SONOMA, CA --
It's a good sign that the market is turning around in the MHP business.
The appraisal fell $55,000 short, but the determined buyer didn't back out of the deal.
This is THEE house for this couple. The contract sales price was nearly $180,000, but due to dropping sales prices in the subject park, the appraisal came in at $125,000.
It's been several years since anything like this has happened.
Buyers paying substantially more for a used manufactured home in a park than the appraised value.
Let's see if this trend continues.....
Dave Shanklin
Mobile Brokers Acceptance
Fair Oaks, CA
NMLS ID # 314463
800-401-3372
Wednesday, June 22, 2011
Mobile Home Buyers : Take Advantage of Very Low Interest Rates for Mobile Homes and Modular Homes in Parks
Our industry's main lender out of Seattle is holding on to their very sweet interest rates for MH's in parks.
Their "floor" rate is still at 4.99% for short-term financing.
If you'd like to consider an adjustable, Arm products are available for manufactured homes in parks built after 1991. Minimum 5% down.
Call for details!
Dave Shanklin
Manufactured Home Finance Specialist
Mobile Brokers Acceptance
NMLS ID # 314463
800-401-3372
info@MobileHomeDollars.com
Their "floor" rate is still at 4.99% for short-term financing.
If you'd like to consider an adjustable, Arm products are available for manufactured homes in parks built after 1991. Minimum 5% down.
Call for details!
Dave Shanklin
Manufactured Home Finance Specialist
Mobile Brokers Acceptance
NMLS ID # 314463
800-401-3372
info@MobileHomeDollars.com
Tuesday, June 7, 2011
TOP FIVE REASONS WHY LENDERS DECLINE LOAN APPLICATIONS FOR MOBILE HOMES IN PARKS
Top Five Reasons Why
Lenders Decline Loan Applications
for Mobile Homes in Parks
By Dave Shanklin
1. MORTGAGE DEFAULTS. This has been the biggest nightmare for MH chattel loan officers. Short sales, foreclosures, and applicants burdened with mortgaged homes that they can’t sell. Our industry’s lenders started to show signs that they might be softening their position on mortgage defaults on credit reports, but they’re still turning down applicants with mortgages that have gone “belly-up”.
Our major lender out of San Diego will occasionally tolerate recent bouts of unemployment, recent bankruptcies, FICO scores in the low 600’s, and even recent mortgage lates. This lender has become what I call a “sub-prime” lender, based on the above, eventhough they will probably deny this title. Most of our industry’s lenders have a zero tolerance policy toward recent mortgage lates. But this lender has been accepting borrowers with less than perfect mortgage history, as long as the home loan was paid in full and didn’t default.
I am being told that FannieMae lenders are now approving applications with short sales that are at least three years old. This is helpful to the entire real estate market. Hopefully, in an upcoming column I can announce that our lenders are doing the same.
2. “I OWN A HOME WITH A MORTGAGE, AND I WANT TO RENT IT OUT AND BUY A MANUFACTURED HOME AND GET A LOAN FOR IT”
It’s long been a FannieMae guideline to accept rental income and deduct part of that income from the borrower’s debt ratio. A few strict rules apply here.
Our lenders will, from time to time, accept rental income on mortgaged properties as qualifying income. However, the rental income has to be documented with at least two years’ of tax returns. Only 70% of the rental income, after expenses, will count as qualifying income when computing the borrower’s debt ratio. Most of the time, the homeowners are in the red and don’t realize it. If a house rents for $1200/month, and the mortgage payment is $1200/month, then the mortgage payment is not “covered”.
3. “I WANT TO BUY A MANUFACTURED HOME FOR A FAMILY MEMBER AND FINANCE IT”
This is what the industry calls a “buy-for” transaction. Good luck getting the LL community manager to agree to this. Most LLC’s do not allow non-owner-occupied homes.
As far as lending, there is one lender in our industry that will consider “buy-for’s” on a case-by-case basis. The home needs to be 1991 or newer, with a maximum loan of $75,000, and a very strong co-signor. This lender prefers the co-signor to be an immediate family member, and they will have to nearly “walk on water” credit-wise to get loan approval.
Loans that are less than 100% full-time owner-occupied are considered to be the highest risk category of loan for the chattel lenders. They are so paranoid that one of our lender’s underwriters now routinely makes phone calls to the applicants BEFORE making a credit decision, just to make sure that all people on the loan application intend to live in the manufactured home that they are borrowing money for. Exceptions are made for “vacation properties”. But forget about buying a manufactured home, financing it, and renting it out, even if the home is with owned land. The land/home lenders are equally as strict on these matters.
4. “I WANT TO BORROW THE DOWN PAYMENT”
As I have mentioned in past columns, down payment funds must be true equity, free and clear of encumbrances. Preferrably, the entire down payment should be the borrower’s life savings. This is the “glue” that holds the buyer to the asset, making it less likely that they will turn their back on the house if the have a bad year.
Family members may gift part of the down, or in some cases, all of the down. The gift provider will have to provide bank statements and sign a gift letter. With one lender in our industry, the gift provider will have to send the loan officer additional bank statements showing the funds being transferred from the gift provider, and the gift recipient will have to provide a bank statement showing that they received the funds. This is called “paper trail”. This is to rule out any possibility that any part of the down payment was snuck in via a credit card cash advance, and disguised as a gift from a family member. This would be considered a fraudulent transaction, and any loan originator who goes along with this and gets caught will be immediately unemployed and unemployable in this industry.
5. “I HAVE INCOME BUT NO CREDIT, BUT MY SPOUSE HAS CREDIT BUT NO INCOME”
As a new loan officer, I sent in several applications of husband-wife situations with one spouse with good credit and no income, and the other spouse with high income and no credit, or bad credit. The applications got declined.
Underwriters will NOT accept a co-applicant’s income unless it is backed up by strong credit report. If one spouse has enough income on their own, and good credit, then the other spouse can be added to the loan, but their income will not count if they have unacceptable credit.
Quite often, loan officers find themselves giving advice on how to build credit. If the consumers follow the advice, then in a few short years they can turn the situation around and become proud homeowners. Quite often, the consumer is never heard from again. I guess they ignore the advice, keep going down the wrong road, and keep renting……..
Dave Shanklin
NMLS ID # 314463
Mobile Brokers Acceptance
Fair Oaks, CA
800-401-3372
916-962-7128
# # #
Lenders Decline Loan Applications
for Mobile Homes in Parks
By Dave Shanklin
1. MORTGAGE DEFAULTS. This has been the biggest nightmare for MH chattel loan officers. Short sales, foreclosures, and applicants burdened with mortgaged homes that they can’t sell. Our industry’s lenders started to show signs that they might be softening their position on mortgage defaults on credit reports, but they’re still turning down applicants with mortgages that have gone “belly-up”.
Our major lender out of San Diego will occasionally tolerate recent bouts of unemployment, recent bankruptcies, FICO scores in the low 600’s, and even recent mortgage lates. This lender has become what I call a “sub-prime” lender, based on the above, eventhough they will probably deny this title. Most of our industry’s lenders have a zero tolerance policy toward recent mortgage lates. But this lender has been accepting borrowers with less than perfect mortgage history, as long as the home loan was paid in full and didn’t default.
I am being told that FannieMae lenders are now approving applications with short sales that are at least three years old. This is helpful to the entire real estate market. Hopefully, in an upcoming column I can announce that our lenders are doing the same.
2. “I OWN A HOME WITH A MORTGAGE, AND I WANT TO RENT IT OUT AND BUY A MANUFACTURED HOME AND GET A LOAN FOR IT”
It’s long been a FannieMae guideline to accept rental income and deduct part of that income from the borrower’s debt ratio. A few strict rules apply here.
Our lenders will, from time to time, accept rental income on mortgaged properties as qualifying income. However, the rental income has to be documented with at least two years’ of tax returns. Only 70% of the rental income, after expenses, will count as qualifying income when computing the borrower’s debt ratio. Most of the time, the homeowners are in the red and don’t realize it. If a house rents for $1200/month, and the mortgage payment is $1200/month, then the mortgage payment is not “covered”.
3. “I WANT TO BUY A MANUFACTURED HOME FOR A FAMILY MEMBER AND FINANCE IT”
This is what the industry calls a “buy-for” transaction. Good luck getting the LL community manager to agree to this. Most LLC’s do not allow non-owner-occupied homes.
As far as lending, there is one lender in our industry that will consider “buy-for’s” on a case-by-case basis. The home needs to be 1991 or newer, with a maximum loan of $75,000, and a very strong co-signor. This lender prefers the co-signor to be an immediate family member, and they will have to nearly “walk on water” credit-wise to get loan approval.
Loans that are less than 100% full-time owner-occupied are considered to be the highest risk category of loan for the chattel lenders. They are so paranoid that one of our lender’s underwriters now routinely makes phone calls to the applicants BEFORE making a credit decision, just to make sure that all people on the loan application intend to live in the manufactured home that they are borrowing money for. Exceptions are made for “vacation properties”. But forget about buying a manufactured home, financing it, and renting it out, even if the home is with owned land. The land/home lenders are equally as strict on these matters.
4. “I WANT TO BORROW THE DOWN PAYMENT”
As I have mentioned in past columns, down payment funds must be true equity, free and clear of encumbrances. Preferrably, the entire down payment should be the borrower’s life savings. This is the “glue” that holds the buyer to the asset, making it less likely that they will turn their back on the house if the have a bad year.
Family members may gift part of the down, or in some cases, all of the down. The gift provider will have to provide bank statements and sign a gift letter. With one lender in our industry, the gift provider will have to send the loan officer additional bank statements showing the funds being transferred from the gift provider, and the gift recipient will have to provide a bank statement showing that they received the funds. This is called “paper trail”. This is to rule out any possibility that any part of the down payment was snuck in via a credit card cash advance, and disguised as a gift from a family member. This would be considered a fraudulent transaction, and any loan originator who goes along with this and gets caught will be immediately unemployed and unemployable in this industry.
5. “I HAVE INCOME BUT NO CREDIT, BUT MY SPOUSE HAS CREDIT BUT NO INCOME”
As a new loan officer, I sent in several applications of husband-wife situations with one spouse with good credit and no income, and the other spouse with high income and no credit, or bad credit. The applications got declined.
Underwriters will NOT accept a co-applicant’s income unless it is backed up by strong credit report. If one spouse has enough income on their own, and good credit, then the other spouse can be added to the loan, but their income will not count if they have unacceptable credit.
Quite often, loan officers find themselves giving advice on how to build credit. If the consumers follow the advice, then in a few short years they can turn the situation around and become proud homeowners. Quite often, the consumer is never heard from again. I guess they ignore the advice, keep going down the wrong road, and keep renting……..
Dave Shanklin
NMLS ID # 314463
Mobile Brokers Acceptance
Fair Oaks, CA
800-401-3372
916-962-7128
# # #
Thursday, August 26, 2010
Manufactured Home Lenders No Longer Allowing "Grossing-Up" of Social Security Income
This may be a trend that will expand to the entire mortgage industry: "grossing-up" of retirement benefits no longer allowed!
For years, FannieMae has "allowed" loan originators to "gross-up" Social Security income when filling out 1003's for mortgage applications. And the manufactured home lenders, who finance MH's in parks, have always followed that same guideline. But not any more!
Starting with a major MH lender based in Jacksonville, FL, the new policy is catching on with other banks, and the latest to adopt this guideline is our industry's other major lender headquartered in San Diego.
What is "grossing up"? For example, if a Social Security recipient receives $1,000 per month in SS benefits, then, for the purpose of qualifying the applicant, the loan officer "grosses-up" their net income an extra 25%. Therefore, their net income of $1,000 becomes a "gross" income of $1,250.
FannieMae has allowed this so to create an "even playing field" for loan applicants. Lenders look at the applicant's gross income, not net, when it comes to wage earners and people on salaries. So grossing up income makes the underwriting process a fairer process. "Grossing-up" gives the loan applicant a hypothetical payraise. It's always been allowed by federal regulation, so therefore, is not loan fraud.
Unfortunately, senior citizens, and all receipients of SSI or SDI income, will be at a disadvantage when applying for loans for manufactured homes in parks. This new policy will make it harder to qualify seniors, and that's not good for our industry, in my opinion.
One of the MH lenders is also a MAJOR Fannie/Freddie lender of all types of real estate. It's unclear if this new policy extends to real property loans. My guess is that it will.
Other MAJOR changes coming to the mobile home finance industry daily! Good things, and not so good things.
Stay tuned to my blog.....
Call any time for advice with all phases of manufactured home finance.
Dave Shanklin
800-401-3372, or 916-962-7128
Info@MobileHomeDollars.com
www.MobileBrokers.net
For years, FannieMae has "allowed" loan originators to "gross-up" Social Security income when filling out 1003's for mortgage applications. And the manufactured home lenders, who finance MH's in parks, have always followed that same guideline. But not any more!
Starting with a major MH lender based in Jacksonville, FL, the new policy is catching on with other banks, and the latest to adopt this guideline is our industry's other major lender headquartered in San Diego.
What is "grossing up"? For example, if a Social Security recipient receives $1,000 per month in SS benefits, then, for the purpose of qualifying the applicant, the loan officer "grosses-up" their net income an extra 25%. Therefore, their net income of $1,000 becomes a "gross" income of $1,250.
FannieMae has allowed this so to create an "even playing field" for loan applicants. Lenders look at the applicant's gross income, not net, when it comes to wage earners and people on salaries. So grossing up income makes the underwriting process a fairer process. "Grossing-up" gives the loan applicant a hypothetical payraise. It's always been allowed by federal regulation, so therefore, is not loan fraud.
Unfortunately, senior citizens, and all receipients of SSI or SDI income, will be at a disadvantage when applying for loans for manufactured homes in parks. This new policy will make it harder to qualify seniors, and that's not good for our industry, in my opinion.
One of the MH lenders is also a MAJOR Fannie/Freddie lender of all types of real estate. It's unclear if this new policy extends to real property loans. My guess is that it will.
Other MAJOR changes coming to the mobile home finance industry daily! Good things, and not so good things.
Stay tuned to my blog.....
Call any time for advice with all phases of manufactured home finance.
Dave Shanklin
800-401-3372, or 916-962-7128
Info@MobileHomeDollars.com
www.MobileBrokers.net
Tuesday, August 24, 2010
Major Mobile Home Lender Announces Record-Low Interest Rates for Manufactured Homes in Parks
5.99%.....7-YEAR LOAN....
1977 & NEWER MANUFACTURED HOMES IN PARKS
700+ FICO , 10% DOWN MINIMUM
Wow! Fantastic headlines!
If I had read this a few years ago, I would say that the story was a total lie!
But it is reality!
My "main" lender, which is a national credit union, has announced a loan special that is designed for the "lower" priced manufactured homes in parks. This special rate expires Dec. 31, 2010.
Why is this happening? Several new bank have entered the MH chattel finance business. In other words, we have several new lenders offering loans for manufactured and mobile homes in parks. With more lenders entering the field, we are seeing rates drop....and drop....and drop!
Stay tuned in to the blog and find out the latest news. More news coming!
Call any time for advice with your manufactured home transaction.
Dave Shanklin, Loan Agent
MLS ID # 314463
Mobile Brokers Acceptance
Fair Oaks, CA
800-401-3372, or 916-962-7128
1977 & NEWER MANUFACTURED HOMES IN PARKS
700+ FICO , 10% DOWN MINIMUM
Wow! Fantastic headlines!
If I had read this a few years ago, I would say that the story was a total lie!
But it is reality!
My "main" lender, which is a national credit union, has announced a loan special that is designed for the "lower" priced manufactured homes in parks. This special rate expires Dec. 31, 2010.
Why is this happening? Several new bank have entered the MH chattel finance business. In other words, we have several new lenders offering loans for manufactured and mobile homes in parks. With more lenders entering the field, we are seeing rates drop....and drop....and drop!
Stay tuned in to the blog and find out the latest news. More news coming!
Call any time for advice with your manufactured home transaction.
Dave Shanklin, Loan Agent
MLS ID # 314463
Mobile Brokers Acceptance
Fair Oaks, CA
800-401-3372, or 916-962-7128
Monday, August 23, 2010
Mobile Home Loans Still Offered by CalVet, but Guidelines have Changed
CalVet has always been a good provider of financing for manufactured homes in parks. Their rates, terms, and qualifying criteria have been very favorable for years.
Frequently, I have referred veterans to CalVet. Whenever a veteran asks about finacing for veterans, that's what I do. Give them CalVet's phone number.
In the past, their minimum age of a manufactured home has been 20 years, and still is. And their minimum down payment used to be only 3%, and their "floor rate" used to be 6.25%. Fantastic rates and terms that were very competitive, and virtually no bank in CA could ever beat their terms.
Until recently.
Two weeks ago, I placed a call to CalVet, not for the purpose of snooping, to to make sure that I was giving out the right phone number to our veterans.
The person at CalVet that I spoke to told me, without my asking, their NEW minimum terms, which have changed dramatically.
They are still financing purchases of manufactured homes in parks, under 20 years old.
However, they now require a MINIMUM DOWN PAYMENT OF 15%....AND THEIR NEW "FLOOR RATE" IS 7.75%.
This is a big change from their previous guidlines that they've had for so many years.
In the future, whenever a loan applicant who has worn the uniform of our country asks for CalVet or "veterans financing", I will continue to refer them to CalVet. By the way, CalVet's phone number is: 800-952-5626.
Call any time for advice with manufactured home transactions.
800-401-3372
Frequently, I have referred veterans to CalVet. Whenever a veteran asks about finacing for veterans, that's what I do. Give them CalVet's phone number.
In the past, their minimum age of a manufactured home has been 20 years, and still is. And their minimum down payment used to be only 3%, and their "floor rate" used to be 6.25%. Fantastic rates and terms that were very competitive, and virtually no bank in CA could ever beat their terms.
Until recently.
Two weeks ago, I placed a call to CalVet, not for the purpose of snooping, to to make sure that I was giving out the right phone number to our veterans.
The person at CalVet that I spoke to told me, without my asking, their NEW minimum terms, which have changed dramatically.
They are still financing purchases of manufactured homes in parks, under 20 years old.
However, they now require a MINIMUM DOWN PAYMENT OF 15%....AND THEIR NEW "FLOOR RATE" IS 7.75%.
This is a big change from their previous guidlines that they've had for so many years.
In the future, whenever a loan applicant who has worn the uniform of our country asks for CalVet or "veterans financing", I will continue to refer them to CalVet. By the way, CalVet's phone number is: 800-952-5626.
Call any time for advice with manufactured home transactions.
800-401-3372
Wednesday, July 28, 2010
Two New Banks Want to Lend $4 Million per Month in Mobile Home Parks
One of my loan reps called me today, saying that his company is "talking" with two new banks who want to lend $4 million per month in mobile home parks.
Now these banks are IN ADDITION to the other new lenders that I have written about recently.
The other new lenders that I have recently mentioned are a credit union in Oregon, and the other is one of the largest banks in the U.S.
The two "new" lenders remain anonymous for now, but I will know their identities pretty soon. These details are kept confidential while negotiations are underway between the company that underwrites and sells the loan, and the actual investors themselves.
The new credit union in Oregon supposedly will be "on-line" next week, and the really good news about this is this credit union will have very competitive rates.
What does all this mean? I interpret these developments as evidence that things are opening up with the manufactured home in-park investors.
With more and more banks in this field, I expect to see much lower rates in the near future. We'll see.
Call any time to discuss manufactured home lending.
1-800-401-3372.
Now these banks are IN ADDITION to the other new lenders that I have written about recently.
The other new lenders that I have recently mentioned are a credit union in Oregon, and the other is one of the largest banks in the U.S.
The two "new" lenders remain anonymous for now, but I will know their identities pretty soon. These details are kept confidential while negotiations are underway between the company that underwrites and sells the loan, and the actual investors themselves.
The new credit union in Oregon supposedly will be "on-line" next week, and the really good news about this is this credit union will have very competitive rates.
What does all this mean? I interpret these developments as evidence that things are opening up with the manufactured home in-park investors.
With more and more banks in this field, I expect to see much lower rates in the near future. We'll see.
Call any time to discuss manufactured home lending.
1-800-401-3372.
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