspect you are well aware that it is standard practice of organizations of all political stripes to offer form letters to others to send to politicians. You protested you have never seen this done, and if true, you live on a different planet than I do.

    I would guess the real issue is to have something to write about that excites your readers. I would not quarrel with that. My only quarrel is that what you write on this issue may well cost a lot of people their homes.

    • Spinny Liberal

      First, thank you for commenting.

      Have you made an in depth assessment of what 21st is indicating is an area their borrower should be concerned about to decide if you agree or disagree?

      I’ve read some of the issues that people have with Dodd-Frank, but I didn’t make an in depth assessment. I was pissed off at the tactic used. And wrote about it. To make it clear, even if I agreed, I would never agree to the tactic used. IMHO, it’s unethical.

      Would it be more acceptable if they had asked this person to write their own letter? Even if that were the consensus, the action would have come out the same way – no letter would have been written.

      Yes. Inform then leave it up to them. If no letter is sent, then so be it. There is a power disparity. The people that hold your house sends you letters with your name and address on them and prepaid envelopes asking you to “voice your opinion” More than likely, if you don’t really understand it due to a language barrier, etc. you’ll just send it in. That’s the problem I have with it.

      Frankly, you strike me as more aware of politics than most, and I suspect you are well aware that it is standard practice of organizations of all political stripes to offer form letters to others to send to politicians. You protested you have never seen this done, and if true, you live on a different planet than I do.

      This is the type of letter I get. “HR Bill whatever blows. Please call your Congressman and Senators urging them to vote no.” And I’ve never seen form letters with names and addresses on it with prepaid envelopes. And I’m on earth. Where are you?

      I would guess the real issue is to have something to write about that excites your readers. I would not quarrel with that. My only quarrel is that what you write on this issue may well cost a lot of people their homes.

      To be honest, I don’t really care what your quarrel is. It’s my blog. I was pissed off at the tactic and wrote about it. I’m flattered that you think I have that much influence, but I am just a blogger among millions in cyberspace. The people with the power are the lobbyists. Take it up with them.

  • Ken Rishel

    Granting this is your space, your removal of my comments says it all.

  • Politics Room

    You know I usually agree with you, but I actually just finished a blog entry where I talk a little about Dodd-Frank and I must say that I don’t think it’s all that in a bag of chips. The act did little if anything to address the issues that led to the financial meltdown.

    • Spinny Liberal

      Yeah I read your post 🙂 The main point of this post was the tactic used. I had a huge problem with that.

      • Politics Room

        Honestly? All industries do it, even good ones like the one I represent. You have to make it easier for people to participate in whatever it is that you’re pushing. We usually direct people to a website where they can either select prewritten bullets or write their own letter….

      • Spinny Liberal

        I haven’t seen that – pre-written letters with prepaid envelopes. You direct them to a site. You offer an opportunity for them to write their own letter. If they want to use your pre-written bullets, that’s up to them.
        But you don’t go that site yourself, use their name and address to send it on behalf of them. There is also no difference in power. You don’t hold the deed to their house. Someone who doesn’t understand may send it since they told them to.

  • Politics Room

    Very good point. You know with this back and forth I feel like I almost know you even though I just realized you’re a “chick” figured you were a guy for some reason haha.

  • Roseanne

    I wish she had sent it 😦 I am now living the hell of having a manufactured home I can not refinance or potentially sell. I had no idea this legislation was out there and how it would affect me. My manufactured house is on acreage, walk out basement, and is quite lovely. We have been here seven years and have built up equity along with our initial down payment in our property. I wanted to refinance but have now found not a single local bank wanting to give us a loan and neither will the bank holding my current mortgage- USAA. This legislation has made it to where banking institutes are now afraid to touch MHs. I was also told good luck if I ever plan to move, no one will be able to buy it from me and get a loan either. It is very depressing, and I hope the person you wrote of does not have as many issues as I have, or she is going to wish she had gone ahead and sent those letters in!

    • Spinny Liberal

      Right now, it’s hard for anyone to get a loan (even HELOCs), and I’m not sure about the difficulty of refinancing right now. I don’t believe that people will have trouble getting a loan for MHs. Not everyone can afford even wants a site-built house. There will always be a market for manufacture homes.

      Anyway, thank you for reading and commenting. Good luck!

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