Скачать презентацию Manufactured Housing Lending in Communities Marty Lavin Tim Скачать презентацию Manufactured Housing Lending in Communities Marty Lavin Tim

32e7126c52b0894c5d750bb850862949.ppt

  • Количество слайдов: 48

Manufactured Housing Lending in Communities Marty Lavin, Tim Williams, Jeff Mouat Manufactured Housing Lending in Communities Marty Lavin, Tim Williams, Jeff Mouat

The Industry Pullbacks High volume periods, then peaks followed by a crash During crash The Industry Pullbacks High volume periods, then peaks followed by a crash During crash better lending and better types of loans more loans with real estate more loans on private property many fewer loans in communities result much higher credit with better execution

Funding Sources 1960’s and 1970’s – till ’ 73 Virtually every bank involved (52% Funding Sources 1960’s and 1970’s – till ’ 73 Virtually every bank involved (52% of all new housing starts) Then crash, and GECC and S & L’s till late 1980’s Then crash, and ABS markets start in 1987 Crash and no new source in sight for money Who will be next? (125, 000 annual shipments now)

Will GSE’s Become a Source? Tremendous liquidity and clout Know how to really study Will GSE’s Become a Source? Tremendous liquidity and clout Know how to really study problem Very adverse to losses, already lost their naivete, and won’t reenter without changes (Conseco bonds handled that)

ABS and the Markets Tremendous losses Now know the facts and learning more Less ABS and the Markets Tremendous losses Now know the facts and learning more Less risk adverse than GSE’s, but will want similar protections, still perceive many problems Probably will partner with GSE’s, which would provide substantial increased liquidity Both have lost their MH naivete

How does this Affect Community Lending? Home depreciation greatest in communities Highest percentage of How does this Affect Community Lending? Home depreciation greatest in communities Highest percentage of total repos are in communities and greatest severity Lenders and community owners have not always been friends in downturns or defaults Today lenders highly wary of in-community loans I estimate 100, 000 – 125, 000 homes of incommunity chattel loans not being done at present

Depreciation in Communities is the Enemy High gross – low volume sales model industry Depreciation in Communities is the Enemy High gross – low volume sales model industry standard Comunities as a housing option in given markets Leasehold rents pricing policies in communities Know the rules for pricing your rents what is your competition? Apts and other housing, other community rents mortgage payment needs, or replacement costs may be inadequate measures for community owners vacancies mean something

Measures Industry Lenders Push and Need to Stem Depreciation CAS – Community Attribute System Measures Industry Lenders Push and Need to Stem Depreciation CAS – Community Attribute System Invoice database, IBTS MHI database Shorter repayment term. Reduced gross profit at sale Better installation performance Better and longer home warranties * Greater resident lease protection MSRP Forming much better resale network TIPS LBP MARI Community Owners/Lenders Agreement

21 st Mortgage Programs and Comments – Tim Williams 21 st Mortgage Programs and Comments – Tim Williams

Origen Financial Programs and Comments – Jeff Mouat Origen Financial Programs and Comments – Jeff Mouat

Q&A Q&A

Company History 9/1995 - 21 st begin with 4 employees 9/1998 - Tighter underwriting Company History 9/1995 - 21 st begin with 4 employees 9/1998 - Tighter underwriting EVA 6/2000 - Buyout AHS/CMH 50% investor 12/2001 - Buy Assoc. portfolio 9/2003 - BRK buys Clayton 12/2003 - Clayton buys 21 st mortgage

Manufactured Home Lenders of the 90’s Why did they quit? Access Associates Bank. America Manufactured Home Lenders of the 90’s Why did they quit? Access Associates Bank. America Belgravia Bombardier Burgin Chase CIT • • Conseco Deutsche Dynex Greenpoint MCI Indy. Mac Southtrust United Companies

What didn’t they understand? l. Differentiation among score ranges l. Importance of Equity l. What didn’t they understand? l. Differentiation among score ranges l. Importance of Equity l. Repossession loss curve l. Significance of home location

95% LTV Repossession History Orig Yr LOA NS REPOS YR 1 YR 2 YR 95% LTV Repossession History Orig Yr LOA NS REPOS YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 1996 594 203 2 33 37 52 17 17 26 19 1997 1312 391 15 78 81 63 50 55 49 0 1998 2083 605 30 155 85 100 134 101 0 0 1999 603 110 9 16 35 31 19 0 0 0 2000 808 124 7 37 44 36 0 0 2001 1376 165 8 76 81 0 0 0 2002 1113 62 15 47 0 0 0 2003 1086 11 11 0 0 0 0 Total 8975 1671 97 442 363 282 220 173 75 19 8975 7889 6776 5400 4592 3989 1906 594 1. 08 % 5. 60 % 5. 36 % 5. 22 % 4. 79 % 4. 34 % 3. 93 % 3. 20 % 33. 5 %

95% LTV Repo Frequency by Scores Range CBSCR YR 1 YR 2 YR 3 95% LTV Repo Frequency by Scores Range CBSCR YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 835 1. 56% 7. 91% 6. 59% 8. 24% 6. 80% 5. 85% 5. 38% 3. 45% 45. 76% <600 1091 2. 11% 9. 59% 7. 00% 7. 16% 5. 60% 4. 30% 4. 61% 1. 96% 42. 33% 600 -650 2546 1. 02% 6. 46% 6. 65% 5. 57% 4. 92% 5. 31% 4. 17% 3. 08% 37. 18% 651 -700 2371 0. 93% 4. 45% 4. 43% 4. 02% 4. 55% 3. 36% 3. 59% 4. 03% 29. 37% >700 2134 0. 61% 2. 28% 2. 71% 2. 22% 2. 30% 2. 14% 1. 12% 3. 03% 16. 41% Total 8977 1. 08% 5. 60% 5. 36% 5. 22% 4. 79% 4. 34% 3. 93% 3. 20% 33. 50% 0 LOANS YR 8 Total

95% LTV Repo frequency of Loans Outstanding CBSCR YR 1 YR 2 YR 3 95% LTV Repo frequency of Loans Outstanding CBSCR YR 1 YR 2 YR 3 0 1. 59% <600 2. 15% 10. 44% 8. 08% YR 4 YR 5 YR 6 YR 7 Total 8. 55% 7. 75% 10. 34% 9. 83% 8. 60% 9. 15% 55. 80% 8. 98% 7. 98% 6. 16% 7. 39% 51. 17% 600 -650 1. 03% 6. 95% 7. 13% 6. 81% 6. 46% 7. 33% 6. 15% 41. 86% 651 -700 0. 94% 4. 79% 4. 37% 4. 84% 5. 73% 4. 60% 4. 99% 30. 25% >700 2. 44% 2. 52% 2. 60% 2. 78% 2. 75% 1. 45% 15. 15% 0. 61%

95% LTV by Score Range, Ignore prepayment 95% LTV by Score Range, Ignore prepayment

95% LTV by Score Range After Prepayment 95% LTV by Score Range After Prepayment

90% LTV Repo Frequency of Loans Outstanding CBSCR LOAN S YR 1 YR 2 90% LTV Repo Frequency of Loans Outstanding CBSCR LOAN S YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 Total 0 516 0. 59% 5. 26% 4. 85% 4. 97% 3. 69% 8. 48% 2. 85% 30. 69% <600 801 1. 14% 6. 13% 5. 43% 6. 15% 5. 83% 7. 33% 4. 95% 36. 94% 600 -650 1854 0. 87% 4. 13% 3. 80% 6. 14% 4. 87% 3. 44% 4. 46% 27. 70% 651 -700 1878 0. 48% 2. 09% 3. 17% 3. 45% 3. 37% 5. 24% 2. 63% 20. 42% >700 1956 0. 20% 1. 88% 1. 01% 1. 11% 2. 40% 2. 49% 1. 11% 10. 20%

Repossession Rate by Credit Score and Down Payment Repossession Rate by Credit Score and Down Payment

Private property loans score 600650 Private property loans score 600650

Communities loans score 600 – 650 Communities loans score 600 – 650

 Reason for poor performance Community incentives reduce equity Premature decline in housing Value Reason for poor performance Community incentives reduce equity Premature decline in housing Value determined by total housing cost – Home payment + site rent – Relative to alternatives Alternatives = Apartments, site built and other communities

Value deterioration Assume site rent at inception = $300 $35, 000 home 5% down Value deterioration Assume site rent at inception = $300 $35, 000 home 5% down = $385 Total housing payment = $685 Alternative site built @ 6% = $114, 000

Assume $100 site rent increase Home value goes down From $35000 to $25, 885 Assume $100 site rent increase Home value goes down From $35000 to $25, 885 Alternative site built increase to $131, 000

Customer Alternatives Can’t sell? Pay higher rent on home with $10, 000 less value Customer Alternatives Can’t sell? Pay higher rent on home with $10, 000 less value – Pride of ownership declines – Real depreciation becomes evident – Customers are trapped – Only exit is Repossession

Lender Solution Limit exposure to only high equity customers and best credit customers Customize Lender Solution Limit exposure to only high equity customers and best credit customers Customize plans for certain communities Differentiation among communities

2004 MHI Lender of the Year 2004 MHI Lender of the Year

Origen Financial LLC Completed $64 MM IPO in May ’ 04 Completed $150 MM Origen Financial LLC Completed $64 MM IPO in May ’ 04 Completed $150 MM 144 A equity raise and converted to a Mortgage REIT in October ’ 03; followed by an additional $10 MM private placement in Feb ’ 04 Maintained servicing portfolio of approx. $1. 3 B, while originating almost $410 MM since January Selected as 1 of 9 lenders from Fannie Mae MH Initiative Received the MHI 2004 Lender of Year Award

What We Originate Home Only (93. 64%) Land Home (6. 36%) Comparable Appraisal (16. What We Originate Home Only (93. 64%) Land Home (6. 36%) Comparable Appraisal (16. 63%) Buy For Program (6. 04%) Secondary Homes (2. 78%)

Portfolio Changes Portfolio Charact 200 199 eristics: 4 9 LTI 1. 2 1. 5 Portfolio Changes Portfolio Charact 200 199 eristics: 4 9 LTI 1. 2 1. 5 7 1 Average Term 230 331 Term < 20 Years 94 16 % % New Homes 62 89 % % Land Lease 63 25 % %

Community Approval Program Collateral Review Specialists approve where the community in which Origen borrowers Community Approval Program Collateral Review Specialists approve where the community in which Origen borrowers place their homes Pass/Fail Community Approval Program: allows homes to be financed via the advance method in the approved communities Comparable appraisals will not be allowed in pass/fail communities unless that community has also been specifically approved for the Comparable Appraisal Program

 Community Approval Program Criteria for Pass/Fail Community Approval Program: Allows homes to be Community Approval Program Criteria for Pass/Fail Community Approval Program: Allows homes to be financed via the advance method in approved communities: Ø Must have a completed Community Fact Sheet Ø Must submit a copy of lease agreement Ø Must submit a copy of community’s business license Ø Must have paved street and public access Ø Must have full-time management Ø All utilities must be publicly provided Ø Satisfactory Dun & Bradstreet report on community Ø Must have a minimum of 25 spaces Ø Community must have at least a 15 -year lease (property)

Comparable Appraisal Community Program It is necessary to finance the “location” not the “amenities” Comparable Appraisal Community Program It is necessary to finance the “location” not the “amenities” The program uses comparable appraisals to determine property values A vacancy rate less than or equal to 5% Positive resale activity Must sign MHI Community Agreement Must have on site management

Differentiation Amongst Communities Community Attribute System ØAttributes have a 1 to 5 weight Separated Differentiation Amongst Communities Community Attribute System ØAttributes have a 1 to 5 weight Separated Into Three Major Categories ØManagement/ Infrastructure/ Economic Attributes ØCommunity Features/ Amenity Attributes ØHome Activity/ Resale Market Attributes

Management/ Infrastructure/ Economic Attributes Lot Lease History Vacancy Rate Rent Control Local Attributes (schools, Management/ Infrastructure/ Economic Attributes Lot Lease History Vacancy Rate Rent Control Local Attributes (schools, shopping, location, etc…) County Unemployment Comparable Apartments

Community Features/ Amenity Attributes Community Appearance Age of Homes Types of homes Community Amenities Community Features/ Amenity Attributes Community Appearance Age of Homes Types of homes Community Amenities

Home Activity/ Resale Market Attributes Average Selling Price (new and used) Frequency of Repossessions Home Activity/ Resale Market Attributes Average Selling Price (new and used) Frequency of Repossessions Days on Market Resale Market

Top 10 - Total Score Top 10 - Total Score

Top 10 - Feasibility Top 10 - Feasibility

Top 10 – Attributes Impact Top 10 – Attributes Impact

 MHI Community Agreement between Community Owner and Lender that explains who is responsible MHI Community Agreement between Community Owner and Lender that explains who is responsible for what in the event of a repossession

 MHI Agreement Highlights Lender doesn’t pay back lot rent Lender is allowed 12 MHI Agreement Highlights Lender doesn’t pay back lot rent Lender is allowed 12 months to resale home in community without paying rent if the community has a vacancy greater than 5% Lender must bring home up to community standards within 60 days If home is to be sold wholesale, Lender shall negotiate exclusively with Community Operator for the sale of the Home for 30 days

Thank You! Thank You!