The manufacturer is not required by the Secretary to show cause for the termination of private production services/inspectors, and in fact, he provides for a no questions asked, pain free transition from one private service to another (emphasis added) (24 CFR 3282.362(a)(2)). As well, the Secretary does not provide for any form of an appeal by such services if they feel the manufacturer has wrongfully terminated them.

Moreover, while the Secretary does not express or imply that private design services/inspectors can be terminated at the manufacturer’s whim, he has promulgated an environment whereby the manufacturer can extort conduct from such private inspection services (24 CFR 3282.202) that serve the partialities and corruptions of the manufacturer. The Secretary does this by providing that the manufacturer “is free to choose which DAPIA will evaluate and approve its designs and quality assurance materials”… A manufacturer may also obtain approval for the SAME design and quality assurance manual from more than one DAPIA. The choice of which DAPIA or DAPIAs to employ is left to the manufacturer” (24 CFR 3282.203(a)).

While the Secretary’s lack of reasonable safeguards to ensure the integrity or truthfulness of private production inspections is obvious, it is not so obvious when it comes to private design inspections. Under his regulatory scam, the manufacturers could choose to submit design and quality manuals to multiple private design inspection services, and then choose to employ the DAPIA with the determination most favorable to their partialities and corruptions – such behavior is encouraged by the Secretary. The “manufacturer may obtain design and quality assurance manual approval from a single DAPIA regardless of the number of plants in which the design and quality assurance manual will be followed” (24 CFR 3282.203(a)). “A design or quality assurance manual approved by a DAPIA shall be accepted by all IPIAs” (24 CFR 3282.361(a)(1)).

With NO safeguards to govern the terms of contracts or agreements [1], the manufacturers could and do construct such agreements to provide payment on a per design and/or quality manual approval basis, and then direct the bulk, if not all of their business towards the person(s) who are most favorable to their partialities and corruptions – such behavior is encouraged by the Secretary.

Suffice to say that the Secretary has created an environment hostile to effective inspections by making such persons beholding to the manufacturer for the amount of their pay and/or tenure of their position [2]. Go along or be pushed out. It is evident that the Secretary disregarded his own “conflict of interest” regulation by promulgating a regulatory environment for “private organizations” overtly hostile to the “employment security status of its personnel and “free of influence or control of any producer, supplier, or vendor” (24 CFR 3282.359(b)(2)).

The overwhelming majority of compliance design and production inspections in the United States are conducted by such private organizations. As noted earlier, the Secretary never bothered to implement 42 USCA §5420 (EMPHASIS ADDED) in his regulations, which would have been applicable to all persons employed by the manufacturers to ensure that the manufacturers were designing and manufacturing products that conform to all applicable MHCSS.

The maximum penalty under the Secretary’s contrived regulations for such private third party inspectors is disqualification. However, this may not occur at all if such disqualification would “impact” (ambiguous) the manufacturer (emphasis added) (24 CFR 3282.356(a)). Of course, the manufacturer could argue that such termination would “impact” them, and if termination were successfully averted, the inspection service would certainly feel beholding to the manufacturer.

‘If such disqualification would impact the manufacturer’ – it is evident that the Secretary is especially sensitive to the needs of his manufacturers.

The Secretary does NOT consider when deciding whether to disqualify the PIA (DAPIA or IPIA) employed by the manufacturer for “not adequately carrying out one or more of its required functions” (24 CFR 3282.356(a)), how such behavior would “impact” “the accomplishment and execution of the full purposes and objectives of Congress” (24 CFR 3282.11(d)). However, the Secretary does consider when deciding whether to disqualify the PIA employed by the manufacturer, for “not adequately carrying out one or more of its required functions” how this would “impact” (arbitrary & capricious) the manufacturer. This provides insight into who the Secretary has contrived the MHCSS Act to be for the protection thereof.

If disqualified, such private third party may immediately resubmit an application, which for re-approval need only include a statement explaining how such third party will prevent the reoccurrence of the event(s) or activity that gave rise to disqualification (24 CFR 3282.356(c)). What to say, oh yes, we will not ignore nonconformance anymore. However, upon re-approval, if such inspector does not ignore such nonconformance, the manufacturer can without any justification, simply replace such private inspection service with a service that better services the partialities and corruptions of the manufacturer. It would not take long in this environment for the DAPIAs and IPIAs to figure out whose putting bread on their table. The third party may also seek an informal or formal hearing to contest their disqualification by the Secretary (24 CFR 3282.356(a)). Whereas under 42 USCA §5420, such a person could be fined up to 1000 dollars and/or imprisoned for up to 1 year for failing to report such each such violation.

The inspection procedures established by the Secretary are cast in the image of the inspection procedures that were in place before the enactment of the MHCSS Act of 1974. Congressman Frey, whom was mentioned earlier, said this about those procedures.

Since the date when Congressman Frey wrote this assessment, there has been no significant innovation in the assembly process for manufactured homes. Congressman Frey based this 1973 assessment on his comprehensive research of State and Local laws, the inspection procedures thereunder, this industry, its practices, and its merchandise. A manufactured home is still today extensively assembled by hand, which dictates that defects are no more likely to be the same from unit-to-unit, than they are to be the same from site built home-to-site built home.

The only notable improvement in the manufacturing process may be in the manner in which manufactured homes are moved through the process during assembly. Ease of movement would not only serve to increase the rate at which substandard manufactured homes flow to the purchasers, but most likely lead to an increase in the number of defects in each manufactured home. The inspection procedures established by the Secretary, which will be discussed in a moment, are fundamentally the same as those Congressman Frey was referring to in the above article. While the guard changed, this did nothing to curb the “steady flow of substandard manufactured homes” since the same deficient inspection procedures were adopted, and are still in use today.

Note: For clarification, labels applied to the home by the manufacturer are legal.

Once the IPIA is satisfied that the manufacturer can follow their quality assurance procedures, leastwise when the IPIA is present, they can give the manufacturer the go ahead to do what is for all practical purposes under the Secretary’s inspection procedures, self-certify (2-4 week supply of labels) their merchandise. The IPIA is still required to inspect each manufactured home at one stage of its production, and legitimate oversight, leastwise to the extent that these defective inspection procedures can work, would dictate that this would be each at a different stage. In addition to the conflict of interest between the IPIA and the manufacturer, as discussed earlier, the Secretary’s regulations are absent such a random requirement. This means that the IPIA could fulfill its surveillance responsibility by inspecting each home at the first stage of production (the frame). Henceforth, the product will not be inspected again at any stage of production, including after being labeled.

Senator Brock (R-TN), who was the leading Senate force behind the enactment of the MHCSS Act of 1974, and it, was his bill, said on the public record:

Perhaps someone should have told the Secretary that the MHCSS Act does not provide statutory support for self-certification or quasi self certification by the manufacturers at any time, and that it would be a demagogic approach to provide for such system, but then this should have been obvious from “the clear language” in the MHCSS Act of 1974.

To assure that the IPIA is not allowing “a steady flow of substandard manufactured homes” to be delivered to purchasers (in good faith for purposes other than resale); the Secretary monitors such private organizations.

This sounds reasonable, monitor the IPIA as much as is necessary to ensure they are conducting, as many legitimate inspections as are necessary to ensure that a steady flow of substandard manufactured homes are not being delivered to purchasers.

If the Secretary or his agent(s) discover during any one of their not so secret visits to monitor the IPIA’s performance that they are not performing adequately, then they can schedule more not so secret visits to monitor such IPIA, that is, up to a maximum of four visits per year (emphasis added). It is imperative to understand that after the IPIA’s initial acceptance, the Secretary does not provide for the inspection of manufactured homes as part of his surveillance or monitoring of the IPIA. Only the records can be inspected, which promulgates an environment that is ripe for pencil whipping reports to create the appearance of compliance – do not do it and say we did.

Between the last not so secret visit and the present visit, which the last could have been one year ago, and between this visit and the next not so secret visit, which could be one year later, a steady flow of substandard manufactured homes can be delivered to consumers, which just happens to be the case.

Suffice to say that the monitoring of the DAPIA procedurally parallels that of the IPIA.

The Secretary’s inspection procedures rely heavily upon the manufacturer’s quality assurance program to prevent a steady flow of substandard manufactured homes. This method is not without merit when there is a commitment to quality assurance driven by risk.

The key element that drives a company’s commitment in good faith, to incur the high cost of establishing, maintaining and adhering to an effective quality process is risk, as in financial risk. Some types of financial risks come from loss of brand quality reputation, product liability lawsuits, product recalls, and significant warranty claims. This however assumes that the manufacturer affords notification and remedy in good faith.

With government policies, such as those established by the Secretary, which significantly mitigate the risk of loss of brand quality reputation, product liability lawsuits, product recalls, and significant warranty claims, there is little to no reason for this industry to commit the financial resources needed to legitimately manage such risks. Human nature as our witness, tells us that people will not spend money to manage risk (insurance) where there is little, if any financial consequence for failing to manage such risk. For example, if a person’s home were built entirely of non-flammable materials, would such a person spend money on fire insurance to manage the risk of fire? Essentially, this industry has used its political influence with Federal officials (elected and appointed) to establish a regulatory program that effectively shields them from such risks, thereby eliminating the significant cost to them of complying in good faith with their established quality assurance procedures.

History, right up to today, has well established that the Secretary’s inspection procedures, which rely heavily on the manufacturer’s quality assurance process, have no hope of preventing a steady flow of substandard manufactured homes. Just as it was before 1974, the quality assurance process has been rendered largely meaningless by significantly mitigating the risk to the manufacturer, of producing and then delivering defective merchandise to consumers. Read endnote i and it will be apparent that information from unbiased or largely unbiased sources, does not lend credibility to any claim that may be put forth to the contrary. The Secretary is effectively doing the same thing over-and-over again and expecting a different result – Einstein’s definition for ‘insanity’.

Prior to the Secretary aiding and abetting the manufacturers in obtaining the enactment of the status quo defending MHI Act of 2000, the Secretary could have raised label fees to provide the funding to pay for such services at any time. As well, only “the Secretary is authorized to contract with State and local governments and private inspection organizations to carry out his functions under this subsection” (42 USCA §5413(b)(2)). What were the Secretary’s functions under this subsection? “To conduct … inspections and investigations to enforce Federal manufactured home construction and safety standards…” (42 USCA §5413(a)

With this in mind, why did the Secretary promulgate the very system of inspection that Congress overtly rejected?

i
(1) “A Brief History of Deaths from Tornadoes in the United States”, Harold E. Brooks, Charles A. Doswell III, NOAA/National Severe Storms Laboratory, January 2001

“The mean (median) annual death rate from 1975-2000 in mobile homes was 1.23 (1.19) per million per year, while the mean (median) rate from 1985-2000 in permanent housing was 0.06 (0.04) per million per year. In short, the death rate is approximately 20 times as high in mobile homes compared to in permanent homes, and the mobile home rate is about 70% of the rate for the total U.S. population prior to 1925”

“There remains one particularly vulnerable group of people in the U.S., residents of mobile homes. The rate of death is relatively close to the pre-1925 values in the U.S. The increase in use of mobile homes for housing has meant that they are an increasingly large component of the overall death toll. Half of all fatalities from 1996 to 2000 occurred in mobile homes, more than twice the fraction twenty years earlier. It seems likely that the fraction of deaths in mobile homes will continue to increase.”

(2) “Manufactured Home Fires in the U.S”., John R. Hall Jr., National Fire Protection Association, December 1999

“These figures indicate that manufactured homes have a fire incident rate per 100,000 units substantially lower than the rate of other dwellings, but their fire death rate per 100,000 housing units is 66-85% higher. Table 4 also shows that the rate of fire deaths per 100 fires is more the 2 ½ times higher in manufactured homes than in other dwellings.”

Comment 1: 1973; Washington and Lee Law Review, Congressman Frey (R-FL) – “Foremost Insurance Company, which insures 85% of all mobile homes…found that 19.2% of all mobile home fires in 1972 were due to faulty electrical wiring.” “It also found that 13% of mobile home fires are the result of faulty furnaces and flues.” “One statistical estimate is that the average loss to a mobile home as compared to its value is 3.8 times greater than for conventional housing. Correspondingly, the mortality rate in mobile home fires is 3.29 times greater.”

NFPA, 1999 – 17.1% of manufactured home fires were caused by electrical distribution, and 13.1% of manufactured home fires were caused by heating systems. It does appear that over the course of 25-years there was been a 2.1% reduction in the number of fires caused by electrical distribution. However, this only represents a small fraction in the reduction of the overall fire related deaths. It is most likely that smoke alarms are responsible for the majority of what little improvement there has been in this particular statistic. Hence, it could be argued that the sole tangible safety improvement in manufactured homes over the last 29 years has been the addition of the less than 10-dollar smoke alarm.

Comment 2: Mr. Hall later suggests that this entire disparity MIGHT be eliminated if all manufactured homes met the MHCSS, suggesting that the entire death rate disparity was the result of fires in pre-1976 manufactured homes. Bearing in mind that the NFPA is politically sensitive to the needs of the industry, the NFPA based this particular statement upon the following annual average values from 1993-1997. 2920 fires, 78 deaths – pre 1976; 2350 fires, 27 deaths – post 1976. There were 14, 030 fires, 293 deaths annually during these same years where the year of production was not known, which it was not, explained how this was factored in, if at all, in reaching this conclusion. Great care has to be taken when reviewing this report; it can easily be taken out of context by those who would benefit, either politically and/or financially, from shedding a more favorable light on this product. Mr. Hall also said:

“…many pre-HUD-Standard manufactured homes were built to the NFPA voluntary consensus standard, which contained many of the features later incorporated in the standards. Another concern is that pre-Standard manufactured homes are older than post-standard manufactured homes, so there is a possibility that what appears to be a strong effect of the HUD standards is partly or primarily a strong effect of the age of the unit.”

Comment 3: Mr. Hall also suggests that the majority of such fire related deaths might be caused by the users, but contradicts this assertion with data that shows “Electrical Distribution” as the reported number one cause, and heating systems as the number two cause of fire related deaths in manufactured homes.

Comment 4: Mr. Hall also comments that in many fire related deaths, smoke alarms were not present are missing, and he implies that since the standards require factory installed smoke alarms that it must be presumed that the homeowner or some party downstream of the manufacturer must have taken them down. He also states that Manufactured homes are sometimes shipped with only the alarm-housing present. This deserves a closer examination.

24 CFR 3280.208(d) - The required detector(s) shall be attached to an electrical outlet box and the detector connected by a permanent wiring method into a general electrical circuit. There shall be no switches in the circuit to the detector between the over-current protection device protecting the branch circuit and the detector. Smoke detector(s) shall not be placed on the same branch circuit or any circuit protected by a ground fault circuit interrupter.

If the only thing present is the alarm housing, then the detector is not “connected by a permanent wiring method into a general electrical circuit” when the home is shipped from the factory. Hence, such home contained a known defect that represented an unreasonable risk of death or injury to the user if an accident occurs (42 USCA §5404(8)), such as a fire.

This strongly suggests that the manufacturers have an indifference to complying with the MHCSS, so it seems more plausible the manufacturer has greater indifference to fire safety. If it is plausible to knowingly ship homes without working smoke detectors, then why is it implausible that they would ship homes with no working smoke detectors? Moreover, fire detection equipment is often reported to be attached to circuits protected by ground fault circuit interrupters. Given that shipping them with only the alarm housing present violates the Federal standards, when do the manufacturers install the smoke alarms to remedy the false or misleading certification they issued? Who installs them later on? Do they send someone from the factory, or do the manufacturers trust the same people that must be removing them downstream to install them. Perhaps it simply does not matter whether it really complies with the standards so long as it is labeled by the manufacturer.

Comment 5: An Owens Corning Fiberglass Corporation survey from the early 1970s revealed that 51% of mobile home purchasers experienced construction related problems after moving in. A 1999 AARP survey, which found that 61% of mobile home purchasers experienced construction related problems within the first year of moving in. It appears that construction related defects have increased by 10% since the Federal government took over the supervision of this industry.

The AARP 1999 survey as well disclosed that only about 35% of mobile home owners were able to obtain repairs under the warranties provided by this industry. In 1973, the State of Wisconsin performed a similar survey concerning warranties and found that only about 50% were able to obtain repairs under the warranties provided by this industry. It appears that this industry’s failure to honor warranties has shown a net trend upwards (a 15% increase) since the federal government began its supervision of this industry.

Of course, everyone is out to get this poor us little industry that refuses to take responsibility for the performance of its product, so they of course claim that all of these studies or surveys were rigged to make them and their cheap and dangerous option (see last paragraph, page 42 and thru page 44) look bad. And so this industry has claimed since it first became apparent to the observant in the mid to late 1960’s that it was producing cheap and dangerous housing, and not the affordable housing they billed their product as being.