Fleetwood Enterprises, a longtime producer of manufactured housing and recreational vehicles, will be venturing into the consumer finance arena to help move its inventory, the company indicated in a filing with the Securities and Exchange Commission last week tied to an equity offering.
Securitization is an eventual goal for the company.
Until the late 1990s, Fleetwood managed a consumer finance subsidiary called Fleetwood Credit Corp. The company sold the unit in 1996, and its product sales were dependent in part on other lenders - such as Conseco Finance, GreenPoint Finance, Associates First Capital (acquired by Citigroup) and Chase Manhattan Mortgage Finance - to finance its customers. The market exodus from such lenders has materially impacted Fleetwood's sales, the company states in its offering.
"Our ability to build our loan portfolio in connection with this new consumer finance business depends in part on our ability to compete with established lenders and to effectively market our consumer finance services to buyers of our manufactured homes, while operating in the same unfavorable economic conditions that have caused experienced consumer finance companies to exit the manufactured housing business," Fleetwood states in its filing.
The company also discusses current adverse conditions of the ABS market for manufactured housing-backed deals, resulting from the poor performance of transactions from some of the above-mentioned issuers, as well as pressure on the GSEs to avoid riskier markets (which were potentially aiding in the secondary market for securitized MH pools).
"As a result, and due to our relatively recent entry into the business, we may have difficulty accessing that market," Fleetwood states.
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