Retain and Pay Mobile Home

TeddyJohn

LoanSafe Member
Jun 29, 2013
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I had a chapter 7 bankruptcy in 2001. At that time we only wanted to discharge credit card and personal loans. The bankruptcy lawyer told us we could exempt our land, mobile home, and vehicles which we did. We got reaffirmation on everything but the mobile home loan. We were told that as long as I made the payments on time and kept the insurance and taxes paid, we could keep it. What they did not tell me was that loan would be discharged with everything else. I also learned many years later that even though the loan was discharged, the lender still had the lien on the title. The original loan amount was 72,000 and the loan has been transferred twice since the bankruptcy. I have paid 112,000 on this mobile home and after 15 years of paying on time, I still owe 62,000 on the principle. Although I am not liable for the note and if I walk away, they still hold the title to the mobile home. It is on land that I own and once moved, will never sell for what is owed on it. I guess my question is, if I did walk away, would this still be a foreclosure? or a repossession on my otherwise perfect record?
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
10,541
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Colorado
www.loansafe.org
I had a chapter 7 bankruptcy in 2001. At that time we only wanted to discharge credit card and personal loans. The bankruptcy lawyer told us we could exempt our land, mobile home, and vehicles which we did. We got reaffirmation on everything but the mobile home loan. We were told that as long as I made the payments on time and kept the insurance and taxes paid, we could keep it. What they did not tell me was that loan would be discharged with everything else. I also learned many years later that even though the loan was discharged, the lender still had the lien on the title. The original loan amount was 72,000 and the loan has been transferred twice since the bankruptcy. I have paid 112,000 on this mobile home and after 15 years of paying on time, I still owe 62,000 on the principle. Although I am not liable for the note and if I walk away, they still hold the title to the mobile home. It is on land that I own and once moved, will never sell for what is owed on it. I guess my question is, if I did walk away, would this still be a foreclosure? or a repossession on my otherwise perfect record?
Welcome to the forum and thank you for joining..............

If you have received your Chapter 7 discharge and you did not reaffirm your mortgage, and now you want to walk away from a property that you have lived in under an informal “stay and pay” arrangement, you may want to speak with your bankruptcy attorney to ask for advice about possible issues, both as a matter of contract liability and as to your credit.
 

TeddyJohn

LoanSafe Member
Jun 29, 2013
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Thanks Cat, I already know my contract liabilities. As far as my credit, I have been pre approved for another home. What I'm trying to get a straight answer to is, since a lender does not have to go through foreclosure procedures to take possession of a mobile home, and can come onto a property without notice and repossess it, then how can it still be considered a foreclosure?
 

TeddyJohn

LoanSafe Member
Jun 29, 2013
5
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Thanks Cat, I already know my contract liabilities. As far as my credit, I have been pre approved for another home. What I'm trying to get a straight answer to is, since a lender does not have to go through foreclosure procedures to take possession of a mobile home, and can come onto a property without notice and repossess it, then how can it still be considered a foreclosure?
Especially if a payment has never been late and the lender is notified to take it back. (voluntary repossession)
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
10,541
39
48
Colorado
www.loansafe.org
Thanks Cat, I already know my contract liabilities. As far as my credit, I have been pre approved for another home. What I'm trying to get a straight answer to is, since a lender does not have to go through foreclosure procedures to take possession of a mobile home, and can come onto a property without notice and repossess it, then how can it still be considered a foreclosure?
Which is why you should speak to an attorney, if not the BK attorney, then a Real Estate Foreclosure attorney in your state. I was unable to find any members that are in a similar situation here on the forum to see how they have handled it.
 

MsPetiteMN

LoanSafe Member
Feb 7, 2012
93
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6
T What I'm trying to get a straight answer to is, since a lender does not have to go through foreclosure procedures to take possession of a mobile home, and can come onto a property without notice and repossess it, then how can it still be considered a foreclosure?
Most states have a process called "self help" repossession, but there are a handful which require the lender to obtain judgment for possession to repossess the home. In the self help repossession process, the lender will send out an NOD. If it is not cured, then they send out a Notice of Private Sale (called different things in different states...this process is State-specific) which gives the borrower a certain number of days to reinstate the loan. If the loan is not reinstated, then the home is considered repossessed and the borrower is no longer the titled owner.

However, many factors come into play as to whether a lender will actually take possession. If the home is older, not in great condition, and may not be easy to wholesale, they may not choose to take possession...leaving the titled owner...the borrower....to pay the taxes, ins, lot rent, etc.

Lenders are not legally obligated to repossess manufactured homes; it is a financial decision whether they do so or not. However, you will receive notice prior to them repossessing your home. Who told you that you would not receive any notice?
 

TeddyJohn

LoanSafe Member
Jun 29, 2013
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I spoke to an attorney here in Texas and he told me that because I was so upside down on my mobile home, it was unlikely I would sell it (even with my land) for what is owed on it. He said my best option would be to call the lender and tell them I am planning to move and if they send me the application for the title transfer, I will sign it thus surrendering the title which will satisfy the lien. He also said that since my bankruptcy discharged my personal liability and I am not in default, a voluntary surrender to satisfy the lien would not have any impact on my credit. He could not see any reason why a lender would not go ahead with a loan. This scenario would allow me to suspend my payments and have the funds available for the new loan.
 

MsPetiteMN

LoanSafe Member
Feb 7, 2012
93
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6
So was the land used to secure your loan for the manufactured home? Is your manufactured home de-titled?
 

TeddyJohn

LoanSafe Member
Jun 29, 2013
5
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0
So was the land used to secure your loan for the manufactured home? Is your manufactured home de-titled?
No. The land is mine. I don't know what you mean by de-titled. The lender has a lien on the title to secure the loan. If I sign over the title to the lender, that will satisfy the lien. Since there was no reaffirmation in the bankruptcy, I am not personally responsible for any deficiency.
 

MsPetiteMN

LoanSafe Member
Feb 7, 2012
93
0
6
No. The land is mine. I don't know what you mean by de-titled. The lender has a lien on the title to secure the loan. If I sign over the title to the lender, that will satisfy the lien. Since there was no reaffirmation in the bankruptcy, I am not personally responsible for any deficiency.
You cannot force them to take ownership by just signing the title over. Unless the lien is legally removed (ie..transferring the title and paying the fee at the Dept of Motor Vehicle..or whoever is the state agency responsible for issuing MH titles) you will still be the titled owner. Now, they may let you voluntarily surrender the home so they can take possession and sell it. But if the home is not worth much or will cost too much to wholesale and move off your property, they may not take ownership.

What yr is your home? Single or double wide? Any past due taxes owed on it?