ServiceLink’s experts break down the differences in titling manufactured housing and how effective a strong partner is during the process.

As the housing market continues to make it tough for homebuyers to purchase single-family homes, manufactured housing has gained attention as a practical option. While manufactured homes carry misconceptions around them, they offer an affordable solution to today’s homeownership challenges and have grown increasingly popular.

There are some nuances when it comes to the title process for manufactured homes. Having a partner who can provide expertise in this area is crucial to lenders’ success.

What’s different about titling manufactured homes?

While modular homes can be titled as real property through the same process stick-built homes are, manufactured homes must be converted from personal property to real property. This process can be quite different from state to state, Susan Falsetti, managing director, origination title and close, points out, and any number of variables can make it more complex and time-consuming. “If a lender is working with a title company that doesn’t take the time to make sure the title has been surrendered properly, they’re going to have a real issue in the event of a foreclosure. Doing the conversion correctly up front is critical.”

In short, manufactured home title processing entails first titling the home in the same way a car is titled and then converting it from personal property to real property. Tamara Clawson, account executive, origination title and close, explains, “The dealer who sold the home to the buyer provides them or their title company with the manufacturer’s statement or certificate of origin once the home is built. Depending on state, the title company then works with the buyer to apply for the title from the DMV, so that the home is placed in the buyer’s name, with or without a lienholder. Then the conversion process begins. Per state guidelines, the home’s vehicle title is canceled or deactivated, any recordable documents are sent to the county for recording and the home is assessed with the land.”

The significance of effective troubleshooting

In the event the conversion process is handled inappropriately, Clawson details issues that could arise:

• In the case of foreclosure, if the home was not insured or converted to real property correctly, and the lender did not have clear title or full conversion of the manufactured home, they would not be able to foreclose because they did not have the vested interest in the home to foreclose upon.

• In the case where the conversion process was never completed and there’s an open title at the DMV stating the home is in the previous owner’s name, that party could come back and physically remove that manufactured home from the property even though the new homeowner purchased it.

“Lenders should never look at a manufactured home transaction as just another purchase or refinance transaction,” Falsetti says. “This is a different, specialized process that requires people with the right expertise and experience.”

Partnering for success in the manufactured homes lending space

The right title partner can make all the difference to a lender looking to get into manufactured home lending, but it’s important to understand that most title companies don’t offer expertise in this area, Clawson says. “ServiceLink is one of the few title companies that is willing to process and insure manufactured home conversions. We have a dedicated manufactured home team with decades of experience in processing these titles from point of purchase to real property conversion.”

Dave Howard, executive vice president of origination sales, adds, “ServiceLink has not only more than two decades of experience doing manufactured home purchase and refinance transactions, but also a full-scale operation facilitated by technology that enables our team to be as efficient as possible. There are parts of this process that take a lot of time — dealing with local municipalities to get liens cleared, for example. Many other title companies have chosen not to step up to the challenge. We step up, not just doing the hard work, but also communicating with the lender and borrower so everyone understands why things are happening the way they are. As ServiceLink lifts the burdens of time and complexity, lenders have an opportunity to establish new relationships as they tap into a new revenue stream.”

Falsetti says that having the right people in place is vital to ServiceLink’s excellence in this space. “This process can be overwhelming for some borrowers, so having knowledgeable, patient representatives to help them understand the process and the nuances of their state and explain that we will do the work on their behalf, reassures them at a time when they may be making the biggest investment of their lives.”

At the end of the day, Howard adds, it doesn’t matter what type of transaction it is, whether a traditional site-built home, condo or manufactured home, there’s a customer on the other end that needs to be cared for — treated with respect, expertise, transparency, communication and trust.

“Our ServiceLink team builds those things into all types of transactions — not just the easy ones,” he says. “From our perspective, there is always a person on the other end of that transaction who is trying to better their lives. It’s not about the physical piece of property to them; it’s a means to an end for something they want to do positively for their life. We approach our service with that in mind, never shying away from the difficult transactions, because we know we’re making a difference.”

For more information on opportunities in this space, read part 1 of our manufactured homes series.