George Allen / EducateMHC Blog Mobile Home & Land Lease Community Advocate & Expert

December 6, 2009

Major WARNING to LLCommunity Owners!

Filed under: Uncategorized — George Allen @ 10:50 am

Major WARNING to LLCommunity Owners Nationwide!

Your State’s Eventual Implementation of the Federal S.A.F.E. Act *1
May Bite Your On – site, Housing Self – finance Program in the Butt!

First, the Good News!

Landlease (nee manufactured home) communities have long been considered one of the very best ‘off the investment realty radar screen’ opportunities because (of)

Relatively limited property supply! Think NIMBY, LULU & BANANA.*2

Investor leases only land, so generally fewer and lower operating $ expenses!

‘Recession proof’ reputation when homesite rents are low and homes affordable!

Opportunities for investor to ‘add value’ via on – site sale of new and resale homes, the self – financing of said transactions, and AITR*3


The Not – So – Good News!

Relative to the last LLCommunity characteristic cited above, regarding ‘self – finance of (housing) transactions’: Unless a LLCommunity owner/operator is effecting ‘cash only’ deals or transactions with homebuyers, expect your state’s present or near future implementation of the Federal S.A.F.E. Act to require your 100% participation in this new, nationwide licensing system & registry database for residential loan originators! Yes, YOU! And Seriously!


The state of Ohio, thanks to efforts by its’ manufactured housing association (‘OMHA’) is ‘ahead of the curve’ where the new federal program is concerned, as their state’s law becomes effective January 2010. At a recent Super Symposium on this very subject, I asked Ken Rishel of Precision Capital to outline S.A.F.E. Act related measures about which LLCommunity owners/operators and MHRetailers should be aware in the immediate future.

If not presently involved in any form of self – finance, but use outside lenders like Triad Financial Services or 21st Mortgage Corporation, as sources of financing for new and or resale home sales in one’s LLCommunity, and sales people are advising customers about lending sources, and assisting in completion of credit applications, the business entity employing the sales staff is likely going to need to be registered as a Mortgage Broker*4 in the state where said property is located. And not only that, sales personnel are going to need to be trained, likely tested, and licensed as Mortgage Loan Originators.*4

If presently involved in self – financing of homes, the business entity may need a regulated loan license*4, a Mortgage Lender Registration*4, and sales persons will likely need Mortgage Loan Originator’s Licenses.*4

In addition to state registration and licenses, there’s also a requirement for national registration, through NMLSR.*5

In certain states, relief may be available if a business entity’s sales people are prohibited from assisting customers seeking financing, except through direction to a website or telephone number of an outside licensed lender who handles the transaction in toto. If your self – finance is handled entirely by a licensed entity, the same exemption may also apply.

The servicing and collection of existing loans is not ‘grandfathered’ in the S.A.F.E. Act. And ongoing mortgage servicing and collections must be handled by a properly licensed Mortgage Lender.*4

If a business entity operates in multiple states, it must be registered, licensed and bonded in each of those states.

The basic requirements*4, pursuant to licensing and registration under the S.A.F.E. Act require fingerprinting by an approved source, a personal history given under penalty for perjury, a credit check, an FBI background check, a civil records check, bonding, and pre – licensure training (education) and successful passing of a standardized test. There’s also a continuing education requirement.

Failure to comply is a felony with a substantial fine*4, accompanied by fine for each day of violation, and an opportunity for the borrower to sue all parties involved.

If you own/operate one or more LLCommunities and the content of this Info Blog is disturbing to you, – as it should be – contact one or more of the following resources for information and assistance:

Ken Rishel, Precision Capital @ (217) 971-3968

Tim Williams, Ohio Manufactured Housing Association @ (614) 799-2340.
Request a copy of Symposium outline describing Ohio’s new law, as a template.

Thayer Long, Manufactured Housing Institute and National Communities Council @ (703) 558-0678. Join the NCC division to stay abreast of this evolving matter!

Tim W. Williams, president, 21st Mortgage Corporation @ (800) 955-0021

Don Glisson, Jr., Triad Financial Services, Inc. @ (904) 223-1111

And finally; if you own/operate one or more LLCommunities in the U.S. or Canada, know that the 21st annual edition of the ALLEN REPORT (a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’) will be available 1/1/2010 for $134.95 from PMN Publishing @ (317) 346-7156, or free to subscribers to the Allen Letter professional journal (one year subscription also $134.95) – same phone #. Begin year 2010 informed; read all about the MHIndustry & LLCommunity ‘News, Views & How To’s’ in the Allen Letter professional journal each month!

End Notes.

1. ‘Safe And Secure Enforcement’ for mortgage licensing act of 2008; S.A.F.E. Act

2. ‘Not in my back yard!’, ‘Locally Unwanted Land Use!’ & ‘Build Absolutely Nothing Anywhere Near Anybody!’ Acronyms commonly used to describe local regulatory barriers to affordable housing of all types!

3. ‘Alternative Income to Rent’ measures per Allen Cymrot; cited in Landlease Community Management, available from PMN Publishing: (317) 346-7156

4. These terms and precise requirements related thereto, are going to vary from state to state, as will the penalties for violation of statutes. Seek advice from competent counsel, or a consultant specializing in compliance and finance – related issues for specific information

5. National Mortgage Licensing System and Registry or NMLSR

George Allen, Realtor®, CPM®, MHM®, Consultant to the Factory – built Housing Industry & The Landlease Community Real Estate Asset Class, Box # 47024
Indpls, IN. 46247

MHIndustry HOTLINE: (877)MFD-HSNG or 633.4764 This number is the primary source of MHIndustry & LLCommunity information shared in this Info Blog, the Allen CONFIDENTIAL! business newsletter, and the Allen Letter professional journal! Call!

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