Manufactured homes are increasingly becoming a popular choice among today’s homebuyers, and savvy lenders are starting to take notice. Working with manufactured homes can be complicated, and working with the wrong title provider can be a recipe for disaster.
Industry veteran, Tamara Clawson, account executive, origination title and close at ServiceLink, discusses some of the nuances of working with manufactured housing, the importance of partnering with an expert in this space and more in the Q&A below.
Q: Why ServiceLink for manufactured housing?
A: ServiceLink is one of the few title companies that is willing to process and insure manufactured home conversions. We have carved out quite a niche for ourselves in this area, and have decades of experience titling, de-titling or converting manufactured homes from personal property to real property, depending on our lender partners’ specific needs. We ensure that lenders’ manufactured home deals are getting the care and attention they deserve with our dedicated manufactured home staff. Our experience and level of service in this space is unparalleled.
Q: Working with manufactured homes can be nuanced and complicated. Why is it important to work with a partner who understands these nuances?
A: It is crucial to work with a title company that understands how to properly title and de-title a manufactured home to avoid potential headaches down the road – for the lender and borrower alike. For example, in the case of an unfortunate foreclosure, it is vital for the conversion process to be completed correctly. If the home was not insured or converted to real property correctly, and the lender did not have clear title or full conversion of the manufactured home, the lender would not be able to foreclose because they did not have the vested interest in the home to foreclose upon. Another scenario that could result in loss or heartache would be if there is an open title in a previous owner’s name with a previous lienholder. If someone has leant on the property, and it is still in that same condition, that party could come back and take that manufactured home off the property completely. Unfortunately, I have seen these scenarios play out in my career when processes and procedures were not followed properly.
Q: Why do you feel manufactured homes are starting to get more buzz in the industry?
A: It is a byproduct of the current state of the market – cost of materials, rate environment, low inventory, etc. – and because of how far manufactured home building has progressed over the years. The new manufactured homes being processed today are not like the old ones. They are better built, using quality materials – similar to stick-built homes. Manufactured homes are built in a controlled environment, assembly-line style, so not as many portions of the process are contracted out, like a stick-built home. The only portions that may be contracted out would be the preparation of the home site or when the home is physically placed onto the land. Everything else is done by the same manufacturer, in the same warehouse – which is also beneficial as the risk of vandalism to the manufactured home is virtually non-existent. The build of a manufactured home is also much quicker than a stick-built home and less costly. The cost is one of the main reasons why so many lenders are starting to look more closely at manufactured homes versus stick-built construction. Another reason is the inspection portion of it is quicker. The home has already been inspected by HUD and appropriate tags have been affixed to the home. The only other inspection that would be completed would be from the city building and zoning office to make sure that when the home was placed onto the property, it was done to code. Manufactured homes are finally getting their moment in the sun, and I think their popularity will continue to grow.
Q: Any advice for lenders looking to get into the manufactured home lending space?
A: My advice would be to ensure you’re working with a title provider that understands manufactured home lending and is an expert in this space. There are many things that can go wrong throughout the process if you are collaborating with a provider that doesn’t have much experience working in this space. Your title provider should also be an excellent communicator. There are many steps and stakeholders who need to be communicated with throughout the process of a new purchase or refinance of a manufactured home – from the lender to the borrower to the manufacturer, and many more in-between. Any break in the communication chain could result in costly mistakes for the lender.