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"Wes Johnson combines personal experience with extensive research in a powerful 'must read' for anyone considering buying a manufactured home or currently living in one. The Manufactured Home Buyer's Handbook really is a wealth of information." -- Peter Tabak, Homeowners Against Deficient Dwellings Considering how interest rates are going to affect your bottom line? Financing is often the most important factor when you buy a new home, and financing for manufactured homes often differs radically from that offered for site built home sales. The Manufactured Home Buyer's Handbook covers finance options and predatory lending more thoroughly than any other guide. Here's a handy little tool that can help you, too: Find today's mortgage rates on this page!
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The Honorable Michael Chertoff Re: Manufactured Housing Contracts
Dear Secretary Chertoff, Many consumer advocacy groups and citizens are deeply concerned about FEMA's response to the Katrina disaster. I have written FEMA regarding these issues without response, and have now joined with two other organizations who are equally interested in what we consider to be a fatally flawed initial government response to the Gulf Coast evacuees housing needs. Homeowner’s Against Deficient Dwellings (HADD), the Wisconsin Manufactured Home Owner’s Association (WI-MHOA), and I would like to know what oversight Congress will have, if any, regarding the contract for 2,000 homes which FEMA has awarded to Clayton Homes of Maryville, TN, and over the additional contracts to other manufactured housing companies. We would also like to learn the specific details regarding the bidding process and home specifications. Is this a fait accompli, or is there some hope of rectifying the situation if our government learns it has, albeit with good intentions, acted with haste? In short, we believe the US government is making a terrible mistake which both the evacuees and taxpayers will pay for dearly. "No-Bid" contracts awarded without regard to housing specifications and without regard to the manufactured housing industry’s track record is virtually a guarantee of further disaster visited upon victims who have been through enough. It is also a terrible disservice to American taxpayers who can ill-afford such an ineffectual utilization of money at this time. Nancy Seats, National President of HADD, has pointed out to me a number of concerns which apply to any type of housing which might be made available to the evacuees (manufactured or site-built), and they bear repeating here:
My specific concerns regarding manufactured homes for the evacuees were addressed in an e-mail which I have sent to FEMA, and in the interest of efficiency with your permission I will repeat that material here for your benefit. Please take the time to review it. HADD officials and WI-MHOA officials have read and agree with these important concerns. Manufactured housing is especially prone to water damage – and the structural failure and illness that accompanies that problem. I know the irony and potential catastrophe of moving flood and hurricane victims en masse into such housing is not a legacy our government wants to leave. Typically, the stories of housing industry victims are silenced because whenever the industry offers a desperate victim – who have usually tied up their life savings into their defective home and signed a thirty year mortgage – some small recompense, they demand in exchange for the victim to sign an agreement releasing the manufacturer from further liability and requiring the consumer to never discuss their home problems publicly again. We doubt – and fervently hope – relocated evacuees will not be so bound in exchange for accepting their manufactured homes. The honor of a reply is requested. Our deepest appreciation for your time and consideration regarding this important matter. Yours truly, Wes Johnson, Author of The Manufactured Home Buyer’s Handbook Nancy Seats, National President of Homeowner’s Against Deficient Dwellings (HADD) Kristen Zehner, President, Wisconsin Manufactured Home Owner’s Association (WI-MHOA) enc: Original letter to FEMA cc:
1st Letter to FEMA: October 2, 2005 Nicol Andrews, Deputy Strategic Director FEMA Public Affairs
Dear Ms. Andrews, I would like to inquire about the recent bid awarded to Clayton Homes by FEMA for 2,000 single-wide manufactured homes. Specifically, I would like to know more about the bidding process (which companies were invited to bid, what the ending dates for the bids were, what the actual bid specifications were (square footage, quality specifications, etcetera), and where the various companies actually came in at in terms of time and cost. I understand the urgent needs of the evacuees, but I am concerned that FEMA is doing them a terrible injustice at taxpayer expense. This concern is especially acute in regard to Clayton Homes of Maryville, Tennessee. Frankly, FEMA is quite likely wasting hundred of millions of taxpayer money at a minimum, and making the plight of the evacuees’ even more untenable in the process. My concern comes both from personal and professional experience. I have researched manufactured housing for years, and have also bought and lived in them. I am the author of The Manufactured Home Buyer’s Handbook, 2005 (McFarland & Company, Inc.). As a result of these experiences, I have had extensive contact with both consumers and consumer advocates across the country. From this I have learned that many manufactured homes are defective from the factory – and in fact many are quickly uninhabitable. Those which are not shipped with defects are often destroyed structurally in short order due to haphazard (and lackadaisically regulated) installations. Clayton Homes seems to be an especially aggressive and egregious violator of consumer rights at every stage of the process. Is FEMA aware of the track record of these companies in general, and Clayton Homes in particular? Did you know that 4 out of 5 manufactured home owners find major problems or defects in their new homes according to multiple surveys (Consumer’s Union, Foremost Insurance, AARP)? Most have multiple problems. And while 95% of such homeowners report having a warranty, only about one-third of problems are fixed under those warranties -- the rest were either fixed at homeowner's expense or not at all (according to an AARP survey of all age groups). Do the evacuees have the kind of extra cash available to them to make needed repairs? Furthermore, did you know that most problems (two-thirds of them, in fact) are related to water damage? I’ve had one phone call after another from across the nation describing leaking roofs, water in walls, and accumulating in the "belly-boards" of these homes. Do you realize that once these homes are so saturated, it is more expensive to repair them than to replace them? Wouldn’t it be a slap in the face of the evacuees and the American taxpayer if FEMA and the US government put them in water damaged homes after what they have suffered through in New Orleans? Allow me to give you one small example among literally hundreds I personally have heard. I have recently been speaking with a young woman in Houston, TX; Clayton sold her and her two young children a home they knew had been previously water damaged (Clayton installed her exhaust vents upside down, just like they did in the homes of numerous other customers, and these backward vents funneled rainwater into her walls on the dealer's lot), but Clayton employees didn't tell her. The home was filled with mold and uninhabitable shortly after she moved in. She only asked for $7,000 and to be let out of the deal. That was what she has already spent on rent for a second residence for her and her children while she also still has to pay Clayton / Vanderbilt every month (the mortgage company which is also owned by Clayton). Clayton's response was to counter with an offer of no more than $1,500. She's considering it because she's desperate and doesn't have many alternatives. I can't really blame her if she does; if I was in her shoes I might, too. Either way, she has a tough fight on her hands to get by right now with those children. Do you know about the dozens of lawsuits currently against Clayton for essentially stealing land in Texas? (If not, you should read up on them quickly before Clayton silences the parties in the usual way on those rare occasions when plaintiffs get past the arbitration clauses – which in themselves are often forced upon consumers in a fraudulent manner – the plaintiffs will receive an award but be forced to legally bind themselves to silence about the fraud and the judgment. In 2004 alone, there were 25 lawsuits in Texas alleging that Clayton Homes, Vanderbilt Mortgage and several Clayton associates forged customer signatures on loan documents to fraudulently procure their land. The basic modus operandi seemed to be that Clayton dealerships would forge signatures to claim customers’ land (which was used as loan collateral in land-in-lieu-of transactions) when they couldn’t make their payments. The customers which are involved were not in a position to finance a home; that is, a reputable lender would not have made the loan. President and CEO Kevin Clayton seemed to admit the wrong-doing, but claimed, "This is isolated to one location in one market and we see nothing in this case that suggests otherwise." David Rumley, an attorney involved in the case, strongly disagrees, "Our investigation has shown the forgeries of deeds and trust and documents related to land has occurred in almost every state where Clayton Homes sells trailers." (Clayton Homes operates in over 33 states.) In one instance, the customer lived in a nursing home, and previously had both her arms amputated. In another, the consumer was hospitalized and was having surgery on the day she allegedly signed the documents. (Bill Brewer, August 4th, 2004, Knoxville News-Sentinel) My understanding now is that new cases have surfaced in which the signatories were actually deceased! Fraud is extremely common in this industry. Is this the kind of company FEMA wants to entrust the evacuees to? I could go on at length about the defects, the fraud, the bullying tactics, and the defective set-ups. I could tell you about the industry secret regarding roofs which the factories know are defective but ship to dealerships anyway. Roofs which are so substandard, water stands in pools on them after a rain, and the water runs down against and then into the walls (ask me about "Pagoda roofs" if you want to know more). In the name of affordable housing, these homes are shipped anyway. Why not? In most cases the inhabitants are too poor to fight, and the warranties are not honored. Quality control in these plants is a standing joke even to their own employees (I’ve come to know some of them that resent the cavalier attitude toward quality their employers take). Surely HUD, the only real oversight for the manufactured housing industry, should help out these victims. In fact, however, they very rarely do. As Consumer’s Union noted, these state administrative agencies act "more as a service agency for the industry than a protector of home buyers." And if you are wondering about the health effects of evacuees living in the mold and mildew ridden manufactured homes, you can easily research them: "The health effects from biological contaminants like mold are serious. Such pollutants may initiate allergic reactions, including hypersensitivity pneumonitis, allergic rhinitis, and asthma. . . . Mold and mildews also release disease causing toxins. The EPA lists some possible symptoms of biological contaminants as: sneezing, watery eyes, coughing, shortness of breath, dizziness, lethargy, fever, and digestive problems." (The Manufactured Home Buyer’s Handbook, 2005) Chronic illnesses may develop; the young and the old could die as a result. I understand FEMA’s desire to help the evacuees, but I do question your method and the thought (or lack thereof) that the US Government has put into this. Affordable housing is not as simple a concept as the manufactured housing industry would have us believe. A defective and unsafe home is not "affordable" at any price. What is the cost of just one child whose quality of life is destroyed by hidden mold? My own home, a $97,000 2003 Clayton which was supposed to be a "top of the line" model, was so damaged on arrival that we had to have it replaced. The replacement home – also defective -- will cost more to repair than we initially paid for it! The sad truth is that this scenario is common as opposed to being the rare exception. The story of my wife and myself is briefly described at http://www.manufacturedhomebuyers.com/clayton%20ordeal.htm, and illustrates many of the problems consumers face when they are bargaining for their own manufactured home – much less when a government bureaucrat assigns them one. Unfortunately, we have discovered even more disastrous problems since this text was written! I’d also recommend you look at other internet resources such as The American Internet Society of Manufactured Home Owners for an excellent overview of many issues those consumers living in manufactured housing face (http://www.taismho.com/). The decision to award these contracts to the manufactured housing industry may be a financial and societal disaster, and is that something that FEMA is willing to risk in the current climate? Is that something you want the evacuees to risk? Did FEMA at least mandate some structural minimums for these people’s new homes, or are you accepting whatever the industry gives you? You may be taking the evacuees out of the frying pan and placing them directly into the fire. If this does result in further disaster, and statistics and history make it plain you’re taking a huge risk on behalf of these victims and taxpayers who ultimately are footing the bill, there will be a host of media eager to cover the story. Out of those 2,000 homes, you can expect serious problems in at least 1,600 of them – is that a gamble that makes any sense? Please contact me with answers to my questions (as listed in the first paragraph) and my other concerns . . . Did FEMA perform any research before this course of action was chosen? Were alternatives considered? Thank you very much for your time and consideration. I look forward to hearing your response. Yours truly, Wes Johnson
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