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What Is HR 1779 And What Does It Do?

Most anyone in or considering the Mobile Home Park Industry has heard of HR 1779. While people may have heard the name there is some confusion on what it is and more importantly what it would do if passed into law.

To understand HR 1779, you must be familiar with the SAFE Act. SAFE was designed to enhance consumer protection and reduce fraud. While it sounds all well and good, it has created major headache for Mobile Home Park owners. It allowed the chattel financing of manufactured homes to be reclassified and treated like a mortgage financing. This means all non-depository lenders in our industry has to license their employees as MLOs(Mortgage Loan Originator). Besides SAFE, the Dodd-Frank Act, changes the existing regulatory structure and enhances supervision, in their words, "To protect the economy". The biggest change brought about by Dodd-Frank is the formation of the Consumer Financial Protection Bureau, designed specifically to police and oversee the provisions of the Act and any existing federal laws on lending. Basically SAFE was brought about to regulate and clean up the mess brought about by the Mortgage crisis.

HR 1779 was shown to the House of Representatives in April of this year. It is also known as Preserving Access to Manufactured Housing Act of 2013. HR 1779, "Amends the Dodd-Frank Wall Street Reform and Consumer Protection Act, to revise the exclusion from the meaning of "mortgage originator" of an employee of a retailer of manufactured homes, who does not for compensation or gain take residential mortgage loan applications, for compensation or gain offer or negotiate terms of a residential mortgage loan, or advise a consumer on loan terms (including rates, fees, and other costs)". Essentially it is removing the need to become a licensed MLO, by allowing chattel financing and removing the reclassification to mortgage financing.

HR 1779 is not guaranteed to pass; official prognostication says it has a 4% chance of being enacted into law. The prognosis of the bill is based on the amount of bills that pass the committee, as well as certain factors to the specific bill. The manufactured housing industry needs this bill to pass, and it'd be a plus to finally ditch the headache accompanied with SAFE.

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