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 owdener 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).

Effective Ideas for Bathroom Remodels

In this economy, many people are making the wise decision to improve their existing home as opposed to taking on the risk of another, larger mortgage.  One of the rooms in any home that provides an easy outlet for these improvements is the bathroom.  Remodels to this area of the house may seem simple, but there is nothing simple or easy when it comes to remodeling.  San Diego is a market with many options in this regard, but below you’ll find some basic ideas regarding San Diego bathroom remodels that could help you get started.

Plan from Start to Finish

Many people who have the idea to rework their bathrooms simply get started without thinking the entire process through to completion.  Simply put, this can lead to an endless phase of remodeling.  San Diego homes tend to be built with a specific plan, and this same level of planning should be done in regards to this bathroom project.  Working through a plan will help you keep your focus on the ultimate goal as opposed to getting bogged down in the details.

Shop and Price

Before you decide which products to purchase for your project, you need to take some time to shop and price the goods you’ll need for the remodeling.  San Diego offers a plethora of options, and you can save hundreds of dollars if not more if you find the right materials for the right price.

Look Around

It’s likely that your idea to get into the world of bathroom remodels came from a specific inspiration.  Perhaps you saw a bathroom that you really liked and would like to emulate the look and/or style.  However, if you simply think that this would be a good project to take on, spend some time looking around to find out what you think would work well within your bathroom and your home overall.

Seek the Vision of a Professional

Finally, you should take some time to speak to a professional who has experience with bathroom remodels.  This step can also help remove some of the stress that comes with the uncertainty of remodeling.  San Diego is a market that Chad of All Trades, Inc. has been serving for years, so contact the company today to schedule an initial consultation.  If nothing else, you’ll get some ideas and concepts you can use and you could wind up having your plans and ideas reinforced by someone who has helped countless people in the area successfully complete San Diego bathroom remodels.  Contact Chad of All Trades, Inc. today.

Chad Arendsen is a third generation general contractor in San Diego. Since 2000, Chad of All Trades, Inc. has been serving North San Diego in all facets of residential and commercial construction. We are All Trades. Visit them at: http://www.chadofalltrades.com/

Part II of a Three Part Series

In Series Number One, we reviewed the merits of the Good Faith Estimate and its value to the borrower for transparent disclosure of facts and figures.     In the Part Two, we need to address the “service” aspect of the Real Estate Settlement Procedures Act.

When you apply for a home mortgage, you may think that the lender, or loan originator, will service the loan until it is paid off or your house is sold. However, in today’s market mortgage, servicing rights often are bought and sold. The Real Estate Settlement Procedures Act (RESPA) is a consumer protection statute which affords you certain disclosures and strategies for problem resolution with your mortgage and/or escrow account.

Duty of Loan Servicer to Respond to Complaints. If you have questions or problems with the servicing of your loan, the servicer is required to respond to you. Write to your servicer and call it a “qualified written request under Section 6 of RESPA.” It should be a separate letter and not mailed with your payment. The mortgage servicer must                respond to you within 60 business days of receipt.

A Sample Complaint Letter would include the following because the specifics are important:
Attention Customer Service:

Subject: [Your loan number]
[Names on loan documents]
[Property and/or mailing address]

This is a “qualified written request” under Section 6 of the Real Estate Settlement Procedures Act (RESPA).

I am writing because:

• Describe the issue or the question you have and/or what action you believe the lender should take.
• Attach copies of any related written materials.
• Describe any conversations with customer service regarding the issue and to whom you spoke.
• Describe any previous steps you have taken or attempts to resolve the issue.
• List a day time telephone number in case a customer service representative wishes to contact you.
• I understand that under Section 6 of RESPA you are required to acknowledge my request within 20 business days and must try to resolve the issue within 60 business days.

Sincerely,

[Your name]

REMEMBER: This letter SHOULD NOT be included with your mortgage payment, but should be sent separately to the customer service address.

And, it is very important that you continue to make the required mortgage and escrow payment until the request is resolved.

Loan Transferred to New Servicer. Your loan servicer is required to notify you in writing at least 15 days before the servicing of your loan is transferred to a new servicer. The notice must include the following information:

* The effective date of the transfer, the date your current servicer will stop accepting payments and the date the new servicer will begin accepting them.
* The name, address, and toll-free or collect call telephone number for the new servicer.
* Information that tells whether you can continue any optional insurance, such as mortgage life or disability insurance, and what action, if any, you must take to maintain coverage.
* A statement that the transfer of servicing does not affect any term or condition of your mortgage documents other than the terms directly related to the servicing of the loan.

Treatment of Payments During Transfer Period. During the 60-day period beginning on the effective date of the transfer, the payment may not be treated as late if you mistakenly send it to the old mortgage servicer instead of the new one.

Escrow Account. RESPA does not require that you maintain an escrow account for the purpose of paying property taxes, hazard insurance, etc. Nor does RESPA have any jurisdiction over the decision of the lender or servicer to require or terminate an escrow account. RESPA does, however, provide you with the following protections with regard to the escrow account:

• If your lender or mortgage servicer requires you to maintain an escrow account for the purpose of paying property taxes, hazard insurance, etc., RESPA requires that the servicer pay such items by the dates due to avoid a penalty or late charge.
• RESPA sets limits on the maximum amount of money the servicer may require you to maintain and pay in the escrow account. (More information about escrow accounts, including how to calculate the maximum amount RESPA allows the lender to require in the escrow account.)

Multistate Home Lending www.multistatehomelending.com and The Manufactured Home Lending Source www.mh-lending.com are committed to full and complete disclosure. All of our loan officers are registered with the Nationwide Mortgage Licensing System and Registry (Registry), a database established by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators to support the licensing of mortgage loan originators by the States. As part of this registration process, mortgage loan originators must furnish to the Registry background information and fingerprints for a background check. The S.A.F.E. Act generally prohibits employees of an agency-regulated institution from originating residential mortgage loans without first registering with the Registry.

To Cert or Not to Cert? Our Opinion—Not So Fast

I am a female manufactured home contractor specializing in manufactured home foundation repair. It’s not the most glamorous job in the world and mainly consists of crawling underneath the darkside of people’s homes, often in claustrophobic tight conditions and in poor air circulation environments. Some manufactured homes are set in a pit to give an attractive low profile curb appeal, much like a site built home. Others are installed above ground and some even on full basement. On the subset types, there’s not a lot of room for the configuration of the female form to navigate easily from one end of the home to the other. While trying to do the military crawl underneath, my bottom inevitably pops up and then when I try to balance out, my head often jerks up and whamm—straight into the I-beam. My male co-workers find this particularly funny and when they hear my yelps as my body parts bang and clang against metal, I hear uncontrollable laughter. Fortunately YouTube has yet to find me underneath the dank and dirty world that is the manufactured home contractor’s domain. Believe me, we see it all, spiders, snakes, rats, centipedes, scorpions, dead carcasses (cats, rats, bunnies, and yes even a coyotes) not to mention standing water, sewer leaks, falling insulation, splitting marriage lines, overextended screw jacks, shifting or compromised supports. I have yet to find any buried treasure but we frequently find several cases of empty beer cans which may be the reason many of the homes we work on seem to be set up off kilter right from the beginning.

Having worked in the business for twenty some years, we have striven to maintain our business model as closely associated with the name of our company, On The Level, as possible and have tried to avoid the trampy style of some of our competition who frighten the mobilehome senior market with scare tactics,convincing widows to buy overpriced “earthquake bracing”, locktops, or “marriage rods. In most cases, these products were unnecessary or unpermitted and a waste of homeowner’s money.

And yet necessary upgrades for manufactured home foundations suddenly made an appearance when the lending market (specifically FHA and VA Loans) imposed foundation standards for permanent attachment in order to meet loan criteria. Without an engineer’s certification proving that the manufactured home’s foundation met FHA-insured standards (THE PERMANENT FOUNDATION GUIDE FOR MANUFACTURED HOMES, HUD 1996) , an FHA or VA loan could not move forward. The good news is that there are dozens of state-certified alternate and pre-fabricated systems available in the marketplace so that a home can have foundation repairs without having to renovate the entire understructure.

While the foundation standard is defined in the HUD Permanent Foundation Handbook, the problem is that individual states have divergent installation, titling, and real property provisions so each home must be evaluated on a case-by-case basis. But as a company, On The Level does not stop at the evaluation of just the foundation. It is our opinion that a foundation certification is NOT a stand-alone document. Proving that the foundation is compliant should NOT be the first step on the long laundry list of conditions. IT SHOULD BE THE LAST CONDITION! Let me explain, in many cases, we have evaluated the foundation and we know it can certify or it will certify with a retrofit but we refuse to move forward with the actual letter. Why? Our competition takes the attitude that they are only being hired to assess the foundation so that’s what they do: assess the foundation in a vacumn irrespective of other data, then they write a pass or fail certification, and take the money and run. So what if a $3000 retrofit could potentially kill the loan? Who cares if there is evidence that the home was moved from another location? Who cares if the home is located in a flood plain? Who cares if the home doesn’t have HUD tags? That’s not the engineer’s or retrofitter’s job, right? The engineer only needs to write a determination of the foundation itself. End of story.

We disagree. My point is that this is state-by-state tricky wicket. In most cases, I’ll get a demand from an enthusiastic loan officer, “I just need the cert”. When I say, “Not so fast—our research shows issues in other areas”, I think most of them think we are trying to drag our feet. Not true! It is our policy as a company never to charge for a failed foundation inspection report—we only charge the borrower or lender once a foundation report certifies that the foundation meets the PERMANENT FOUNDATION GUIDE FOR MANUFACTURED HOMES, HUD 1996.

We provide a one-stop shop for borrowers, lenders, processors to get nationwide engineer’s certifications quickly and accurately. No charges for failed reports EVER!!!! www.onthelevelcontractors.com

And if you don’t have a lender, a manufactured home loan specialist: www.mh-lending.com

Finding the right lender

Fair or unfair to manufactured home borrowers, most lenders view manufactured homes with derision. We’ve all heard the term —trailer trash—well that’s how most lenders continue to characterize the manufactured home loan. Without owning the land, the manufactured home is pigeon-holed into a high percentage rate personal property loan. Even when the home sits on real property, the stigma persists in the minds of lenders that a homeowner will pull up his 5th wheel, hitch up the home, pull up stakes, and disappear down the road in the middle of the night – leaving the investor, high and dry. Although the portrait being portrayed treads on the side of ridiculous, the real concern for the lender is not only dismissing the above stigma, but how a simple classification of titling can significantly alter an investor’s mentality from “trailer” to legitimate dwelling.

Fortunately, FHA-insured loans are improving their visibility with many mortgage brokers. In many respects, they seem to rank among the only safe-havens for the manufactured home purchaser or borrower. Furthermore, HUD has created a model that both the lender and transaction coordinator can follow. The need for this type of application stems from the confusion over the fact that manufactured homes are the only type of housing that can be classified either as personal property or real property; and worse, there has been no national consistency for neither titling nor set-up requirements. In some states, manufactured homes were overseen by a transportation agency. Yet in other states – such as California – there exists has always been an authoritative MH housing agency, where others maintain little to no oversight. While HUD has jumped into the picture and requires a national standard for new home installation since January 1, 2009, existing homes are currently in “no-man’s land.”

A primary priority to a lender is that the titling of the manufactured as real property (meaning that the home and land are conjoined as one). This provides the lender – or investor – with security interest on the home. In some states (like California), the classification for a manufactured home as real property requires that the home be installed on a permanent foundation. In other states (like Arizona), the change of titling procedure is a paper-only transaction so there is no requirement for a permanent foundation. Where this becomes a problem is when a borrower needs an FHA-insured loan because HUD requires that the home be set on a permanent foundation. Thus, a licensed engineer must certify the foundation is in compliance with FHA guidelines, or what is commonly referred to as the HUD Handbook. So this begs the question why? The borrower typically proclaims, “When I bought my home, it was approved by the building department and everything has been signed off. Of course, my home will pass otherwise the building department wouldn’t have approved it!” However, building regulations vary from city-to-city and county-to-county, so underwriters, investors and government agencies need a national standard. The approval of a licensed engineer that the home meets the standards detailed in the PERMANENT FOUNDATION GUIDE TO MANUFACTURED HOMES seems to fit the bill.

These are the basics for your home to qualify:

• The manufactured must be a HUD home, which means it must be manufactured after June 15, 1976. If there are metal plates at the rear of the home that begin with a three Alpha letters like CAL, ARZ, ORE, that’s usually a good sign. If the HUD label is missing, usually a label verification letter from the Institute for Building Technology and Safety (IBTS) www.ibts.org giving the provenance of the home will suffice.
• The foundation system must meet the guidelines published in the Permanent Foundations Guide for Manufactured Housing, dated September 1996. A certification attesting to compliance must be obtained from a licensed professional engineer.
• The manufactured home must be classified and taxed as real estate. A long-term lease may also be acceptable in certain instances. States vary on how the real estate classification is accomplished so this is another important aspect to understand.
• The axles and tongues must be removed from the chassis.
• The manufactured home must have an adequate perimeter enclosure with appropriate ventilation.
• The manufactured home must not have been installed or occupied previously at any other site or location.
• Must have a floor area of not less than 400 square feet.
• Built and remains on a permanent chassis.
• The finished grade elevation beneath the manufactured home shall be at or above the 100-year return frequency flood elevation.

If you are in the market for a manufactured home loan and you own your land, it is in your best interest to work with a loan officer that specializes only in the manufactured home loan product. And if you need a professional engineer to evaluate the foundation, you’ll need one that specializes in manufactured homes as well because the HUD Handbook consists of over 400 pages of inconsistency.

If you want a lender that specializes in manufactured homes. www.mh-lending.com

If you want a professional engineer that specializes in manufactured homes www.onthelevelcontractors.com

Most lenders view the manufactured home loan as a “nuisance” loan. No matter what kind of manufactured home you have (even if it has tile roof and drywall interior), you’re going to be lumped into the “trailer” category in the mind of the loan officer. This is just a “loser loan” for him. A lot of work, and not enough commission! Plus there are so many compliance hoops to jump through and the compliance checklist is often daunting to the novice. And for the typical lending office, very rarely do the support staff know what they are doing. The processors don’t even understand the vocabulary much less the fine details, appraisers sometimes submit their data on the wrong form and even underwriters often fail to manage the file properly.

Borrowers complain that a new hiccup appears almost daily—-and the loan seems to take forever. Then there are the fine points of the flood zones, if the home is serviced by wells and septic, finding comparative comps, missing HUD plates, IBTS letters, metes and bounds, missing a data compliance plate, dealer to site verification and the list seems endless. Oh and let’s not forget about the real doozy— the foundation certification.

FHA loans on manufactured homes, whether new construction or existing, new loan or refinance, require an engineer’s stamped certification that the foundation meets the requirements of The Permanent Foundation Guide to Manufactured Housing dated September 1996 (PFGMH) aka THE HUD HANDBOOK /BIBLE.

This is a nightmare for borrowers and lenders because the HUD Handbook is even misunderstood by most engineers. When confronted with a non-compliant foundation, most homeowners say, “But my home met all the local requirements of the building department when I bought it in 1983!” Unfortunately compliance with the local building jurisdiction is not evidence that the home meets the national standard. Because requirements vary from city to county to state, the certification letter establishes some semblance of continuity. Engineers even have conflicting opinions because the handbook is vague, contradictory and very unclear on exactly what is required and what is not permitted. Essentially it is opinion-based and two different engineers can look at the same foundation with different results.

Are your eyes glazed over yet? We won’t even start on the appraisal and all the details associated with that because that would lead to a whole new laundry list of issue. First things, first, if you need a manufactured home loan, make sure your home qualifies:

The basic checklist starts with the following:

• Must have a floor area of not less than 400 square feet. So if you are living in a “park model”, it’s not going to work.
• Must be classified and subject to taxation as real estate.
• Must be built on and remains on a permanent chassis. This means it came in on wheels, but the wheels and axles have to be removed.
• Must be above the 100 year return frequency flood elevation. So if you are living in a flood plain, the loan is probably a no go!
• Must be built after June 15, 1976. The best way to check if you don’t have the paperwork. If you can find 2×4” aluminum plates at the back of your home that start with three letters, followed by 6-7 numbers, this is a good sign!
• The foundation system must meet the guidelines published in the Permanent Foundations Guide for Manufactured Housing, dated September 1996. A certification attesting to compliance must be obtained from a licensed professional engineer. And if your foundation does not meet the requirement, there are ways to make repairs to bring your home in compliance.
• The manufactured home must not have been installed or occupied previously at any other site or location.
• Additions or structural modifications must not put the home at risk.

The next thing you need to do is to team up with a manufactured home loan specialist. The big recognizable name houses are often the very ones that consider your home a “trailer” and don’t have the support staff to take the loan from A to Z with ease. Get straight answers and professional expertise right from the beginning by using a company that has resources in all aspects of manufactured housing.

www.themanufacturedhomelendingsource.com

Reverse Mortgages are becoming popular in America. The U.S. Department of Housing and Urban Development (HUD) created one of the first. HUD’s Reverse Mortgage is a federally-insured private loan, and it’s a safe plan that can give older Americans greater financial security. Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements, and more. You can receive free information about reverse mortgages by calling AARP at: 1-800-209-8085, toll-free. Since your home is probably your largest single investment, it’s smart to know more about reverse mortgages, and decide if one is right for you!

1. What is a reverse mortgage?

A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. HUD’s reverse mortgage provides these benefits, and it is federally-insured as well.

2. Can I qualify for a HUD reverse mortgage?

To be eligible for a HUD reverse mortgage, HUD’s Federal Housing Administration (FHA) requires that the borrower is a homeowner, 62 years of age or older; own your home outright, or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan; and must live in the home. You are further required to receive consumer information from HUD-approved counseling sources prior to obtaining the loan. You can contact the Housing Counseling Clearinghouse on 1-800-569-4287 to obtain the name and telephone number of a HUD-approved counseling agency and a list of FHA approved lenders within your area.

3. Can I apply if I didn’t buy my present house with FHA mortgage insurance?

Yes. It doesn’t matter if you didn’t buy it with an FHA-insured mortgage. Your new HUD reverse mortgage will be a new FHA-insured mortgage loan.

4. What types of homes are eligible?

Your home must be a single family dwelling or a two-to-four unit property that you own and occupy. Townhouses, detached homes, units in condominiums and some manufactured homes are eligible. Condominiums must be FHA-approved. It is possible for individual condominiums units to qualify under the Spot Loan program.

5. What’s the difference between a reverse mortgage and a bank home equity loan?

With a traditional second mortgage, or a home equity line of credit, you must have sufficient income versus debt ratio to qualify for the loan, and you are required to make monthly mortgage payments. The reverse mortgage is different in that it pays you, and is available regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA’s mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow. You don’t make payments, because the loan is not due as long as the house is your principal residence. Like all homeowners, you still are required to pay your real estate taxes and other conventional payments like utilities, but with an FHA-insured HUD Reverse Mortgage, you cannot be foreclosed or forced to vacate your house because you “missed your mortgage payment.”

6. Can the lender take my home away if I outlive the loan?

No! You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keeps the taxes and insurance current. You can never owe more than your home’s value.

7. Will I still have an estate that I can leave to my heirs?

When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to you or to your heirs. None of your other assets will be affected by HUD’s reverse mortgage loan. This debt will never be passed along to the estate or heirs.

8. How much money can I get from my home?

The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA’s mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.

9. Should I use an estate planning service to find a reverse mortgage?

I’ve been contacted by a firm that will give me the name of a lender for a “small percentage” of the loan? HUD does NOT recommend using an estate planning service, or any service that charges a fee just for referring a borrower to a lender! HUD provides this information without cost, and HUD-approved housing counseling agencies are available for free, or at minimal cost, to provide information, counseling, and free referral to a list of HUD-approved lenders. Call 1-800-569-4287, toll-free, for the name and location of a HUD-approved housing counseling agency near you.

10. How do I receive my payments?

You have five options:

* Tenure – equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
* Term – equal monthly payments for a fixed period of months selected.
* Line of Credit – unscheduled payments or in installments, at times and in amounts of borrower’s choosing until the line of credit is exhausted.
* Modified Tenure – combination of line of credit with monthly payments for as long as the borrower remains in the home.
* Modified Term – combination of line of credit with monthly payments for a fixed period of months selected by the borrower.

Source: http://www.hud.gov/offices/hsg/sfh/hecm/rmtopten.cfm

Reverse Mortgage

Senior Mobile Home OwnersHere is a great solution for Seniors who own manufactured/mobile homes and are having financial difficulty, looking for way to combat the increasing cost of living, or for those who would just like to have some additional resources to enjoy retirement, the Reverse Mortgage is a product that could be an advantage.

A Reverse Mortgage is a loan that is guaranteed by the FHA for manufactured homes, but is different from a standard equity line in that:

* The age of the youngest borrower must be at least 62 or above.

* There is never a monthly payment as long as you live in the home. The loan is repaid from the proceeds of the sale of the manufactured or mobile home, or through other means, but only when the home is no longer the primary residence of the homeowner. Heirs or beneficiaries are never responsible for the loan.

* There are no income, medical, or credit requirements.

For manufactured homes, the borrower is required to have their home on a permanent foundation system. The requirements can vary state by state. For instance, in California, in addition to meeting the HUD PERMANENT FOUNDATION GUIDE FOR MANUFACTURED HOMES, 1996 and being certified by an engineer, the home must also have a recorded 433A, showing that the home also meets the State requirements. On The Level www.onthelevelcontractors.com can assist both in the retrofit and engineer’s certification process nationwide with some exceptions.

OnTheLevel, specializes in servicing, repairing and upgrading manufactured home foundations as well as expediting engineer’s certifications for FHA-insured loans. From the recalibration of the home’s existing structural support units to more comprehensive foundation retrofitting when enhanced design criteria are needed to meet wind, seismic, weight and snow load requirements to satisfy either the building department or lending requirements, OnTheLevel offers turn-key solutions.

Have you been sticking your nose up at the manufactured home borrower? Like it or not, with the increasing popularity of the Reverse Mortgage loan product for the mature borrower, loan officers and processors are dealing with more and more manufactured homes in their portfolios. It makes sense when one realizes that seniors have chosen to congregate in the manufactured home park setting as a retirement oasis, offering the amenities of security, recreation and a sense of community. The concentration of an active senior population in a close-knit living atmosphere naturally lends itself well to word-of-mouth advertising for the Reverse Mortgage industry. And now with the recent passage of H.R. 3221 , the housing stimulus bill signed into law on by President Bush, you can count on the numbers of manufactured home loans increasing.Why? Thousands and thousands of manufactured homeowners have been disenfranchised from the FHA-insured loan process by a fluke in the statute and manner in which their community was legally constructed. If the description on land and title documents state a manufactured home is in a condominium manufactured home community, these borrowers have been ostracized from the Reverse Mortgage opportunity. By organizing the park development under the condominium aegis, regulators interpreted that a resident’s ownership was confined to airspace only when residents protested that they clearly owned their individual deeded plots. The narrow legal interpretation of a manufactured home situated in communities classified as condos ironically excluded some of the highest quality senior developments. These parks often boast of vibrant recreational facilities, in some cases golf courses and a strong management or homeowner’s association with an overseeing architectural committee. Because of the commanding oversight presence, the price of admission to such a development in turn creates a strong pride of ownership; expectation of upkeep and a more robust sales market keeps appraisal values localized and current.

Fortunately, in addition to all the other more-loudly trumpeted issues in the bill, less well known is the fact that the passage of H.R. 3221 has now eliminated the manufactured home condo discrimination. The inclusion of manufactured housing as a component of the bill was largely due to the grassroots efforts of manufactured home residents themselves who actively cajoled their legislators with letter-writing campaigns and petitions, pleas to AARP, or they even joined lobbying groups to show their support, virtually demanding that they be able to receive the benefits of a Reverse Mortgage. In many cases, these seniors are already Reverse Mortgage devotees since they had friends in neighboring manufactured home communities with acceptable designations for FHA insurance: Planned Unit Developments (PUDS) and Subdivisions. Knowing that this is a unique case where demand for the product precedes the opportunity for access, I don’t think I exaggerate when I say “Katy, bar the doors!”

The point is if you haven’t dipped your feet in the manufactured home Reverse Mortgage pool of loans, you should think about sticking your toes in sooner rather than later. The good news is you have some time to school yourself on the unique properties of manufactured home loans and to tighten the logistics within your processing department. According to Daniel Mooney (Underwriter ?HECM Coordinator? Processing & Underwriting Division? Santa Ana Homeownership Center,?Federal Housing Administration) “while the new statute allows for FHA to promulgate regulatory changes and policy revisions that will enable us to insure loans secured by manufactured homes located in condominiums, said new policies have not been enacted/promulgated. I would anticipate a period of several months (as in six to nine) before FHA is actually able to institute policies and procedures relevant to the issue at hand”. Knowing you have a window of time before all the gears are running, you can acclimate yourself to the water conditions. In my book, this is the best time to get your feet wet and set up some in house policies. One of the reasons many brokers and processors bemoan the manufactured home loan is that it comes with its own set of obstacles. Lack of proper information and a disorganized processing strategy often creates dissention between the borrower and the lender and the lender comes out the loser, looking unprofessional and unknowledgeable. If you follow a few ground rules and recognize that the community camaraderie can provide the service –oriented loan officer with a wealth of referral leads, it may be worth the extra time to troubleshoot some of the idiosyncrasies of the manufactured home.

When you go to research a piece of real estate, you can usually access it by address, assessor’s parcel number, legal description or all of the above. However, even if a manufactured home sits on a piece of realty and shares the features of the real property, it is still distinguished by its HUD label (an affixed HUD Seal (tag/label) located on the outside of the home. Many people ask, if the home is on real property and is being assessed as real property, then why would a HUD tag be of continuing importance? Even when a manufactured home is converted to real property, it doesn’t remove the fact that the home is still a manufactured home. The provenance of any HUD home and its factory design and engineering requirements are traceable through the individual HUD label. For appraisal and lending purposes, code should follow code so appraisers and engineers certifying a home for a manufactured home loan need to specifically identify the HUD numbers in their reports. Additionally, building departments utilize the HUD label as the format for the permit process because it allows the home to preempt the local building codes. If for any reason the labels are missing, appraisers will often reject the property and refuse to proceed until documentation is provided, building departments will refuse to issue certain and in some states a manufactured home may not be re-sold if missing a label and an engineer should not proceed with a HUD foundation without being able to prove that the home itself is in fact a HUD home.

Certain criteria are absolutes to follow for an FHA-insured loan on a manufactured home loan. These are:

1. The manufactured must be a HUD home, which means it must be manufactured after June 15, 1976. If there are metal plates at the rear of the home that begin with a three Alpha letters like CAL, ARZ, ORE, that’s usually a good sign. If the HUD label is missing, usually a label verification letter from the Institute for Building Technology and Safety (IBTS) www.ibts.com Which will give the provenance of the home will suffice.
2. The manufactured home must be classified and taxed as real estate. A long-term lease may also be acceptable in certain instances. States vary on how the real estate classification is accomplished so this is another important aspect to understand.
3. The axles and tongues must be removed from the chassis.
4. The manufactured home must have an adequate perimeter enclosure with appropriate ventilation.
5. Must have a floor area of not less than 400 square feet
6. Built and remains on a permanent chassis.
7. The finished grade elevation beneath the manufactured home shall be at or above the 100-year return frequency flood elevation.
8. The home must sit on a permanent foundation and must have a professional engineer certify that the foundation meets the PERMANENT FOUNDATION GUIDE TO MANUFACTURED HOMES (PFGMH) HUD-7584, dated September 1996.

If the loan officer or processor has never previously expedited a manufactured home transaction, this last requirement can upset the whole apple cart. By not anticipating this, the 11th hour underwriting condition will give a processor fits trying to find a qualified engineer that understands manufactured housing. Potentially there is an even worse scenario. Occasionally the engineer makes the determination that the foundation will not meet the HUD guidelines and a repair or retrofit will be required. If the loan officer or borrower is unprepared for this possibility, angst and ill will often occur between he/she and the borrower. “Why didn’t anyone tell me? They’re supposed to be the experts!” is a recurring outcry. For the manufactured home processing newbie, don’t be fooled by the appraisal report, which nine times out of ten stipulates that the home is on a permanent foundation. Unfortunately, the appraiser often makes a determination about “permanence” strictly on the basis that the tires and axles have been removed or some other vague set of standards, not on the basis of the foundation attachment.

The reason for the engineering certification requirement is to establish a national standard of uniformity amidst inconsistent state installation standards. While manufactured homes enjoy the benefit of the HUD standardized preemptive structural, plumbing, and electrical standards that need to be met before leaving the factory, installation standards vary from county to county, state to state. So the home can be designed for stringent seismic, wind and roof load expectations, but the home may be set up just like the old trailers of yester year, depending on area designation. Foundation systems are typically subject for review by the local code authorities and are often tailored to the site, soil, wind, flood, seismic and snow conditions of the individual county or state. Additionally, manufactured homes are unique in that they are the only type of residential dwelling that can be classified as either person (chattel) or real property. In some states, the type of foundation supporting the manufactured home determines the distinction between personal and real property. Since the individual jurisdictional requirements vary significantly, the Engineer Certification Letter helps to provide an oversight standard. This is generally an underwriting requirement for all FHA insured loans, which also include Reverse Mortgages.

If an existing home is already on a foundation, an engineer can provide a certification attesting to the fact that the home meets the guidelines. If it does not meet the HUD guidelines, there are a variety of proprietary or approved engineered foundation systems that can be retrofitted in combination with the existing structural components. As in any industry, one size does not fit all in the engineering landscape and engineers that specialize in the manufactured home industry and the HUD inspection specifications are a rare breed. Because there are a vast array of proprietary products that have been introduced into the national marketplace, an engineer’s knowledge about these patented systems is also an additional benefit since these have all been pre-engineered and stamped delineating all of the system specifications.

This also means if the foundation does not meet the FHA-insured criteria for a permanent foundation, the engineer does not need to re-invent the wheel with a repair recommendation—there are a plethora of products available for the retrofit contractor that may satisfy the engineer’s requirements. However, even though proprietary systems almost always carry engineering approvals, approvals vary state by state and some building departments may not approve their design concepts. Therefore finding the right combination of an engineer and contracting team that understands the FHA lending process, the building permit process and the available proprietary retrofit systems AND that can work within the timeline of your loan lock timeline can be a bit of a balancing act.

There’s no time like the present to take a plunge! The manufactured housing industry may just be the next great niche market.

About Janis Arendsen: Janis Arendsen is owner of On The Level, a contracting company specializing in the inspection, servicing and retrofitting of manufactured housing foundations and works in conjunction with Pacific Consulting Engineers that provides engineer’s certifications on foundations. Refer to www.onthelevelcontractors.com for more information.

With the increasing popularity of the Reverse Mortgage loan product for those homeowners 62 and older, loan processors are dealing more and more with manufactured homes in their portfolios. Many seniors have chosen the manufactured home communities as a retirement refuge and the community and recreational atmosphere lend itself well to word-of-mouth referrals and the spreading the news about Reverse Mortgage benefits. However, the manufactured home loan presents a new set of criteria for the loan officer and loan processor as well as the borrower so be prepared ahead of time.

Certain criteria are absolutes:

1. The manufactured must be a HUD home, which means it must be manufactured after June 15, 1976. If there are metal plates at the rear of the home that begin with a three Alpha letters like CAL, ARZ, ORE, that’s usually a good sign. If the HUD label is missing, usually a label verification letter from the Institute for Building Technology and Safety (IBTS) which will give the provenance of the home will suffice.
2. The manufactured home is classified and taxed as real estate. A long term lease may also be acceptable in certain instances.
3. The axles and tongues must be removed.
4. The manufactured home must have an adequate perimeter enclosure with appropriate ventilation.
5. Must have a floor area of not less than 400 square feet
6. Built and remains on a permanent chassis
7. The finished grade elevation beneath the manufactured home shall be at or above the 100 year return frequency flood elevation.
8. The home must sit on a permanent foundation.

AND

All foundation systems, new and existing, must meet the guidelines published in the Permanent Foundations Guide for Manufactured Housing, (HUD-7584), dated September 1996. A certification attesting to compliance with this handbook must be obtained from a licensed professional engineer and included in the insuring file.

This last requirement can throw the loan processor into a quandary if they have never expedited a manufactured home transaction previously because this request will often show up at the 11th hour of loan closing. Nine times out of ten the appraisal report will show that the home is on a foundation system so the processor or loan officer won’t have alarm bells off of worry going off when they receive this condition. Unfortunately, the appraiser often simply determines “permanence” strictly on the basis that the tires and axles have been removed or some other vague set of standards, not on the basis of the foundation attachment.

The reason for this requirement is to establish a national standard of consistency amidst inconsistent state installation standards. While manufactured homes have standardized preemptive structural, plumbing, and electrical standards that need to be met before leaving the factory, installation standards vary from county to county, state to state. Additionally, manufactured homes are unique in that they can either be titled either as personal property (chattel) or real property. In some states the distinction between personal and real property is determined by the type of foundation and underpinnings that support the home. Since the individual jurisdictional requirements vary signficantly, the Engineer Certification Letter helps to provide a standard for excellence. This is generally an underwriting requirement for all FHA insured loans, which also include Reverse Mortgages.

If an existing home is already on a foundation, an engineer can provide a certification attesting to the fact that the home meets the guidelines. If it does not meet the HUD guidelines, there are a variety of proprietary or approved engineered foundation systems that can be retrofitted in combination with the existing structural components. As in any industry, one size does not fit all in the engineering landscape and engineers that specialize in the manufactured home industry and the HUD inspection specifications are even rarer still. Because there are a vast array of proprietary products that have been introduced into the national marketplace, knowledge about these systems is also an additional benefit since these have all been pre-engineered and stamped delineating all of the system specifications. This also means if the foundation does not meet the FHA-insured criteria for a permanent foundation, the engineer does not need to re-invent the wheel with a repair recommendation—there are a plethora of products available for the retrofit contractor. Therefore finding the right combination of an engineer and contracting team that understands the FHA lending process so the engineering certification does not impair the loan lock timeline, is familiar with the availability of proprietary systems that can resolve the repair issues if they are necessary and are able to liaison with both lender and borrower to provide turn-key solutions.

On The Level www.onthelevelcontractors and Pacific Consulting Engineers collectively team to comprehensively resolve FHA-insured loan certification and foundation repair issues for the manufactured home borrower and lender.

What’s Holding Up your Home May also be Holding up your Loan
Know Your Foundation!

Homeowners that live in manufactured homes often face confusion and frustration at the worst possible time —at the 11th hour when they go to buy/sell or refinance their home and the lender pops up with a final condition: an engineer’s certification of the manufactured home’s foundation. For many this becomes a crisis when the foundation fails to meet the HUD guidelines. To resolve the situation and proceed with the loan, the lender will then require an engineered upgrade, repair or a retrofit on the foundation in order to meet the HUD guidelines.

In a state of panic, where does the borrower or lender go for a reliable source to satisfy this condition? Fortunately, there is a vast array of pre-engineered and approved “permanent” foundation systems available in the marketplace so the homeowner or homebuyer doesn’t have to pay to reinvent the wheel, but the borrower may still have a difficult time discerning which criteria should be used to make a selection. Should they focus on the features and benefits of the individual system or make a decision strictly on the price point? The fact that homeowners are floundering for answers at a time of heightened stress in the loan consummation process accelerates their confusion and leads some borrowers to blame the loan officers or transaction coordinators. “Why didn’t anyone know this??” is the frequent outcry. To be fair, the loan officer or processor is likely dealing with their very first FHA manufactured home loan and was not aware that the foundation would be a critical factor in the loan. However, the borrower often views this last minute potentially expensive surprise as a lack of professionalism on the part of the lender and further adds to his/her consternation.

So, for both borrower and lender, it may be important to have a strategy to interpret available repair solutions. Where can a borrower or lender get the best information? A web search for foundation systems may supply you with some of the names prominent in the industry and you can start educating by having product manufacturers feature the benefits of their respective proprietary foundation system. Likely you will hear the manufacturer’s self-directed accolades extolling the virtues of their system as the “only true FHA certified system” so the tariff for the system may also include a hefty sales commission. Although many manufacturers proclaim that their patented proprietary foundation system is FHA or HUD approved, the truth is there are no blanket approvals that automatically provide a stamp of approval on an FHA-insured loan. Even though the components that are used in their system may indeed provide the vertical and lateral loads needed to meet the HUD Permanent Foundation Guide for Manufactured Homes, 1996, without proper installation the system is as worthless as Tinker Toys sitting in the cannister. Only a licensed engineer on a case-by-case basis can determine whether the system meets the HUD foundation guidelines and must attest to that fact in a certification letter, wet-stamped and signed. One can imagine a worst case scenario where a borrower pays big dollars for a system installation, only to have the installation fail under the scrutiny of an engineer.

While the safety features alone of a foundation system might normally be a component in a homeowner or home buyer’s decision-making, the tick-tock of a loan lock creates a sense of urgency. Plus the unexpected cost of a retrofit at a time of financial need will generally cause most borrowers to think primarily with their pocketbooks. While many manufacturers of foundation systems battle for positioning because they protest that their system has superior load-bearing or seismic resistance, the reality is that the performance of the installer and the turn-around time for the engineer to certify the foundation have become the new standard for structural excellence in the world of FHA manufactured housing financing. By necessity, the merits of the system and its structural efficacy have taken a back seat to the contractor and engineering team that provides the verification that the lender needs to take the loan to underwriting. Since a system is only as good as its installation and certification by an engineer, start by finding a contractor/engineer team that that has a comprehensive knowledge of the FHA and title process, can liaison between borrower and lender to create a seamless transaction, can provide extra structural support for the home as well as the much needed service support for the loan transaction.

Manufactured home specialty contractors are often knowledgeable about both the plethora of proprietary systems available on the market as well as the costs and the building permit process associated with the installation. They understand that different systems have different merits and the ranking for decision-making has a number of determining factors, some of which are:

1. Size of home
2. Type of home manufacturer and the style
3. Type of perimeter enclosure
4. Type of set-up (above ground or subterranean set)
5. Type of soil/ground/drainage conditions
6. Appurtenant structures to the home
7. Roof load, floor load, live load in the home
8. Local building code requirements determined by wind, flood, seismic activity
9. Best system vs. best value

Therefore, choosing your foundation system should come down to the competency of the retrofitter/engineering team that can economically, expeditiously and successfully accomplish a finished product, wading through the lending requisites, local building department requirements, providing any recorded documentation (like the 433A in California) and the ultimate prize—the engineer’s certification letter verifying that the foundation meets the HUD guidelines. On The Level and Pacific Consulting Engineers have joined forces to make up one of the most informed teams in the manufactured housing industry: www.onthelevelcontractors.com and can provide both lenders and borrowers with answers and solutions.