Most of the advice about today’s housing market relates to standard residential property loans. If you’re dealing with a potential problem with your mobile home loan, there are different sets of guidelines and rules that you should consider. At a base level, most mobile homes have a lower price than standard homes, so you’re dealing with a different level of financing than the standard market. Additionally, a different set of regulations applies to mobile home loans in many cases, although this is largely contingent upon whether the property serves as your primary residence.
As a first step in dealing with a potential delinquency on your payment, it’s important to be upfront with your mortgage holder to open up dialogue about the issue. Many people think that by going to their bank with a problem, it can only make the issue worse – the truth is that, at the very worst, you are entitled to your original loan contract, and, in many cases, you can reach an agreement for a temporary adjustment to the terms in your favor.
A major difference with standard home markets is that the after market for mobile homes is much less liquid than the residential market so the bank won’t be as eager to use a foreclosure option (although they certainly will if they have to.) Consequently, it’s better to think of the mobile home market as more akin to the truck market where depreciation rates are relatively high and the property has more of a finite life cycle. Because of this, you may find the lender is more willing to work with you on adjusted terms.
Another important factor to consider is the role of land – if your underlying land property is tied to the loan, this may change the equation, as banks will find physical land to be a greater collateral that is more liquid. The bank will likely separate the two in the case of a foreclosure, but you should take this factor into consideration. When you approach your lender, you can suggest a number of possible refinance options, depending on your situation.
Your options range from a modification in interest rates, the term of the loan or temporary suspension of payments (this is ideal in the case of emergencies, when your income temporarily drops but will come back to normal again.) some mobile home owners might get creative by lending out the property to a renter at a rate above the monthly mortgage payment and temporarily staying with friends or family under you have a more stable financial situation. By becoming a Section 8 landlord you can sublet the property and set the rent.
Another option is to find a real estate investor who is willing to take on the loan; as long as the original loan can remain in tact, your bank may very well be open to this option. With some hard work and dedication, as well as some creativity, you can work to avoid foreclosure on your mobile home, and even move to a better financial position in the near future.
My name is Maurice “Moe” Bedard. I am the founder of America’s #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.