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AUSTIN, TX -- The manufactured housing industry has come a long way since the 1970s, but so many problems persist, stiffer oversight is welcome -- and on its way.

"Paper Tiger, Missing Dragon," by Consumers Union, publisher of Consumer Reports, picks up where the similarly scathing "In Over Our Heads: Consumers Report Predatory Lending and Fraud In Manufactured Housing" left off earlier this year.

"Manufacturers will need to assume greater responsibility for the final product and regulators will need to be much more responsive to consumers," said Kevin Jewell, a CU policy associate and author of the report.

Michael Lyttle, spokesperson for the Texas Department of Housing and Community Affairs Manufactured Housing Division (TDHCA) says Consumers Union's most recent report is based on dated data that does not account for steps the Lone Star state has taken this year to combat manufactured home problems.

Effective just two months ago, more than 100 pages of sweeping new"Manufactured Housing Rules" in Texas addresses everything from arbitration to wind zone issues and should begin to ease some of the problems.

The state this year also revamped the TDHCA, giving the division a board of directors, an executive director and new powers amounting to agency-level status.

"There's no question the report raises some very valid issues in areas the division can improve upon, but the information they gathered was more of a snapshot in time and does not cover things that have happened in the division in the last six months or so," said Lyttle.

Consumers Unions report is the latest in a growing library of reports on the ills of manufactured housing.

"I fear legislation is the only way to combat all this because the industry won't police itself," said Kevin Burnside, author of Buying A Manufactured Home" (Van der Plas Publications, $14.95).

In a prepared statement, the Manufactured Housing Institute says Consumers Union study includes broad generalizations about the industry based on consumer complaints from a small sample of homes sold in Texas and an even smaller sample of complaints.

It also says manufacturers police their quality by conducting customer satisfaction calls six-months after a manufactured home purchase to identify and correct problems.

"This customer satisfaction process finds the vast majority of respondents reporting that they are satisfied with their home purchase and the home's performance. If a problem is identified, then the manufacturer or his retail representative undertakes remedial action," the institute statement says.

If that is the case now, it hasn't always been, according to Consumers Union.

Focusing on Texas, Consumers Union randomly surveyed 122 recent manufactured home buyers, reviewed 300 complaints on file at the Texas Department of Housing and Community Affairs Manufactured Housing Division (TDHCA) and through the Freedom of Information Act, obtained from the Federal Department of Housing and Urban Development (HUD) summary information from the federal manufactured housing program's national compliance tracking database.

Of manufactured home owners surveyed by CU, 33 percent said they were more dissatisfied than satisfied with their new home, including 17 percent who were completely dissatisfied. A whopping 79 percent of respondents said they had experienced problems with their manufactured homes.

When manufactured home owners experienced problems help often wasn't available. CU found TDHCA was often ineffective at regulating the industry.

CU said the department rejected more than one third of warranty complaints without investigation, routinely did not tell consumers about their right to ask for a receive an inspection, rarely flagged repeat offenders for incorrect manufactured home installation and likewise infrequently audited manufactured home showrooms.

"The problem is they see their role more as a service agency for the industry than a protector of home buyers," Jewell noted. "Without a strong regulator and enforcer to protect consumer rights, the 1.2 million Texas families who live in these homes find themselves at a greater disadvantage," he added.

Lyttle says things are changing and consumers are beginning to find a friend in TDHCA.

"We've taken the issue seriously and have already started to work on preparing disclosures, revising the intake procedure for complaints to handle them more quickly and we are taking corrective actions on a timely basis. We are also implementing progressive enforcement. If we have repeat violators they will face license suspensions or licenses will be revoked," said Lyttle.

Among the problem areas, CU did find reduced incidence of roof problems. Manufactured home owners are no more likely to perform a major repair to their roof than conventional home owners, but roofs still ranked among the Top 5 problem areas -- doors/windows, plumbing, walls, roofs and floor coverings.

CU also found that manufactured home residents are 49 percent more likely to have major door repair work than site built home residents, and they report broken windows at three times the rate of site built home residents.

Problems with structural plumbing were also down, but 57 percent more manufactured home dwellers performed major repairs on their plumbing fixtures than site built dwellers.

"Homes are built so fast in many cases, that trim is 'slapped on' instead of applied with craftsmanship and pride," Burnside said.

The study recommends:

  • Inspection of all homes, rather than the 25 percent currently required to be inspected at random.
  • Escrow of the final payment shouldn't go to the retailer until installation and warranty repairs are complete and verified by a third party.
  • Better, more relevant consumer information from TDHCA, investigation of all complaints, and a clear sense of purpose as a consumer protection agency.
  • Voluntary arbitration elected by both parties, rather than one imposed on consumers unilaterally.
  • An extended split warranty system for manufactured homes -- a general warranty for 1 year and a "structural" warranty for five years, since consumers may not be able to discover hidden trouble within the home within the first year.

    "The manufactured housing industry is committed to observing high standards in the construction of manufactured homes and seeks to provide a quality home at a price that most people can afford," said the institute's statement.

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