Bill favoring manufactured home industry
to reverse consumer gains of 2001

SB 521 would allow high-cost "chattel" loans in lieu of conventional loans

AUSTIN, TX -- Legislation filed today by Sen. Todd Staples, D-Palestine, would set back the clock on consumer protection gains made in 2001 for manufactured home owners in Texas when the law was changed to bring manufactured housing loans in line with conventional housing loans, according to Consumers Union.

Consumers who get conventional real estate loans save money and enjoy added protections. SB 521, however, would by default treat the sale of manufactured homes as personal rather than real property. The bill only affects manufactured homes that are not placed in rental parks.

"The industry claims their real intent is consumer choice, but in reality this would be the myth of choice," said Kevin Jewell, policy associate with the Southwest Regional Office of Consumers Union, publisher of Consumer Reports. "Personal property loans lack important consumer safeguards, and re-opening this market will return manufactured housing finance to the failures of the past. It's time for manufactured homes move on from lending products designed for cars and join the conventional housing market."

Another objectionable provision in SB 521 is that it allows employers to be released from responsibility for the actions of licensed employees. Considering that manufactured home sales staff is known for its high turnover, the provision could allow abusive practices to remain unchecked.

"Consumers will have no one to turn to when they come back to collect on sales promises and find that the sales person is gone," Jewell said.

Consumers Union believes all purchases of land and home should remain real property purchases. Chattel loans should not be used for housing except under very limited and clearly defined circumstances. Recent commentary from Consumers Union on this subject can be found online at: http://www.consumersunion.org/consumeronline/latestissue/topstories/hb1869.html
http://www.consumersunion.org/consumeronline/latestissue/topstories/MfgHomes.pdf

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Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers.

View Files Sorted By Office: Consumers Union OPI, New York - Washington DC Office
West Coast Regional Office - Southwest Regional Office - Consumer Policy Institute

  
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