Title Companies and Lenders – Is This Familiar?
Does just hearing the words “manufactured home” or “mobile home” make you cringe? Are you tired of dealing with the Department of Housing and Community Development? Does your mobile home title work get kicked back even though you followed instructions exactly? Do you enjoy endlessly fighting with previous lenders for titles or lien satisfactions? How many hours of your life have you wasted standing in line at the DMV? Do your sellers really have titles? Are they still in some dead guy’s name from three sales ago?
If you are a Title Company, the manufactured home may have never been transferred into your seller’s name or been detitled. Yikes, it may still be in the name of the third owner back, or in the deceased mother’s name, or in the name of the bank that foreclosed it six years ago, or in the ex-husband’s name who is now in jail.
If you are a Lender, one of your primary concerns with manufactured homes must be whether the settlement agency will make certain that your lien is perfected and that your security interest in the mobile home title is protected. Sadly in this environment, you need to take the approach: “Close ’em so you can foreclose ’em.” Title companies, as a rule, excel at closing land deals and often forget that the manufactured home titling process is another layer of the loan.
OnTheLevel can team with you to avoid the manufactured home madness. Unless there is a recorded 413, 433A or 433C on the property, the home is titled as personal property and the process of detitling must occur in order to meet the ALTA 7 requirements. If it is determined on the front end that no such recorded documents exist, we can immediately run a title search with the Department of Housing and Community Development (HCD) and determine what will be needed to meet the ALTA 7 requirements. We can then present the options for resolution, whether it is simply administrative paperwork or working with the requisite building jurisdictions to install a permanent foundation to get a 433A. In 433A transactions, we will provide you a copy of the recorded 433A document so you can present your loan documents for signing. Then as a post-funding condition, we will finish the detitling with Sacramento. We can assess the cost for services at the front end so the loan officer can include on the Good Faith Estimate. The costs can range from moderate for an administrative service to pricey if a foundation installation will also be required. All costs can be included on the HUD-1.
Real Estate and Foreclosure Attorneys
Manufactured homes have been transferred incorrectly done for years. In many case the land is owned by one individual and the home in another as escrow companies often forgot about detitling the home and conjoining home and land, therefore making foreclosure impossible. Manufactured homes must be handled differently than regular homes as they are the only form of housing that can be titled as either personal or real property. Since all homes installed since 1980 have a separate Assessor’s Parcel Number, many homeowners, escrow companies, and lenders etc. have inferred if the home has an APN, then it is real property. Wrong! Unless there is a recorded 433A or 433C, the home remains personal property. Even then, these instruments, while they show the intent to convey title, do not actually transfer the title. That can only be done by following proper procedures and transferring the mobile home titles through the DMV (except in the very rare case where a title has been retired).