Last week, the Senate Banking Committee passed legislation to clarify that a manufactured housing retailer or seller is not considered a "loan originator" simply because they provide a customer with some assistance in the mortgage loan process. This is a key tenet of S. 1751, the Preserving Access to Manufactured Housing Act, which excludes manufactured housing retailers and sellers from the definition of a loan originator so long as they are only receiving compensation for the sale of a home.
The language was passed as a part of S. 2155, the "Economic Growth, Regulatory Relief and Consumer Protection Act," which is a package of reforms intended to improve the national financial regulatory framework and promote economic growth. S. 2155 was passed by the Senate Banking Committee by a bipartisan vote of 16 to 7.
In opening the Committee's consideration of the bill, Senate Banking Committee Chairman Crapo (R-ID) said, "The reforms in this bipartisan bill help tailor the current regulatory landscape, while ensuring safety and soundness and relieving the burden on American businesses that are unfairly being treated like the largest companies in our economy."
MHI worked closely with Senator Joe Donnelly (D-IN), author of the Preserving Access to Manufactured Housing Act (S. 1751) and long-time supporter of manufactured housing, to include this important consumer access provision in the package. The language, included in Section 107 of the package, amends the Truth in Lending Act (TILA) to exclude from the definition of "mortgage originator" an employee of a retailer of manufactured or modular homes who does not receive compensation or gain for taking residential mortgage loan applications while maintaining consumer protections.
U.S. Senator Joe Donnelly said, "For many hard-working Hoosiers and Americans, manufactured housing provides the most affordable option available when they look to buy a home. I'm pleased the bipartisan regulatory relief legislation that I helped craft and that passed the Senate Banking Committee includes a provision based on my Preserving Access to Manufactured Housing Act. This measure would help prevent federal regulations from getting in the way of financing that families need as they step into homeownership."
The passage of S. 2155 by the Senate Banking Committee affirms MHI's longstanding position that it is inappropriate for a manufactured housing retailer or seller - whose business is to sell homes and who is not receiving any gain or compensation for minimally helping the borrower with the mortgage loan process - to be subjected to compliance requirements and potential liability for areas that are clearly designed to apply only to the actual entity making the mortgage loan. MHI will continue working with its champions as the bill moves through the legislative process.
The inclusion of this language in the Senate's financial regulatory relief package is the result of MHI's persistent efforts to ensure the needed changes contained in the Preserving Access to Manufactured Housing Act are passed into law as soon as possible. In addition to the Senate regulatory reform package, H.R. 1699, the Preserving Access to Manufactured House Act, was passed by the U.S. House of Representatives on December 1. The language was also passed as a part of the House's financial reform package (H.R. 10) in June. In September, the House also passed the bill's provisions as a part of its Fiscal Year 2018 Appropriations package.