Additionally, Conseco has informed me that they will remove all repossessions from manufactured home communities in Oregon and Washington unless the community provides Conseco with complete rental abatement while the home remains in the community for resale. According to Conseco, if the community does not give Conseco complete, 100% rental abatement, they will remove the home and relocate it to one of two sales centers they are opening in the Seattle or Portland area. This is a tactic that Conseco has already begun in other regions and the decision was made last week to open these sales centers in the Pacific Northwest after Conseco executives toured a wide variety of parks and communities and witnessed first hand the size and scope of the repossession problem in our region. Conseco also plans to announce an additional 200-300 repossessions in our region within the next 60-90 days. These are either homes that prior to now were not officially disclosed or marketed as repos, or they are repossessions that will be created because of an tightening of Conseco's collection policies and procedures.

Conseco will not give a community owner any guarantees as to the disposition of the home even if the owner gives Conseco rental abatement. It is entirely possible that you could forgive all rent while the home sits there for sale, and then one day wake up and find the home being moved out of the community and relocated onto the purchasers home site down the road or across the state.

This is clearly a very alarming and heavy handed approach. Conseco and it's subsidiaries have been in deep financial trouble for some time, and this announcement is surely designed to show Conseco's creditors, bondholders and shareholders that they are taking aggressive measures to decrease losses and change the way they do business. Unfortunately, these measures are not good for our industry and won't help us attract new sources of chattel loans for manufactured home purchasers who wish to place a home in a rental or lease community.

I am meeting with Conseco management in Seattle next Wednesday, October 9, in an attempt to convince them to handle their repossessions in a different and more productive manner, but as our Conseco representative told me late yesterday "I've worn out my hand signing space rent invoices. Conseco is done paying space rent." As upsetting as this mentality is, we will continue to attempt to persuade Conseco to leave their repossessions in Commonwealth communities while we work together with them to help re-market these homes to qualified buyers at reasonable prices. As a sign of our continued commitment to this effort we will announce shortly an alliance with one or more companies whose sole responsibility will be to act as a liaison between Commonwealth communities and the various industry lenders, concentrating on marketing these homes in-place and providing competitive financing for purchasers.