Analysis and Opinions of the amended version of H.R. 1776,
"The Manufactured Housing Improvement Act"
By: "The American Internet Society of Manufactured Homeowners"
Part I
"The Illusion of Safe and Affordable Manufactured Housing"
We will discuss three of the primary concerns in manufactured home safety and keep in mind these are only the top three.
Fire
The percentage of fires caused by defects in manufactured housing is significantly higher than any other type of housing. Despite a general downward trend in fire-related injuries and deaths, the Ninth Report to Congress documents a troubling increase in fire-related deaths in manufactured homes built since 1976. It is troubling that Congress would move forward with this legislation without the benefit of any reports from the President to congress on manufactured housing in the last 4 1/2 years. It would appear that the word of the industry that is being regulated is all that Congress needs to justify their support for this legislation, which only benefits the industry being regulated. Congress is certainly not taking the word of the consumers of this product who have been very verbal in their opposition to this legislation and who are telling Congress what is really going on outside of Washington DC. This makes congress's true intentions for supporting this legislation suspect.
Indoor Air Quality
Manufactured Homes can only be characterized as having indoor air quality that is a toxic environment. This is a result of using building materials that out gas Formaldehyde at levels found by the EPA to be unacceptable. The emission or out gassing of Formaldehyde by cheap building materials, which in some instances is known to be 50% more and even higher than the safe levels for out gassing recommended by the EPA. The more of these cheaper materials you use (Affordability), the more saturated the indoor air becomes with formaldehyde. Formaldehyde is more commonly used in the production of cheaper building materials (Affordability), so there is little doubt that a large volume of materials that out gas formaldehyde are used in a manufactured home and HUD will not deny this. To this date there is really no choice and the regulations require that a manufactured home consumer be given a Formaldehyde health notice before consummating the deal, this is not enforced and strictly adhered to by the industry. The notice is done in a manner that does not alarm the consumer and this can only be characterized as a deceptive practice considering the true risk. The improper design and or construction (Affordability) of the home allows’ moisture to build in the wall cavities of the home and creates’ a rich environment for growth of molds. This is not the result of a HUD-code as asserted by the industry and HUD that would prevent the proper design and assembly of a manufactured home. If this were the case, then all of the homes would have this serious defect in them and this does not appear to be the case. On the flip side if all of the homes do have this exact defect, then this is an indictment of HUD for failing to act as prescribed by law to remedy this defect? This is a known serious health risk for all and can be extremely dangerous, just as Formaldehyde can be to young children and senior citizens.
Formaldehyde
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Data source - The EPA
EPA estimates that, if an individual were to breathe air-containing formaldehyde at 0.08 µg/m3 over his or her entire lifetime that person would theoretically have no more than a one-in-a-million increased chance of developing cancer as a direct result of breathing air containing this chemical. Similarly, EPA estimates that breathing air containing 0.8 µg/m3 would result in not greater than a one-in-a-hundred thousand increased chance of developing cancer, and air containing 8.0 µg/m3 would result in not greater than a one-in-ten-thousand increased chance of developing cancer.
The highest levels of airborne formaldehyde have been detected in indoor air, where it is released from various consumer products. One survey reported formaldehyde levels ranging from 0.10 to 3.68 ppm in homes. Formaldehyde has also been detected in ambient air; the average concentrations reported in U.S. urban areas
The EPA wording is a little misleading. It is not clear if these dosages are per day or per lifetime so I'm going to assume that this is per day during a lifetime based on some of the other information provided. These will error in favor of HUD's stated safe levels and since the numbers from HUD and Georgia Pacific is based on per day. For every increase of exposure by a multiple of ten, there is an increase by a multiple of ten for the risk of developing cancer as a result of exposure to Formaldehyde.
Formaldehyde: 1 ppm = 1.23 mg/m3
Data source - Georgia Pacific and HUD 3280
NOTE: Particleboard is one of several sources of formaldehyde in a manufactured
home.
Georgia Pacific specification for particleboard (this is the best performer and most of the others were the maximum allowed under HUD-code of 0.3 ppm for particleboard) Formaldehyde emission level of 0.2 ppm.
mg/m3 = (ppm) × (molecular weight of the compound)/(24.45)
Molecular weight = 30.03 g/mol
HUD-code - 0.3ppm = 0.37 mg/m3 or 370.0 µg/m3
GP spec - 0.2 ppm = 0.25 mg/m3 or 250.0 µg/m3
Let's carry the EPA data from above for the increase risk of
cancer out to make this point
0.08 µg/m3 = 1-in-1, 000,000
0.8 µg/m3 = 1-in-100, 000
8.0 µg/m3 = 1-in-10, 000
80.0 µg/m3 = 1-in-1000
100µg/m3 = 1-in-875
150 µg/m3 = 1-in-812.5
200 µg/m3 = 1-in-750
250 µg/m3 = 1-in-687.5
300 µg/m3 = 1-in-625
350µg/m3 = 1-in-562.5
375 µg/m3 = 1-in-531.25
400µg/m3 = 1-in-500
800.0 µg/m3 = 1-in-100
Approximately
HUD-code = 1-in-532
Georgia Pacific = 1-in 688
It is approximated that 25,000,000 million people live in 12 million manufactured homes. 25 million / 532 = 47,000 person will most likely get cancer as a result of this exposure. Cost to treat cancer is approximated at best case to be $200,000 dollars. 200k X 47,000 = 9.4 billion dollars (Affordability), 9.4 billion / 12 million = an increase cost of approximately $783 dollars per home in additional cost that will be burdened by society. This may not sound like much, but consider that this amount would have allowed for materials that contained much lower levels of Formaldehyde and eliminated some all together. The heavy use of particleboard in manufactured housing is just one of the sources. Many cheaper (affordability) building materials use Formaldehyde a chemical medium and these materials are already widely used in manufactured housing. Envision this, if you put one car in a closed room with the engine running and provide adequate ventilation to cycle the air at a rate that prevents the room from building up to lethal levels of chemical compounds. Now put a second car in that room without improving the ventilation and a third source of chemical compounds and so on. If the manufacturers would all use the more expensive engineered board products like GP's this would at least be equivalent to plywood for Formaldehyde emissions, but this is counter to affordability to the industry.
Mold
We do not need to go into detail as to the dangers of mold. This should be evidenced by the fact that when it is found in a building, the building is immediately evacuated. Manufactured homeowners affected by this moisture condition have not received one single notice as to the existence of this potential serious health risk in their home. There are no known plans that can be found in the works by the manufacturers to have this notice issued. This failure to issue a health notice in the prescribed time from discovery of a potential serious health risk by the manufacturers is another violation of federal law and another failure by HUD to enforce the Federal law. The manufacturer regardless of whether or not the cause is a HUD-code violation or a HUD-code that prevented the proper construction of a manufactured home should have issued this notice. In the event that the manufacturer failed to issue a notice of a condition existing in a manufactured home that poses a serious health risk to the homes occupants then the Secretary should have ordered the manufacturer to comply with this legal requirement. A father i n Central Texas is no longer capable of functioning as a productive member of society and his child is permanently and severely brain damaged as a result of mold contamination in their home. This incident is one of many and would make it impossible for any one to argue that mold is not a potentially serious health risk to those exposed to it and most especially in a sealed indoor air environment such as a home. The industry, federal and state governments know that if you have homes that have moisture build in the walls of homes that this will facilitate the growth of toxic molds.
To help lawmakers understand the extent to which moisture builds up in the wall cavities of manufactured housing we will use an excerpt from a letter written by Bobbie Hill, the Director of the Texas Manufactured Housing division. It should be noted that while the industry and some State SAA's do not see this condition as a code violation, that the independent Engineers who have reviewed the HUD-code on behalf of consumers can find nothing to support this position. They have commented that there is no excuse that the HUD-code can provide to the manufacturers for not building homes for locating in Humid/Fringe climates that would perform to prevent this condition.
Bobbie Hill, The Director of the Texas Department of Manufactured Housing, September 30, 1999
A home was sold to consumers in Lumberton, Texas in June. The home was set up according to manufacturers' instructions, site preparation done properly and the home was skirted and vented (no mention of a ground vapor barrier). They had been in the home two months, and the manufacturer had to change out fourteen (14) sheets of sheetrock, due to moisture in the walls. Two weeks later, the retailer went back to see how things were and found the walls were mushy, again. So mushy that if you pressed your thumb to the wall, it would leave a thumbprint.
Home Anchorage
The variables are so many to properly anchoring a home with the traditional systems currently in wide use it is more than likely that few if any homes meet the current federal standards for wind load resistance and most certainly do not in wind zone 2 & 3 and this legislation will insure that this is acceptable.
The industry and HUD have both made claims that this equipment does work and performs well if properly installed, again there are so many variables it is unlikely that an installation will be proper. First, and most notable is we can find no instance where HUD or the industry have said that these devices will perform to the federal standards, just that they work well, although it is doubtful if directly confronted that the industry or HUD will tell the truth since this would be an indictment of what has been going on over the last 6 years. Second and most important, the testing was done under ideal conditions and the equipment was installed under the supervision of professional Engineers. Soil auger anchors under these perfect conditions would not meet the federal wind load standards for wind zone 2 and 3 and it was unlikely if the conditions were anything other than perfect conditions for wind zone 1, that they would perform when most needed. Rock anchors, with these you might as well leave the home unanchored in all 3-wind zones because they just will not work when most needed under any conditions. Third and most troubling, competitively priced equipment developed by one company and approved for use in 1996 does perform to the HIGHEST level of protection but is rarely used by the industry and even when requested by the consumer and agreed to be the industry this is no guarantee that the consumer will have their home tied down with this system. The consumer is usually left battling to get what they requested installed and agreed to by the retailer and are generally told that it will now be an additional charge if they want the system that performs to the highest standards of protection.
The problem is that if HUD and the industry admitted that the other systems would not meet the federal standards then this would create a liability for HUD and the industry for allowing and continuing to allow the use of this equipment in spite of having knowledge that it does not perform to the Federal Standards. The consequences of this admission along with the pressures applied on HUD by the industry to not make this admission have prevented wide acceptance by the industry of this equipment. Now for the money trail, if the federal standards were enforced it would cause the other makers of anchoring equipment to invest the money (Affordability) as this one company did and come up with their own competitively priced systems that would perform to the highest standards of protection or close their doors. Closing their doors is what should happen if they are unwilling to innovate. These other makers of equipment are content with death and destruction and support this legislation, which will once again legitimize their equipment and mandate that their equipment be defended as being safe even though it is not.
How safe is a mobile home in severe weather?
Recent unbiased scientific studies have indicated that a person is safer in their car than in a mobile home during severe weather. Congress will mandate with this legislation that manufactured homes that are not as safe as an automobile in severe weather are safe and will require HUD to promote in the private market place that this housing is safe. They just will not say that it is not as safe as an automobile in severe weather.
Nobody is saying that we should run out and fix all of the problems at one time, but we are saying that under no circumstances should Congress be declaring that we have achieved safe manufactured housing and putting language in the legislation that will make it very difficult if not impossible to improve this housing for the purpose of protecting the public health beyond where it is at as described above on the day this legislation is enacted, if it passes.
Part II
Points of Concern about the Findings and Purpose
of H.R. 1776
Before we begin let's discuss Affordability.
Webster's Seventh New College Dictionary defines afford as, "To manage to bear or bear the cost without serious loss or detriment". A consumer must be able to bear the cost of the home without leaving something out that will cause them serious loss later on. Without sufficient quality, durability, and safety in whatever you buy, you really can't afford it. This industry the majority of the time only considers what the consumer can bear at the time of sell, and does everything possible to assure that they maximize the financial load on the consumer to extend their profit margin. This maximization of profit also applies to reducing the cost of producing the product and without a defining the intent of affordability in this legislation it will be abused and the consumer will inevitably have a home that is more expensive per month than a site built home, which is too often the case today. While the latest revisions make some effort to clarify this, the waters are still muddied because this term remains undefined.
FINDINGS
The finding excludes the need to improve the quality, safety, and durability of manufactured housing. In its self it does not raise alarm, but when it is taken in context with the purpose of this act, this is an alarming statement since there are no provisions for improvement and it contains language that could be construed to prevent improvement. There is language that does present the deception that improvement of the safety, quality, and durability are still objectives, but these are always negated by the need to satisfy affordability and the need to "protect" the status quo. It presents the appearance that any savings would be passed to consumers. This is another deception since the free market largely controls affordability to the consumer and when connected to the rest of this legislation will certainly only apply to the cost to produce this product and not cost to the consumer as affordability is defined by Webster. The industry’s history of fraud and abuse is a clear indicator that his industry will NOT pass any savings they benefit as a result of this legislation to the consumer.
PURPOSE
(1) To protect the quality, durability, safety, and affordability of manufactured
homes.
Problem
The first is the use of the word "protect". To protect is to defend; this is a declaration by congress that the objectives of this enumerated purpose have already been achieved. This enumerated purpose has been tied to "affordability", which will likely counter any attempts to improve the safety quality and durability. Affordability combined with "protect" could hinder if not prevent any attempts to improve the safety, durability, and quality of manufactured housing. This point in time, set by congress would say that what is being done on the date of this legislation’s enactment is already safe, durable and of quality. Any attempt to improve the quality, safety, or durability could be taken as in indictment of this congressional declaration and a direct assault upon any regulation established under the provisions of this legislation or an existing regulation. Defending the status quo is what some members of congress and the industry and its supporters have accused the opponents of this legislation who defend a law that allowed for unfettered innovation and encouraged it. This characterization of the opponents of this legislation seems at odds since this legislation actually contains language that will hinder or stop improvement of this product and defend (“protect”) this as the status quo.
This could also put the section of the legislation that grants the Secretary authority in an emergency to make changes to protect the public in conflict with the purpose of this legislation. Does this mean that in an emergency if the changes required too protect the public were to cost anything or improve the safety of manufactured housing that the Secretary will not have the authority to act? This could be an assault on the 1st enumerated purpose to protect the affordability of manufactured housing and could be an indictment of the congressional declaration that the safety, quality, and durability of manufactured has already been achieved.
(2) To facilitate the availability of affordable manufactured housing and increase homeownership for all Americans.
Problem
This sounds noble but it is doubtful that since the opportunity for homeownership is controlled extensively by the free market, that this legislation will do anything towards this objective. It does however strengthen the inferences on reducing the cost to produce this product, which is good for the manufacturer and as for the consumer; they will receive an inferior product and be expected to pay for this reduction in the cost to produce with their health, safety, and hard earned money.
(3) To provide for the establishment of "practical", uniform, and, to the "extent possible", performance based Federal construction standards.
Problem
Practical uniform Federal Construction standards is what the 1974 Act seeks to achieve. There is a misconception that the current Act did not seek to achieve this objective. To help you understand the intent of congress when they passed this 1974 Act I will quote from Representative Louis Frey of Florida's 1973 statement to the Senate Subcommittee on Housing and Urban Affairs. "After further investigation I concluded that we needed a National Mobile Home Act, an act that would give us UNIFORM standards with "state enforcement" and an Act at the same time, that would protect the legitimate manufacturer". Nothing in the current Act prohibits these objectives and the Act actually encourages these objectives. Where do you suppose HUD and many state agency's got the notion that the only role the state had in this program was installation standards and regulations. They wonder why the enforcement of the standards and regulations is unobtainable, read Frey's statement again, who was supposed to enforce the federal construction and safety standards. The industry has done a remarkable job of selling the bill of goods that the states roll is limited to the installation of manufactured homes. Anyone that say's that this was not the intent of this legislation is at odds with the 1973 testimony surrounding this legislation. Just to give you an idea of what the industry wanted in 1973, they wanted a state-by-state warranty law and nothing else in terms of warranties. The testimony of top industry officials makes it clear that they understood the intent of this legislation, they didn't like but they understood it and it leaves this author wondering how on earth with intentions made so clear, that this program never got on the right track. Oh well, it is never to late to remedy the mistakes of the past, as congress has shown time and time again, they are willing to do when it makes for good press, but of course this would not be good press.
The standards will be lowered from the highest level of protection to high standards of protection. Performance has been tied to affordability. What affordable means remains undefined and in light of the lack of a congressional record for this legislation it will be difficult if not impossible to interpret the intent of congress.
The only creditable challenge of national preemption of the 1974 Act was the 1985 Liberty case. The federal court upheld national preemption in this case based almost entirely on one term or statement used in the 1974 legislation and this was the "highest" level of protection. The Federal court found that the federal law already provided the highest level of protection for the public and therefore there was no room left for the States to have their own regulations for which there already existed a federal regulation or standard. This program will certainly be challenged again; only this time there is room for States to offer their citizens a higher level of protection than that of the federal standards and regulations. This will allow for the creation of un-uniform regulations and standards state-by-state defeating this objective.
(4) To encourage innovative and cost-effective construction techniques
Problem
This is a deceptive way of saying cutting corners and this legislation encourages this practice and there is no one better at it than this industry. We will provide an example of what HUD and the industry consider as an innovative and cost-effective construction technique. This example is taken from one of HUD's own publications.
Innovations at the cutting edge - New ideas in Manufactured Housing
Minimizing the cost of innovation - The industry has thought of and applied most of the conceivable cost-cutting measures. Some manufacturers make trusses out of 2 X 4's ripped into thirds and many HUD-code homes lack exterior wall sheathing. And they wonder why they have a moisture problem in the walls of the homes and consumers have roofs that are sagging into the living space of many homes or will not support a snow load. The HUD publication makes it sound like the industry quietly abandoned these ideas, but the truth is that a couple of states that understand their role in this program challenged these practices because they violated the federal standards.
(5) To protect residents of manufactured homes with respect to personal injuries and the amount of insurance costs and property damages in manufactured housing, consistent with the other purposes of this section.
Problem
If it cost something to protect a homeowner from personal injury, high insurance cost or to protect the homeowner from property loss, would it not be inconsistent with the other enumerated purposes if this Legislation, which all either state or are directly tied to affordability. Protecting a citizen from death was excluded from this legislation but this would require the highest level of protection, which this legislation does not provide for this country's citizens.
This legislation no longer sees the need to protect those who live around manufactured housing. Could this be to cloud any future legal challenges that are being discussed that would charge that the government by lowering the standards would relegate manufactured homeowners to a status of second class citizen and this would be paramount to discrimination. This finding of discrimination has already been reached by a Dade County, Florida grand jury following Hurricane Andrew and in part motivated the need to improve the wind load standards and create wind zones for manufactured housing. The industry has fought the higher wind load standards to this day, and will finally be able to undo these with this legislation. If the neighbor who lived in a site built home was in approximately the same danger from the catastrophic failure of the poorly constructed manufactured housing facilitated by this legislation and the government has not offered to protect the public in general from these dangers, would they not be reasonably equal in this manner?
(6) To establish a balanced consensus process for the development, revision, and interpretation of Federal construction and safety standards for manufactured homes and related regulations for the enforcement of such standards.
Problem
This in itself is not catastrophic to consumers but should read, "to recommend" Federal construction and safety standards, interpretations and revisions to the Secretary. Without this the purpose is in conflict with other sections of this legislation, which in light of the lack of a congressional record of congress's intent could cloud where the authority lies to establish, interpret, revise and approve standards. The time frame granted to the Secretary to accept, reject or modify standards and regulations presented by the consensus committee is unreasonable and it is more than likely that the Secretary will ever complete this task before the time period expires and the standard or regulation is adopted by default. This limitation will create an incentive for HUD to not bother with determining if the proposed standard or regulation serves the purpose of this legislation. The staff resources that would be granted to the consumer and general interest group have been conditioned and are therefore restricted. This will ensure that the industry with its unlimited resources will dominate the committee. The members of the committee have been granted immunity from crimes of corruption. In light of this it would have been appropriate for Congress to include in the prohibited acts that any member caught extorting, bribing or threatening in any way another member of the committee in an effort to influence the committee member's vote, or acceptance of bribery or failure to report attempts by another committee member to unduly influence the decision of another member or self would be subject to disbarment from this process and all regulations and standards thought to be corrupted by these acts would be subject to review by the Secretary with no time limits. This would have provided the incentive to the consensus committee members to not attempt to corrupt the process. This legislation not only legalizes corruption in this process but with much to gain or loose for the industry it will encourage it in this balanced consensus committee.
(7) To ensure uniform and effective enforcement of Federal construction and safety standards for manufactured homes.
Uniform enforcement provides consumers with protections and it would be difficult to argue that if the consumer's problems were being resolved through uniform enforcement, it would be costing the industry money. For this reason the industry has worked long and hard to prevent uniform enforcement of the federal standards and regulations through manipulation, deception, use of position, power, and influence. Much of this is what is being used by the industry to help propel this legislation through Congress. This legislation will not achieve uniform enforcement of the standards and regulations, however it will legitimize the lack of uniform enforcement currently being promulgated by HUD and the industry.
There are no consequences in this legislation to HUD for failing to enforce the standards and regulations. The current Act fails to provide consequences for HUD and is the single greatest contributor to the current state of affairs. Without consequences for HUD should they fail to uniformly enforce the standards this objective will remain unobtainable and once again the consumer will be the only one to suffer the consequences of this failure. This legislation should require that in the event of failure to achieve the purposes of this Act in 10 years, that this federal program should be ended entirely and the industry regulation left to the individual States. At least then some citizens in this country would have a fighting chance to have a home that was really affordable and safe instead of one that presented the illusion of affordability and safety. 10 years should be ample time and would be consistent with this legislation's other limitations of time. The industry or HUD should not object to this time frame since they hold out to congress and the public that the time limitations provided in this legislation to complete tasks is adequate to accomplish the purposes of this Act.
This cannot happen without funding, which cannot happen unless Congress funds this program outside of the fees collected by the Secretary from the manufactured housing. The current label /inspection fees are a combined $24 dollars per home. HUD currently keeps $12.50 of this and claims this is not enough for them to enforce the standards and regulations. The Secretary is authorized by the Act to carry out whatever inspections he or she deems necessary to enforce the standards and regulations. If the current number of inspections is not sufficient to insure that the standards and regulations are being adhered to, the Act authorizes him to charge the manufacturer whatever is necessary to do this. The thought behind this was that if the manufacturers wanted to keep these fees low, then this would provide them with the incentive to follow the standards and regulations. Now what is disturbing about this is that the Secretary has the authority to raise the fees for the purpose of enforcing the standards and regulations and stands before congress and tells them that they don’t have the money to do this job. In order to satisfy the Secretary's new mandate to promote the acceptance of the quality, durability, safety, and affordability of manufactured housing in the private market place he or she will be required to use an even larger portion of the label/inspection fees to carry this out. One of HUD's objectives behind its support of this legislation is to allow them to take money that currently belongs to the States for the purpose of enforcement of the standards and makes them federal dollars (This in conjunction with the reduction in the states authority under this program appears to cause this legislation to be in violation of the Federalism Act).
Raising the fees to provide more funding for Inspections and enforcement could be inconsistent with the purposes of this act since enforcement is tied to affordability, undefined while promotion of this product is not restricted in any manner and indicates that label / inspection fees will have to be applied to promotion of the product first and all else last. This suits the needs of the industry to have laws that are unenforceable by reasons of the government's failure to properly fund the program, and at the same time having laws that relieve the industry of its liability for the product that it produces.
So in short what HUD is telling Congress is that they are going to use this inspection/label fee of $24.00 dollars to fund more staff, pay 3 and up to 5 separate contractors and numerous other contractors, fund (unlimited) the congressional mandate to promote manufactured housing in the private market place, and adequately fund a federal enforcement program for the construction of manufactured housing and provide the states with adequate funding so that they can enforce the standards and regulations for home installations. This is a fantasy and with HUD's history of non-enforcement of the standards while buying computers and funding marketing schemes for the industry, Congress can count on a program that continues to make this country's citizens crime victims of this industry and victims of ineffective government.
Note: HUD recently used 3 million dollars of label / inspection fees to buy computers to do what they claim the current act prohibits them from doing and this was to promulgate the standards. 7 million dollars more of the fees were returned to the industry through credits because HUD failed to use the label / Inspection fees to promulgate the standards claiming that use the fees for this purpose was prohibited.
(8) The creation of a balanced consensus committee
This will mark the first time that a government agency has turned control over of it standards and regulation writing process, how the standards will be enforced, and what the actions can be taken to punish those who fail to comply to a completely outside body. We think that we can explain why this will not be balanced and lawmakers know it can't be balanced by discussing "Dominance defined".
"Dominance defined - the term dominance means a position or exercise of dominant authority, leadership, or influence by reason of superior (above average) leverage, strength, or representation". There is no way to balance this committee, and this fact is admitted with one simple word, "SUPERIOR". In other words, someone is going to have an advantage; it just can't be a superior one.
Let's define superior - above average, does above average mean above average to one group or above average to the combination of the other 2 groups?
Let's define balanced - be equivalent to
How can this committee be balanced, one of the groups can have a less than above average advantage, but never the less an advantage over the greater of the other TWO groups combined in leverage and strength. Since the industry has virtually unlimited resources and funding it will be impossible for the other groups to compete since the resources available to them have been conditioned by affordability and therefore are limited. This legislation grants immunity for committing anything that is defined as official corruption including bribery. Bribery and the acceptance of bribery will not be illegal if you are a consensus committee member. Therefore the industry can simply buy the loyalty of enough members of the other groups to insure that their position will be the 2/3rds required too support the industry's recommendations for standards and regulations. The acceptance of money or financial reward has been conditioned by Employment by the industry and is the only limiting factor to the acceptance of a pay-off and it can be argued that it doesn't actually provide any limiting factors. Employment is undefined, does this mean if someone is acting in a consulting or under a contractual agreement for the industry that they are employed by the industry? The consensus committee members from the consumer and general interest groups can have a financial interest or personal relationship with the industry so long as it is not significant, undefined. Does this mean that if a person earns 50% or less of their $1 million dollar annual income that they do not have a significant financial relationship with the industry? What is a significant relationship? Does this mean a brother, cousin, sister-in-law, what does it mean?
Part III
"Other Ambiguous Terms Appearing In H.R. 1776"
Periodic monitoring
The monitoring or inspection of manufacturers, retailers, and installers is conditioned by periodic. In the event that a serious defect is discovered in a manufactured home, could we be forced to wait until the next scheduled inspection of the manufacturer, retailer, or installer to discover the scope and numbers of homes affected by this defect? There are no provisions to allow for inspections to occur at any time other than those established by periodic. This legislation also limits the scope of the inspection of manufacturer, retailer or installer records only as the records relate to affordability.
Installation
First and most notable is the fact that this legislation creates a separation between the design of the home and the design and instructions for installation. This will relieve the manufacturer of their responsibility for a home’s failure to meet the standards should it be found that the problem was related to the design of the installation and or instructions for installation or improper installation by the manufacturer’s agent. Improper installation is the cause of many homes’ failure to perform to the federal standards. The proper installation of a home is an integral part of the whole home design from the ground up. FHA Commissioner Bill Apgar made this very clear is his written testimony to Congress concerning this legislation. It would seem highly imprudent to create this separation considering that the creation of the model standards will be based entirely on the manufacturers design of the home AND the manufactures design and instructions for the installation for the home. To say that the manufacturer is not responsible for the failure of a home to perform to the federal standards because of errors in the design and installation instructions that are the result of their installation design and instructions seems very inappropriate.
The rules governing the establishment of model codes for the installation of manufactured housing is a circular event that mandates that the model codes will be those of the industries choosing. This puts the industry in charge of writing the standards and regulations for installation regardless of any objections of the consumer or general interest group or by the Secretary of Housing. This is done by tying the creation and establishment of the model codes through the use of the word "and" to installation model standards consistent with that of the manufacturer. This can only be characterized as putting the cart before the horse. The manufacturers installation design and instructions should be consistent with the model standards for installation and not the other way around. This makes the whole federal installation program concept suspect and therefore untrustworthy for protecting the public from unreasonable risk of injury and it will forever be unacceptable to consumer organizations. But it will however release the manufacturer, retailer, and installer from any liability for death, injury, and loss of property suffered by the homeowner due to inadequate installations that are the result of inadequate installation standards since the industry will have been following the inadequate federal installation standards that they wrote and this legislation mandated.
The determination of the final cost of manufactured housing to the consumer.
This legislation will not satisfy affordability of manufactured housing to the home buying public. There are just no mechanisms in this legislation that can control this but it will allow affordability (undefined) to be applied to the manufacturer allowing them to cut corners and lower production cost. This legislation comes right out and says this is its purpose, "to encourage innovative cost-effective construction techniques". Since it does not say that these innovative cost-effective construction techniques should improve the quality, safety, and durability of manufactured housing or even hold the line if it is not consistent with affordability and improvement has been prohibited by the term protect or defend then this can only be applied to cutting construction cost. There will be no incentive for private industry to invest in the development of new products that would improve this product for the consumer since Congress has already declared that there is no longer a need to improve the quality, durability, and safety of this product for the consumer. The purpose of this Act would also make it difficult if not impossible to implement any such improvements since this could construed as an indictment against what is already being done as not being safe, durable, and of quality.
What Congress is going to get with this legislation is a source of housing with an extremely high default rate among consumers who's homeownership dream turned nightmare forces them to abandon their home to seek safe affordable housing in site built single and multi-family dwellings. The rapid deterioration of this housing combined with the theft and fraud committed by this industry against the consumers has caused a very significant number of repossessions and defaults that has caused self-inflicted financial devastation on this industry. As a result of this unethical and often illegal behavior and the delivery of poor quality product to the buying public, several industry lenders closed their doors to loans for manufactured housing. Consumers have come to recognize that the federal manufactured housing program does not deliver what it promises and as a result are looking for alternatives to manufactured housing.
This same fraud and abuse by this industry is currently taking place on FHA, Fannie Mae and Gennie Mae loans. This legislation will force open this once limited source of financing from FHA, Fannie Mae, and Gennie Mae to the industry and replace lenders who got away from this corrupt industry or provide lenders with the incentive to return to the manufactured home loan business and will allow this industry to continue its consumer abusive practices. This time though with they will have the benefit of mortgage insurance protections. There is little doubt that unless legal actions are taken by the government to clean up this industry that the drain on the mortgage insurance pools will be devastating and lawmakers should take this warning seriously. Having the mortgage insurance pool significantly drained as a result of this industry's poor quality product and fraudulent practices will cause other sources of affordable housing to suffer.