Commerce introduces bill to address unfair practices in manufactured housing industry
Agency proposes to study, make recommendations for action to protect consumers
Manufactured homes are an important source of housing and provide homeownership opportunities for people who might otherwise be unable to afford a home, including seniors and low-income households. In stark contrast with conventional homes, however, buyers of manufactured homes do not enjoy equal protections under the law, making them more vulnerable to unfair and sometimes predatory business practices.
At the request of the Department of Commerce, Rep. Cindy Ryu (D-32), introduced House Bill 2954 that directs the department to conduct a study of the sale and financing of manufactured homes and develop recommendations to improve consumer protections for purchasers of manufactured homes.
“Every year thousands buy manufactured homes as a way of securing an affordable home. Many of them then find the costs to be much more than they bargained for,” said Gov. Jay Inslee. “I support this proposed effort to better understand this industry and find ways to stop unfair practices that could leave some Washington homeowners out in the cold.”
“Recent reports by the Seattle Times about questionable lending practices by sellers of manufactured homes revealed some unsettling facts around the lack of consumer protections for most loan products used by purchasers of manufactured homes,” Commerce Director Brian Bonlender said. “At a time of an alarming rise of homelessness and when we are delving into the many ways in which the most at-risk in our communities may find themselves unable to afford housing, issues raised by the investigation clearly demand close examination.”
Manufactured homes are typically sold as personal property under retail installment contracts and similar financing agreements, in contrast to the sale of real property such as site-built homes, which are typically sold under financing contracts subject to the deeds of trust act. The state provides consumer protections for homebuyers under the deed of trust act and other laws that most purchasers of manufactured homes do not have.
“I’m pleased to sponsor this bill directing the Department of Commerce to identify roadblocks and unregulated practices and help Washington establish clear consumer protections for buyers of manufactured homes,” Rep. Ryu said.
Reporting over the past year has identified concerning sales, lending, and repossession practices in the manufactured housing industry in Washington state and nationwide.
The bill directs Commerce to study sales and financing practices and make recommendations to provide protections which currently do not apply to manufactured homes, such as extended timelines to cure defaults, foreclosure mediation, and a prohibition against deficiency judgments.