The Department of Housing and Urban Development this week ordered Fleetwood Enterprises Inc., the nation's largest maker of mobile homes, to notify owners of about 4,000 Fleetwood-manufactured homes that their dwellings do not meet federal standards and could be damaged by high winds and other conditions.
Judge Alan W. Heifetz, HUD's chief administrative law judge, ruled that the shear walls in some of the mobile homes, the metal straps that hold down the roof in others and floors in some models fail to meet federal manufacturing standards.
Heifetz issued the order as a result of a hearing last month that Fleetwood officials refused to attend. Instead, the California-based corporation asked a federal court in Texas, where the 4,000 mobile homes were built, to issue a preliminary injunction halting the hearing, arguing that the formal, open session was beyond the agency's authority. The Texas judge denied the request.
"From our standpoint, nothing has changed," said David Marriner, Fleetwood's treasurer, adding that the company will wait for the final ruling from the Waco, Tex., judge before commenting further on Heifetz's order.
If the judge decides the company is entitled to a closed hearing, "we assume" he also will issue "some kind of restraining order" sparing Fleetwood from having to obey Heifetz's order, he said.
The manufacturer believes information divulged in a public hearing would hurt the company's business, according to the Texas court documents. Fleetwood President Glenn F. Kummer said in an affidavit filed with the suit that the company asked for a private meeting as a way to protect "production designs and processes, engineering practices, product-testing methodologies and related proprietary information" from its competitors.
Kummer's affidavit said Fleetwood believes the disagreement with HUD involves "only disputed engineering interpretations of construction standard language. . . . "
The 4,000 mobile homes are part of a group of 80,000 manufactured by Fleetwood between 1981 and 1984. A HUD official has said that the remaining 76,000 homes may be built similarly, but that the agency does not have the resources to investigate the entire group.
Heifetz ruled that mobile-home owners must be notified of the ways in which their dwellings fail to meet standards and the problems that may result. Engineering analyses to determine the repairs needed could cost from $100 to $800, and the repairs are estimated to cost from $100 to $500 for each mobile home, according to the order.
Heifetz ordered that the notices must say that homeowners will have to pay these costs, and that Fleetwood will not pay them.
HUD cannot order a manufacturer to make repairs unless "an unreasonable risk of injury or death" is present, which engineers say is not the case with the Fleetwood homes, an agency spokesman said.
The judge's order said owners of homes where shear walls are below standard must be told that high winds could cause separation of joints between walls and the roof or floor and buckling of walls and floors. Roof leaks, separation of the roof from walls and separations of the joint between ridge beams and support posts are among problems that could occur in homes where the metal straps holding down the roof do not meet standards, the order said. Where floors are below standard, buckling of floors, separation between walls and roof or floor, roof leaks and buckling or cracking of interior walls are some of the problems that owners may encounter, according to the order.
Mobile homes must meet HUD standards to qualify for Federal Housing Administration mortgage insurance, a status vital to the industry because most purchasers have moderate incomes and could not qualify for a loan without the FHA insurance. If a manufacturer disagrees with HUD findings of noncompliance, it can ask for a hearing. HUD rules permit either an informal session or a "more formal and adversarial" hearing, and the agency chose the latter in Fleetwood's case.
Another battle is being waged in a D.C. federal court over whether HUD must release information about the design and manufacture of Fleetwood homes gathered during the agency's investigation leading up to the hearing. Washington attorneys representing a Saudi Arabian firm, Najran Company for General Contracting and Trading, which purchased 600 Fleetwood mobile homes in 1982 and 1983, said the Freedom of Information Act requires HUD to release the information.
When HUD refused, Najran's Washington attorneys sued in an attempt to force HUD to give up the information. Fleetwood countered with its own suit, asking the federal court to stop HUD from releasing the information.