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What's it worth? Murky
pricing hurts consumers January
2005 Executive
Summary Sidebars: Director Author Editor For
more information, contact: Kevin
Jewell, Rafael
Ayuso, Click here to find out more about manufactured housing.
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The late 90's boom in the manufactured housing business in the United States wasn't the first of its kind. The early 70's and mid 80's saw a similar run up followed by bust in manufactured housing. And like the 2000 bust, it wasn't just the financial markets that suffered, it was also the families who lost their homes in the financial fallout. The early 70's boom and bust cycle had many of the same characteristics of the late 90's. In 1979, an op-ed in the American Banker reported Up through 1973, the mobile home industry was going great guns…. One reason for this boom was that lenders were willing to make high-interest loans to less than credit-worthy customers. But in 1974, economic recession led to a depression in the housing industry, particularly mobile homes…. Financing dried up, and mobile home sales slumped so low some thought they would never recover. but the op-ed reported that industry had learned from its mistakes and straightened itself out. The recession also forced manufacturers, dealers, and lending institutions to make wholesale reassessments of the way things were previously done. Belts were tightened, credit was controlled, operations were upgraded. The manufactured housing industry pulled out of its doldrums.1 Just as in the 70's, the industry now claims to have fixed itself thru better sales practices. But in the late nineties, when the marketplace was in full boom, lenders and dealers who wanted to get the best deal for their customers couldn't compete with competitors offering easy-in deals (which had hidden terms structured to strip equity from consumers), and had to drop to the lowest common denominator to compete. Without fundamental enforceable reform, we will likely see history repeat itself when the next economic cycle increases competition for market share. 1 Leichey, David "Backward Attitudes Towards Mobile Home Financing Persist," American Banker, 10/16/1976. |
 Consumers Union Offices: Communications Office, New York - Washington Office West Coast Office - Southwest Office - Consumer Policy Institute
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Deja-vu
all over again