Debt Collection Best Practices for Community Owners

Photo Courtesy of Clayton Homes

by Ryan Fishman

As the owner or operator of a manufactured housing community, you’ve probably dealt with your share of delinquent payments. At first, a resident is just late – maybe a couple of days.

Eventually, you will experience the rent payment never comes. There’s no response to calls or knocks on the door, so you’re forced to pursue an eviction. Once you have possession of the home or site, you’re stuck carrying a loss you might never recoup. This process forces you to perform a juggling act of financial, legal, and ethical considerations. Worst of all, you’re often expected to go through this process alone.

Don’t Lose Hope

With a set of standard operating procedures for your community, you can develop an effective collections process to mitigate these losses. By being proactive, you’ll avoid the heartaches and headaches often associated with post-eviction losses, boost your cash flow, and give your community a competitive business advantage.

Setting the Record Straight

We like to tell our clients the place to start is the start. That means comprehensive and standard credit screening protocols for prospective residents. It’s critical this process be structured and tightly maintained – it will help avoid more delinquent or defaulting residents down the road and improve your ability to collect

post-eviction. There’s a long list of proactive steps that go into a strong policy, but ever-critical are minimum credit standards, legible paperwork, and the delivery of clear expectations before move-in.

The figures in your credit policy are a function of the level of risk your community is willing to take. This means evaluating your range of acceptable credit scores and determining what other key aspects of the prospective tenant’s credit profile — like income, for example — are most consequential to you. Making these decisions on the fly can lead to serious errors in accepting residents with questionable reliability, and perhaps also denying potential customers with stronger profiles than initially evident. Standard procedures also help avoid turning the application process into a fair housing minefield.

It’s important that you are explicitly clear with your prospects as to what you expect out of them. This means laying out a clear policy when it comes to late payments or missed payments, and the specific steps you plan to take if they’re late or default. This will ensure there are no surprises when you take immediate and decisive action to protect your community’s best interests.

Eviction

Evicting a resident is a laborious and, often, precarious process; for the purposes of this article, we will focus on how evictions tie into your ability to collect. First and foremost, find a landlord-tenant attorney to handle your evictions to avoid exposing yourself to any liabilities that may arise in exercising your right to pursue an eviction. Defaults and bankruptcies sometimes go handin-hand, thus without the proper filings you can easily find yourself in violation of federal law. Bankruptcies not only slow down the eviction process, they often preclude you from later pursuing the balance owed.

It’s critical that residents understand that eviction does not exempt them from paying their balance. Follow through with your standard security deposit notice and make a demand for any additional balance that’s owed, including the past due rent, late fees, accelerated rent, releasing expenses, outstanding utilities, damages, clean up, court costs, statutory attorney fees, and other expenses legally permitted by federal, state, and local laws in your jurisdiction. Often, defaulted residents have the mistaken understanding that once they are evicted, the slate is wiped clean. Not only is that not true, but it can often stall getting paid voluntarily post-eviction. It is critical your community staff makes clear to the resident that, if evicted, they will still owe you that money, and you will pursue anything that is not paid voluntarily. MHV

Ryan Fishman leads the Fishman Group, a creditor’s rights law firm with a team of experienced attorneys who specialize in debt collection. Fishman is a regular contributor in media reports on the industry and serves as a subject matter expert in collections law.

– 2020 –INDUSTRY AWARDS

In Recognition of the Highest Achievements in Manufactured Housing

Commendable teamwork abounds in the manufactured housing industry, including from the organizations that honor great work in building communities, homes, and services that aid in the effort of high quality, attainable, affordable housing.

MHInsider Industry Awards is a bit different than most award programs in that it keeps to the personal feel of our industry magazine. When it came to the awards program it was clear that we should honor individuals for the highest achievements in manufactured housing.

Each MHInsider Industry Award winner profile is like an introduction, a small bio, and a peek into what drives the recipient to achieve at such heights.

Our 15-member editorial board internal project team pared the candidate list back from more than 60 individuals from 20 states to a shortlist of 16 nominees. We employed the volunteer efforts of more than a dozen state and regional manufactured housing industry association directors to conduct a vote on the safe, and secure voting platform eBallot.

So congratulations to all of the nominees and winners. Thank you for your dedication to high quality, affordable housing.

Each of the MHInsider Industry Award winners will receive the inaugural personalized “crystal home” award chosen by our team.

Advocacy Award Honors efforts toward outreach and education that reach beyond professional position or title

Influencer Award Honors individuals who by their presence and authentic implementation of ideas have created widely held business practices and wholesale improvements for the industry

Leadership Award Honors individuals who have earned the highest levels of industry achievement through their corporate or organizational leadership approach

Legacy Award Honors manufactured housing professionals whose overall career contributions are certain to create meaningful and lasting industry improvement and excellence

Visionary Award Honors those who have brought to market the coolest concept or product, the idea that makes the job easier, the offering better, the customer experience more meaningful

Honorary Judges

Ken Anderson, Ariz. Jim Ayotte, Fla. Amy Bliss, Wisc. Frank Bowman, Ill. Ron Breymier, Ind. Joan Brown, Wash. Mark Brunner, Minn. Randy Grumbine, W.V. Jennifer Hall, Ky. JD Harper, Ark. Deanna Fields, Okla. Brad Lovin, N.C. Jess Maxcy, Calif. Marla McAfee, Tenn. DJ Pendleton, Texas Leo Poggione, Nev. MHInsider Editorial Board

George Allen, EducateMHC Paul Barretto, MHInitiatives Paul Bradley, ROC USA Barry Cole, Manufactured Housing Insurance Services Kevan Enger, Capstone Stacey Epperson, NextStep Suzanne Felber, The Lifestylist Dawn Highhouse, MHVillage/Datacomp Maria Horton, Newport Pacific Darren Krolewski, Datacomp/MHVillage John Neet, MAI Karl Radde, Southern Comfort Homes Patrick Revere, MHInsider/MHVillage TC Sheppard, UMH Properties Joe Stegmayer, Cavco

ADVOCACY AWARD

Mark Yost, CEO of Skyline Champion Corporation

Mark Yost, the winner of the MHInsider Advocacy Award, is the CEO of Skyline Champion Corporation and was nominated for the award on the merit of his industry representation in Washington, including a July meeting at the White House that resulted in progress on peeling back excessive regulatory requirements that drive up the cost of housing. He also presented for the industry at the Innovative Housing Showcase in June of 2019, and testified in Congress regarding HUD Code updates and associated legislation including the HUD Modernization Act. Prior to being named CEO, Yost served as Champion’s CFO for more than six years.

What do you view as the biggest accomplishment of your career?

To be honest, I don’t think of myself having one. I do not think of things that are accomplished as big events. I think of accomplishments really being rooted in the small and daily things you do compounding over time and working with great people that are the foundation for accomplishments.

Nominees: Stacey Epperson, Next Step Amie Hacker, Parkplace Homes

What work or life skill do you give the most credit for your achievements? It is a combination of two really big skills that I think of as two sides of a coin. Critical Thinking and Emotional Intelligence. I have always loved problem solving, originally looking work in or be a professor of either quantum or particle physics because of understanding of how small things work together so well to create everything around us. I think of Emotional Intelligence in the same way, we are a wonderful team of people, each with our unique gifts and traits and when they are together in the right environment and let them do what they are best at, amazing things happen. I often hear the saying that people are our greatest asset, people are the company, period. Everything else is assets.

INFLUENCER AWARD

Kevin Clayton, CEO of Clayton

Kevin Clayton leads Clayton, a national builder of off-site built homes, with a focus on innovation, sustainability, and customer experience. Clayton works together with industry partners to make homeownership attainable for more families. Clayton teamed on the initiative around CrossMod™ homes, a new type of off-site built homes with the potential to finance and appraise similarly to site-built homes. Additionally, he spearheaded matching funds for the RV/MH Hall of Fame and has provided innumerable gifts from the Clayton Home Foundation and Family Foundation that invest in affordable housing, community involvement, and educational enhancement.

What do you view as the biggest accomplishment of your career? Together are we able to unite efforts to improve lives and utilize innovative building methods and products to build a better tomorrow. That is why an extraordinary team member experience is so important, and why we look for to engage our workforce, reduce turnover, increase wages, and invest in facilities. We want to make Clayton a family atmosphere with fellow teammates.

What work or life skill do you give the most credit for your achievements? One of the most important skills I’ve learned during my career is to adopt a style of servant leadership that focuses on others. Directing efforts to improve the lives of our team members, homeowners, and communities allows us to build a stronger and better company. Warren Buffett says if he could inject one gene into every company, it would be to make them customer focused. By listening to others and striving to answer needs we continue to make progress. Nominees: Mike Sullivan, Newport Pacific Steve Schaub, Yes Communities

LEADERSHIP AWARD

Wally Comer, President of Adventure Homes

Nominees: Steven Adler, Murex Todd Su, Advantage Homes

Wally Comer, the winner of the MHInsider Leadership Award, could have retired or gone into consulting, but he founded Adventure Homes during troubled times, taking over a defunct plant, creating jobs, and building award-winning homes. Ten years later, Comer and his team run one of the most successful manufactured housing facilities in the country. Adventure has won numerous Manufacturer of the Year awards from MHI, as well as many other accolades, including a 2019 induction into the RV/MH Hall of Fame. Adventure works to build what the customer wants, and has worked equally as hard to get factory-built homes into urban areas where they had previously had been zoned out.

What do you view as the biggest accomplishment of your career? Perhaps my biggest accomplishment was the creation of Adventure Homes. Adventure is a business dream come true for me. It’s one thing to shoot for the stars, it’s amazing when you actually hit one! I’m incredibly proud of our company. I call it ours because there are so many people who have played a significant role in our success.

What work or life skill do you give the most credit for your achievements? My father never achieved the level of success that I enjoy today. He worked hard his entire life and never complained, never missed a day of work, never spoke badly of anyone. He was my hero. Out of college I made a promise to myself that I would work every day without compromise. There is not a day I go to work that I don’t think about him. He didn’t know it at the time but he was my inspiration. He is the reason for my success.

LEGACY AWARD

John Crean, Founder of Fleetwood Enterprises

John Crean, the winner of the MHInsider Legacy Award (posthumously), founded Fleetwood Enterprises in 1951 and built it into one of the nation's most successful manufacturers of RVs and mobile homes. Based in Orange County, Calif., Fleetwood by 1998 when Crean retired had become a Fortune 500 company at better than $3 billion in annual sales. That year, Fleetwood sold more than 135,000 RVs and manufactured homes. Fleetwood built more than a million homes under the leadership of John Crean, who passed away in 2007. He was a veteran of the Navy and Merchant Marines. John and his wife Donna gave generously within Orange County and elsewhere, including at times donating half of their annual earnings.

On John Crean’s Career In 1965, Fleetwood had nine factories and less than a decade later the company was operating 70 plants. The company, at its height, was the largest manufactured home and RV maker in the world.

Observations from a Colleague “John started off slow, making 10 floors a week and made sure it could be profitable that way, and then the growth began. There was no debt and very thoughtful growth with the operating profits on hand. John understood how to pace the business and always was very generous to his employees, which is why he always had a strong team. There was a good training program, and it ended up preparing a lot of people who went to other companies or started their own successfully, as well.”

– Gordon Collins, Fleetwood Marketing

Executive and colleague of John Crean Nominees: Jim Clayton, Clayton Art Decio, Skyline Chuck Fanaro, DWG Corp.

VISIONARY AWARD

Cody Pearce, President of Cascade Financial Todd Kopstein, CEO of Cascade Financial

What do you view as the biggest accomplishment of your career? For 21 years I have had the honor of working with many incredible team members. George Dover and I started Cascade in 1999 and slowly built a strong foundation. When Todd Kopstein, Wayne Bond, Ryan Stum, and Gerron Dover became our partners in 2006, Cascade began to really grow. Now I look at the talented executive team that we have and more importantly the individual team members at Cascade who work day in and day out serving the American Dream through affordable home ownership and I am humbled and grateful to each of them. Building Cascade shoulder-to-shoulder with so many great people is my biggest career accomplishment.

What work or life skill do you give the most credit for your achievements? I enjoying connecting with other people. I believe that the ability to connect with anyone at any level has allowed me to succeed where I otherwise might not have. Cody Pearce, President of Casacade Financial

Cody Pearce, the co-winner for the MHInsider Visionary Award, shares the honor with Cascade CEO Todd Kopstein. These leaders of the Arizona-based lender developed the first securitized pool of home loans in the manufactured housing industry in more than 15 years. Round one is valued at $175 million, with a second larger round coming that could receive a credit rating and further shoring up financing for factory-built housing.

Todd Kopstein, the co-winner of the MHInsider Visionary Award, shares the honor with Cascade President Cody Pearce. The combination of manufactured housing industry knowledge at Cascade combined with Kopstein’s experience as a director at Centerbridge partners with a deep background on Wall Street and in securities, provides the potential for a major breakthrough in affordable home finance that will be beneficial for all manufactured home lenders, builders, community owners, and homebuyers.

Nominees: Kenny Shipley / Curt Hodgson, Legacy Housing George Porter, Manufactured Housing Resources

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