Forward-Looking Statements
−Removed: This Annual Report on Form 10-K (this “Form 10-K”) contains forward-looking statements.
+Added: This Annual Report on Form 10-K (this “Form 10-K”) contains forward-looking statements.
Forward-looking statements are predictions based on expectations and projections about future events, and are not statements of historical fact.
Forward-looking statements include statements concerning business strategy, among other things, including anticipated trends and developments in and management plans for our business and the markets in which we operate.
−Removed: In some cases, you can identify these statements by forward-looking words, such as “estimate,”
−Removed: “expect,”
−Removed: “anticipate,”
−Removed: “project,”
−Removed: “plan,”
−Removed: “intend,”
−Removed: “believe,”
−Removed: “forecast,”
−Removed: “foresee,”
−Removed: “likely,”
−Removed: “may,”
−Removed: “should,”
−Removed: “goal,”
−Removed: “target,”
−Removed: “might,”
−Removed: “will,”
−Removed: "would," "can," “could,”
−Removed: “predict,”
−Removed: and “continue,”
−Removed: the negative or plural of these words and other comparable terminology.
+Added: In some cases, you can identify these statements by forward-looking words, such as “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “believe,” “forecast,” “foresee,” “likely,” “may,” “should,” “goal,” “target,” “might,” “will,” "would,"
+Added: "can,"
+Added: “could,” “predict,” and “continue,” the negative or plural of these words and other comparable terminology.
All forward-looking statements included in this Form 10-K are based upon information available to us as of the filing date of this Form 10-K, and we undertake no obligation to update any of these forward-looking statements for any reason.
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The forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied by these statements.
−Removed: These factors include the matters discussed under “Risk Factors”
−Removed: in our Registration Statement on Form S-1 and those described elsewhere in this Form 10-K and from time to time in future reports that we file with the Securities and Exchange Commission.
+Added: These factors include the matters discussed under “Risk Factors” in our Registration Statement on Form S-1 and those described elsewhere in this Form 10-K and from time to time in future reports that we file with the Securities and Exchange Commission.
You should carefully consider the risks and uncertainties described in this Form 10-K.
−Removed: In this Form 10-K, unless otherwise indicated or the context otherwise requires, “Legacy,”
−Removed: “the Company,”
−Removed: “we,”
−Removed: “us”
−Removed: or “our”
−Removed: refers to Legacy Housing Corporation, a Texas corporation.
−Removed: We build, sell and finance manufactured homes and “tiny houses”
−Removed: that are distributed through a network of independent retailers and company‑owned stores and also sold directly to manufactured home communities.
+Added: In this Form 10-K, unless otherwise indicated or the context otherwise requires, “Legacy,” “the Company,” “we,” “us” or “our” refers to Legacy Housing Corporation, a Texas corporation.
+Added: We build, sell and finance manufactured homes and “tiny houses” that are distributed through a network of independent retailers and company-owned stores and also sold directly to manufactured home communities.
The company was founded in 2005 as a Texas limited partnership named Legacy Housing, Ltd.
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Our corporate office is located in Bedford, Texas (between Dallas and Fort Worth).
−Removed: We completed our initial public offering (the “IPO”) in December 2018 and our common stock trades on The NASDAQ Global Market under the symbol “LEGH.”
−Removed: We are the fourth largest producer of manufactured homes in the United States as ranked by number of homes manufactured based on information available from the Manufactured Housing Institute and IBTS for 2019.
+Added: We completed our initial public offering (the “IPO”) in December 2018 and our common stock trades on The NASDAQ Global Market under the symbol “LEGH.”
+Added: We are the fourth largest producer of manufactured homes in the United States as ranked by number of homes manufactured based on information available from the Manufactured Housing Institute and IBTS for the twelve month period ending September 30, 2020.
With current operations focused primarily in the southern United States, we offer our customers an array of quality homes ranging in size from approximately 390 to 2,667 square feet consisting of 1 to 5 bedrooms, with 1 to 3 1 / 2 bathrooms.
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one of our three manufacturing facilities in accordance with the construction and safety standards of the U.S.
−Removed: Department of Housing and Urban Development (“HUD”).
+Added: Department of Housing and Urban Development (“HUD”).
Our factories employ high-volume production techniques that allow us to produce approximately 75 home sections, or approximately 62 fully-completed homes on average depending on product mix, in total per week.
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Each home can be configured according to a variety of floor plans and equipped with such features as fireplaces, central air conditioning and state-of-the-art kitchens.
−Removed: Our homes are marketed under our premier “Legacy”
−Removed: brand name and, as of December 31, 2019, are sold to consumers, primarily across 15 states through a network of 90 independent retail locations, 13 company‑owned retail locations and through direct sales to owners of manufactured home communities.
+Added: Our homes are marketed under our premier “Legacy” brand name and, as of December 31, 2020, are sold to consumers, primarily across 15 states through a network of 100 independent retail locations, 13 company-owned retail locations and through direct sales to owners of manufactured home communities.
Our 13 company-owned retail locations, including 11 Heritage Housing stores and two Tiny House Outlet stores, exclusively sell our homes.
+Added: During 2020, approximately 46% of our manufactured homes were sold in Texas, followed by 8% in Georgia, 8% in Michigan, 5% in Kansas, and 5% in North Carolina.
During 2019, approximately 48% of our manufactured homes were sold in Texas, followed by 8% in Georgia, 6% in Kansas, 5% in Florida and 5% in Oklahoma.
−Removed: During 2018, approximately 56% of our manufactured homes were sold in Texas, followed by 13% in Georgia, 11% in Louisiana and 4% in Oklahoma.
We plan to deepen our distribution channel by using cash from operations and borrowings from our lines of credit to expand our company-owned retail locations in new and existing markets.
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Census Bureau, the Institute for Building Technology and Safety, and the Manufactured Housing Institute.
−Removed: Additionally, innovative engineering and design, as well as efficient production techniques, including the advent and development of the “tiny house”
−Removed: market, continue to position manufactured homes as a viable housing alternative.
+Added: Additionally, innovative engineering and design, as well as efficient production techniques, including the advent and development of the “tiny house” market, continue to position manufactured homes as a viable housing alternative.
Demand for high-quality affordable housing below $150,000 has also been driven by increasing rental rates for housing, higher prices for site-built homes, decreasing percentages of home ownership among portions of the U.S.
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In 2017, the manufactured housing industry shipped 92,891 manufactured homes according to data published by the U.S.
−Removed: Census Bureau, the Institute for Building Technology and Safety (“IBTS”) and the Manufactured Housing Institute (“MHI”).
+Added: Census Bureau, the Institute for Building Technology and Safety (“IBTS”) and the Manufactured Housing Institute (“MHI”).
Total annualized manufactured home shipments in 2018 increased to approximately 96,500.
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We utilize local market research to design homes that meet the specific needs of our customers and offer a variety of structural and decorative customization options, including, among others, fireplaces, central air conditioning, overhead heat ducts, stipple-textured ceilings, decorative woodgrain vinyl floors, wood cabinetry and energy conservation elements.
−Removed: Additionally, our homes have vaulted ceilings in every room, have numerous proprietary advantages such as our copyrighted “furniture friendly”
−Removed: floor plans and, in most cases, are wider, have taller ceilings and a steeper roof pitch than our competitors’
+Added: Additionally, our homes have vaulted ceilings in every room, have numerous proprietary advantages such as our copyrighted “furniture friendly” floor plans and, in most cases, are wider, have taller ceilings and a steeper roof pitch than our competitors’ products.
Taken together, we believe our ability to offer our customers a range of home sizes and styles, as well as sophisticated design and customization, allows us to accommodate virtually all reasonable customer requests.
−Removed: Our vertical integration allows us the ability to respond quickly to our customers’
−Removed: needs and modify designs during the construction process.
+Added: Our vertical integration allows us the ability to respond quickly to our customers’ needs and modify designs during the construction process.
● Manufacturing Facilities Strategically Located Near Customers in Key Markets.
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We develop and maintain the resources necessary to build custom homes efficiently that incorporate unique and varied customer-requested features.
−Removed: We are constantly seeking ways in which to directly source materials to be used in the manufacturing process, which allows us to ensure the materials are of high‑quality and can be customized to meet our customers’
+Added: We are constantly seeking ways in which to directly source materials to be used in the manufacturing process, which allows us to ensure the materials are of high-quality and can be customized to meet our customers’ needs.
Customization enables us to attract additional retailers and consumers who seek individualized homes that are assembled on a factory production line.
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We also provide consumer financing for our products sold to end-users through both independent and our company-owned retail locations, and we provide financing to community owners that buy our products for use in their rental housing communities.
−Removed: Our company has been providing floor plan financing to our independent retailers since our formation and we now have more than 70 independent retailers using our consignment solution.
+Added: Our company has been providing floor plan financing to our independent retailers since our formation and we now have 100 independent retailers using our consignment solution.
We now have more than 3,200 customers that purchased their homes utilizing our retail financing solutions.
−Removed: The average interest rates of our retail financing loans were approximately 14.0% at December 31, 2019 and 2018, respectively.
+Added: The average interest rates of our retail financing loans were approximately 13.8% and 14.0% at December 31, 2020 and 2019, respectively.
The repossession rates for our retail financing loans, measured by units, was approximately 2.9% and 3.1% for 2020 and 2019, respectively.
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These financing solutions are structured to give us an attractive return on investment, when coupled with the gross margin we realize on products specifically targeted for these new manufactured housing communities.
−Removed: Strong Alignment of Interests through Co‑Founders’
+Added: ● Strong Alignment of Interests through Co-Founders’ Ownership.
We believe that a strong alignment of interests with stockholders and investors exists through the ownership of a significant percentage of our outstanding shares by our co-founders, Curtis D.
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By providing structural and economic alignment with the performance of our company, Messrs.
−Removed: Hodgson’s and Shipley’s continuing controlling interests are directly aligned with those of our investors.
+Added: Hodgson’s and Shipley’s continuing controlling interests are directly aligned with those of our investors.
We believe the combination of these characteristics has promoted long-term planning, an enhanced culture among our customers, strategic partners and employees, and ultimately the creation of value for our investors.
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During the years ended December 31, 2020 and 2019, we financed approximately 62% and 60% of the homes we sold to consumers, respectively.
−Removed: We intend to expand financing solutions to manufactured housing community‑owner customers, in a manner than includes developing new sites for products in or near urban locations where there is a shortage of sites to place our products.
+Added: We intend to expand financing solutions to manufactured housing community-owner customers, in a manner that includes developing new sites for products in or near urban locations where there is a shortage of sites to place our products.
● Continue to Focus on Innovation and Customization for Core Customer Groups.
Our production strategy is focused on continually developing the resources necessary to efficiently build homes that incorporate unique, varied and innovative customer preferences.
−Removed: We are constantly seeking ways to directly source materials to be used in the manufacturing process, which allows us to ensure we have quality materials that can be customized to meet our customers’
+Added: We are constantly seeking ways to directly source materials to be used in the manufacturing process, which allows us to ensure we have quality materials that can be customized to meet our customers’ needs.
Our principal focus is on designing and building highly functional and durable products that appeal to families of all sizes.
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In November 2018, we acquired approximately 69 acres of raw land located near Adkins, Texas for $0.8 million.
−Removed: We are in the process of securing the required approvals to develop
−Removed: manufactured housing communities on the land.
−Removed: We expect to begin development of the communities in 2020.
−Removed: We will continue to evaluate opportunities to develop, or to provide financing to third party developers of, additional manufactured housing communities in order to provide locations for manufactured homes for our customers.
−Removed: We are the fourth largest producer of manufactured homes in the United States as ranked by the number of homes manufactured based on information available from the Manufactured Housing Institute and IBTS for 2019.
+Added: In July and August 2019, we acquired approximately 140 acres of raw land
+Added: in Johnson County, Texas for $0.9 million.
+Added: In September 2020, we acquired approximately 80 acres of raw land in Wise County, Texas for $0.9 million.
+Added: We have secured a permit for a wastewater plant for the land in Bastrop County and we intend to begin construction in 2021.
+Added: Upon completion, the wastewater plant can serve 1,075 home sites.
+Added: We will continue to evaluate opportunities to develop the remaining land, or to provide financing to third party developers of, additional manufactured housing communities in order to provide locations for manufactured homes for our customers.
+Added: We are the fourth largest producer of manufactured homes in the United States as ranked by number of homes manufactured based on information available from the Manufactured Housing Institute and IBTS for the twelve month period ending September 30, 2020.
We produce a wide variety of homes that can be used by our customers in a number of ways.
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We utilize local market research to design homes that meet the specific requirements of our customers and our homes are designed after extensive field research and consumer feedback.
−Removed: We frequently introduce new floor plans, decor, exterior design, features and accessories to appeal to changing consumer trends and we offer an assortment of customizations to match each customer’s individual tastes.
+Added: We frequently introduce new floor plans, decor, exterior design, features and accessories to appeal to changing consumer trends and we offer an assortment of customizations to match each customer’s individual tastes.
Each home typically contains a living room, dining area, kitchen, 1 to 5 bedrooms and 1 to 3 1 / 2 bathrooms, and each home can be customized to include certain features including, among others, fireplaces, central air conditioning, overhead heat ducts, stipple-textured ceilings, decorative wood grain vinyl floors, wood cabinetry and energy conservation elements.
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Raw Materials and Suppliers.
−Removed: The principal materials used in the production of our manufactured homes include wood, wood products, steel, aluminum, gypsum wallboard, windows, doors, fiberglass insulation, carpet, vinyl, fasteners, plumbing materials, appliances and electrical items.
+Added: The principal materials used in the production of our manufactured homes include wood, wood products, steel, aluminum, gypsum wallboard, windows, doors, fiberglass insulation, carpet, vinyl,
+Added: fasteners, plumbing materials, appliances and electrical items.
We currently buy these materials from various third-party manufacturers and distributors.
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We intend to continue seeking greater direct sourcing of materials from original manufacturers.
−Removed: will allow us to save costs, gain greater control over the quality of the materials we use in our products and increase customization to meet our customers’
−Removed: changing preferences.
+Added: This will allow us to save costs, gain greater control over the quality of the materials we use in our products and increase customization to meet our customers’ changing preferences.
The inability to obtain any materials used in the production of our homes, whether resulting from material shortages, limitation of supplier facilities or other events affecting production of component parts, may affect our ability to meet or maintain production requirements.
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Below is a list of the states in which we sold most of our manufactured homes and the approximate percentage of those sales to our total product sales:
−Removed: * - represents less than 1% of Total Net Sales
−Removed: In 2019 and 2018, we also sold homes in Alabama, Arkansas, Colorado, Illinois, Indiana, Kentucky, Michigan, Mississippi, Missouri, North Carolina, New Mexico, Ohio, Pennsylvania, South Carolina, Tennessee, Wisconsin and West Virginia.
+Added: North Carolina
+Added: In 2020 and 2019, we also sold homes in Alabama, Arkansas, Arizona, Colorado, Iowa, Illinois, Indiana, Kentucky, Minnesota, Mississippi, Missouri, Nebraska, New Mexico, Ohio, Pennsylvania, South Carolina, Tennessee, Wisconsin and Virginia.
We continually seek to increase our wholesale shipments by growing sales at our existing independent retailers and by finding new independent retailers to sell our homes.
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Payment is due from the third-party lender upon shipment of the product to the retailer and, depending on the terms of each arrangement, we may or may not have limited repurchase obligations associated with this inventory.
−Removed: The maximum amount of our contingent obligations under such repurchase
−Removed: agreements was approximately $260,000 and $2,186,000 as of December 31, 2019 and 2018, respectively, without reduction for the resale value of the homes.
+Added: The maximum amount of our contingent obligations under such repurchase agreements was approximately $140,000 and $260,000 as of December 31, 2020 and 2019, respectively, without reduction for the resale value of the homes.
Approximately 39% of our 2020 product sales were attributable to our independent retail distributors, 12% to our company-owned retail locations and 49% directly to owners of manufactured housing communities.
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During the year ended December 31, 2020, one customer accounted for 29% of our net sales and no other customer accounted for more than 10% of our net sales.
−Removed: During the year ended December 31, 2018, no single customer accounted for more than 10% of our net sales.
+Added: During the year ended December 31, 2019, one customer accounted for 28% of our net sales and no other customer accounted for more than 10% of our net sales.
Financing Solutions for Our Customers
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MHP Community Financing
−Removed: Typically prime rate + 4.0% with 8% floor
+Added: 7.5% average contractual rate
We also offer inventory floor plan financing to retailers that takes the form of a consignment arrangement.
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Upon sale, the independent retailer is obligated to pay us the invoice amount, less any prepaid reductions, prior to moving the home away from their retail location.
−Removed: If they provide certain documentation to us, we allow them to move the home to their customer’s location and we notify the customer’s lending source to pay us the amount due upon funding of the loan.
+Added: If they provide certain documentation to us, we allow them to move the home to their customer’s location and we notify the customer’s lending source to pay us the amount due upon funding of the loan.
We have proprietary technology that we install in many consigned homes that gives us the ability to determine if a consigned home has been moved from the retail location without permission.
−Removed: The independent dealer is free to terminate the consignment agreement by giving us 90‑days’
−Removed: advance notice if it is current on all its obligations to us.
+Added: The independent dealer is free to terminate the consignment agreement by giving us 90-days’ advance notice if it is current on all its obligations to us.
Our wholesale consignment contracts allow us to defer income recognition until we are paid in full.
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There are three basic types of consumer financing in the factory-built housing industry:
−Removed: (i) chattel or personal property loans, for purchasers of a home without any underlying land involved (generally HUD code homes), (ii) non‑conforming mortgages for purchasers of a home and the land on which the home is placed, and (iii) conforming mortgage loans which comply with the requirements of the Federal Housing Administration (“FHA”), Veterans Affairs or GSE loans.
+Added: (i) chattel or personal property loans, for purchasers of a home without any underlying land involved (generally HUD code homes), (ii) non-conforming mortgages for purchasers of a home and the land on which the home is placed, and (iii) conforming mortgage loans which comply with the requirements of the Federal Housing Administration (“FHA”), Veterans Affairs or GSE loans.
At the present time, we currently offer only chattel loans.
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We provide retail consumer financing to consumers who purchase our full-size manufactured homes and tiny houses and dealer incentive arrangements to encourage independent retailers to use our financing product.
−Removed: Under these arrangements, once a customer executes a home purchase agreement with Legacy financing, we pay to the retailer 80% of the retailer’s gross margin through these consignment arrangements and we retain 20% of the retail gross margins in the consignment portfolio.
+Added: Under these arrangements, once a customer executes a home purchase agreement with Legacy financing, we pay to the retailer 80% of the retailer’s gross margin through these consignment arrangements and we retain 20% of the retail gross margins in the consignment portfolio.
We transfer the consigned value of the home to the consignment portfolio as our contribution to the consignment arrangement.
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Our average remaining term on these loans as of December 31, 2020 was 149 months and the average percentage rate (APR) of interest was 13.8%.
−Removed: Our average loan‑to‑value (“LTV”) at the time of loan origination, which is based on the gross sales price to the borrower, was 83% for the consumer financing portfolio as of December 31, 2019.
+Added: Our average loan-to-value (“LTV”) at the time of loan origination, which is based on the gross sales price to the borrower, was 84% for the consumer financing portfolio as of December 31, 2020.
We have not financed, and have no current plans to finance, new homes manufactured by our competitors in the ordinary course of our business.
All loan applications go through an underwriting process conducted at our corporate headquarters to evaluate credit risk that takes into account numerous factors including the down payment, FICO score, monthly income, and total housing payment coverage of the borrower.
−Removed: The interest rates on approved loans are determined by a buyer’s credit score and down payment amount.
+Added: The interest rates on approved loans are determined by a buyer’s credit score and down payment amount.
We use payment history to monitor the credit quality of the consumer loans on an ongoing basis.
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We provide financing to owners of manufactured housing communities for our products that they buy in order to rent to their residents.
−Removed: These loans generally have a ten‑year term and bear interest at the prime rate plus 4%, with a floor and a ceiling.
+Added: These loans generally have a ten-year term and can have a fixed or variable interest rate.
+Added: Approximately 80% of the these loans have a fixed interest rate ranging from 5.0% to 17.5%.
+Added: The remaining loans bear interest at the prime rate plus 4%, with a floor and a ceiling.
Down payments, delivery expenses and installation expenses are negotiated on a case-by-case basis.
As of December 31, 2020 and 2019, loans outstanding from manufactured home communities totaled $136,340,000 and $92,344,000, which comprised 589 and 405 loans, respectively.
−Removed: Our average remaining term on these loans as of December 31, 2019 and 2018 was approximately seven years.
+Added: Our average remaining term on these loans as of December 31, 2020 and 2019 was approximately six years.
We also make loans to community owners for the purpose of acquiring or developing properties and, as part of the arrangement, these community owners contract to buy homes from us.
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For the past 16 years, the industry has experienced a trend towards consolidation and, as a result, the bulk of the market share is controlled by a small number of companies.
−Removed: We are the country’s fourth
+Added: We are the country’s fourth
largest producer of manufactured homes.
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HUD regulates the allowable concentrations of formaldehyde in certain products used in manufactured homes and requires manufacturers to warn purchasers as to formaldehyde-associated risks.
−Removed: The Environmental Protection Agency (“EPA”) and other governmental agencies have in the past evaluated the effects of formaldehyde.
+Added: The Environmental Protection Agency (“EPA”) and other governmental agencies have in the past evaluated the effects of formaldehyde.
We use materials in our manufactured homes that meet HUD standards for formaldehyde emissions and believe we comply with HUD and other applicable government regulations in this regard.
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The Real Estate Settlement Procedures Act and Regulation X promulgated under that act require certain disclosures regarding the nature and costs of real estate settlements.
−Removed: The Federal Trade Commission has adopted or proposed various Trade Regulation Rules dealing with unfair credit and collection practices and the preservation of consumers’
−Removed: claims and defenses.
+Added: The Federal Trade Commission has adopted or proposed various Trade Regulation Rules dealing with unfair credit and collection practices and the preservation of consumers’ claims and defenses.
Installment sales contracts, direct loans and mortgage loans eligible for inclusion in a Ginnie Mae program are subject to the credit underwriting requirements of the FHA.
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Recent FHA guidelines provide Ginnie Mae the ability to securitize manufactured home FHA Title I loans to allow lenders to obtain new capital, which can then be used to fund new loans for our customers.
−Removed: The Secure and Fair Enforcement for Mortgage Licensing Act established requirements for the licensing and registration of all individuals that are Mortgage Loan Originators (“MLOs”).
+Added: The Secure and Fair Enforcement for Mortgage Licensing Act established requirements for the licensing and registration of all individuals that are Mortgage Loan Originators (“MLOs”).
Traditionally, manufactured housing retailers have assisted home buyers with securing financing for the purchase of homes, including negotiating rates and the terms for their loans.
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Regulation C of the Home Mortgage Disclosure Act, among other things, requires certain financial institutions, including non-depository institutions, to collect, record, report and disclose information about their mortgage lending activity, which is used to identify potential discriminatory lending patterns and enforce anti-discrimination statutes.
−Removed: The Dodd‑Frank Wall Street Reform and Consumer Protection Act was passed into law and established the Consumer Financial Protection Bureau (“CFPB”) regulates consumer financial products and services.
+Added: The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed into law and established the Consumer Financial Protection Bureau (“CFPB”) regulates consumer financial products and services.
Certain CFPB mortgage finance rules apply to consumer credit transactions secured by a dwelling, including real property mortgages and chattel loans secured by manufactured homes.
−Removed: These rules, among other things, define standards for origination of “Qualified Mortgages,”
−Removed: establish specific requirements for lenders to prove borrowers’
−Removed: ability to repay, outline conditions under which Qualified Mortgages are subject to safe harbor limitations on liability to borrowers and establish interest rates and other cost parameters for determining which Qualified Mortgages fall under safe harbor protection.
+Added: These rules, among other things, define standards for origination of “Qualified Mortgages,” establish specific requirements for lenders to prove borrowers’ ability to repay, outline conditions under which Qualified Mortgages are subject to safe harbor limitations on liability to borrowers and establish interest rates and other cost parameters for determining which Qualified Mortgages fall under safe harbor protection.
While many manufactured homes are financed with agency-conforming mortgages in which the ability to repay is verified, and interest rates and other costs are within the safe harbor limits, a significant amount of loans to finance the purchase of manufactured homes, particularly chattel loans and non-conforming land-home loans, fall outside such safe harbors.
−Removed: Additionally, the CFPB rules, among other things, amended the Truth‑in‑Lending Act and the Real Estate Settlement Procedures Act by expanding the types of mortgage loans that are subject to the protections of the Home Ownership and Equity Protections Act of 1994 (“HOEPA”) and imposing additional restrictions on mortgages that are covered by HOEPA.
+Added: Additionally, the CFPB rules, among other things, amended the Truth-in-Lending Act and the Real Estate Settlement Procedures Act by expanding the types of mortgage loans that are subject to the protections of the Home Ownership and Equity Protections Act of 1994 (“HOEPA”) and imposing additional restrictions on mortgages that are covered by HOEPA.
As a result, certain manufactured home loans are now subject to HOEPA limits on interest rates and fees.
−Removed: Loans with rates or fees in excess of the limits are deemed “High Cost Mortgages”
−Removed: and provide additional protections for borrowers, including with respect to determining the value of the home.
+Added: Loans with rates or fees in excess of the limits are deemed “High Cost Mortgages” and provide additional protections for borrowers, including with respect to determining the value of the home.
Most loans for the purchase of
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Among other things, the rules require creditors to provide copies of appraisal reports to borrowers prior to loan closing.
−Removed: Compliance with the regulations may constrain lenders’
−Removed: ability to profitably price certain loans or may cause lenders to incur additional costs to implement new processes, procedures, controls and infrastructure and may cause some lenders to curtail underwriting certain loans altogether.
+Added: Compliance with the regulations may constrain lenders’ ability to profitably price certain loans or may cause lenders to incur additional costs to implement new processes, procedures, controls and infrastructure and may cause some lenders to curtail underwriting certain loans altogether.
Furthermore, some investors may be reluctant to participate in owning such loans because of the uncertainty of potential litigation and other costs.
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Failure to comply with these regulations, changes in these or other regulations, or the imposition of additional regulations, could affect our earnings, limit our access to capital and have a material adverse effect on our business and results of operations.
−Removed: On May 24, 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (“Dodd‑Frank Reform Act”) was signed into law.
−Removed: The Dodd‑Frank Reform Act revises portions of the Dodd‑Frank Act, reduces the regulatory burden on smaller financial institutions, including eliminating provisions of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”), and protects consumer access to credit.
+Added: On May 24, 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (“Dodd-Frank Reform Act”) was signed into law.
+Added: The Dodd-Frank Reform Act revises portions of the Dodd-Frank Act, reduces the regulatory burden on smaller financial institutions, including eliminating provisions of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”), and protects consumer access to credit.
With the elimination of certain provisions of the SAFE Act, manufactured housing retailers can now assist home buyers with securing financing for the purchase of homes;
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.