Date: 2015-04-14
Speaker: MAXINE WATERS (democrat)
Chamber: H
State: California

The investigation found that Clayton locked one disabled veteran in Tennessee. Dorothy Mansfield. into an expensive loan even though the required monthly payment would leave her only $27 to cover the rest of her living costs. Other borrowers were quoted inexpensive loan terms only to see interest and fees skyrocket once they had put down a nonrefundable depositor paid out large amounts of money to prepare their land for installation of the home. Just like subprime borrowers in the financial crisis. many looking to purchase manufactured housing were convinced to take out highcost loans because they were sold false promises that they would be able to refinance to lower rates in the future. Former Clayton salespeople have blown the whistle. They are coming forward. and they are talking. They have attested that they have pressured consumers to use Claytonaffiliated financing even if it wasnt the best deal. and some even received kickbacks for putting customers into more expensive loans. If enacted. H.R. 650 would allow abusive lenders to charge up to nearly 14 percent interest before consumer protections are triggered. more than four times what the average borrower is paying on a home loan. There is not one Member of Congress who would pay or is paying 14 percent interest. 12. 13. 11 percent interest. This is outrageous. In the coming years. this number could very well grow to 16 percent. 17 percent. and likely 18 percent as interest rates rise back to normal. Even worse. the bill would also make it legal for Clayton sales personnel to steer borrowers toward highcost loansloans from other parts of the Clayton conglomeratethat are not in their interesta practice we banned for all loan originators after the financial crisis. Mr. Speaker. when it comes to manufactured housing. consumers are already exposed to significant risk: high interest rates. the inability to refinance. and in many cases. depreciation that starts as soon as the manufactured home is sold. Today. we consider a measure that would even further roll back key protections. This measure would do away with a number of protections current law affords to many highcost loans such as stiffer penalties for bad actor lenders. additional disclosures for investors and consumers who purchase highcost mortgages. mandatory counseling so borrowers would know what they are getting into. and even the ability of borrowers to have their loan rescinded if lenders dont follow the law. They would lose all of these protections. As the Consumer Financial Protection Bureau noted in their study of the manufactured housing industry. the individuals who apply for loans for manufactured housing "include consumers that may be considered more financially vulnerable and. thus. may particularly stand to benefit from strong consumer protections." And now. in addition to the CFPBs report. we have investigative reporting that puts names. faces. and individual stories of woe to the CFPBs description of market practices and policy failures. Finally. the Obama administration has said that they "strongly oppose" this bill because it would "put lowest income and economically vulnerable consumers at significant risk of being subjected to predatory lending and being steered into more expensive loans even when they qualify for lower cost alternatives." Rolling back consumer protections amidst evidence that the manufactured housing industry needs more oversight is a dangerous giveaway to a sector that already profits handsomely at the expense of vulnerable borrowers. Mr. Speaker and Members. I would urge my colleagues to oppose this legislation. I reserve the balance of my time.