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Mobile Home Lenders Hard to Come by

Lending standards in the Mobile Home finance insdustry have typically become restricted during periods of economic hardship. This is not surprising, but nevertheless not well received. The tight standards that lending institutions are now maintaining for Mobile Home loans is similar to a agriculturist who depletes all the resources from his dirt as fast as possible. The farmer then blames at the grocer for his loss in livelihood, instead of accepting that he himself is truly responsible for poisoning the well. The banks have been taking advantage of the relaxed legislation for many years now, while capitalizing by allowing irresponsible financing to take place, then securitizing the loan and placing it elsewhere. Now the banks are doing the opposite to recover their losses by becoming overly cautious. Manufactured Home banks are finding phantom reasons to reject even the lowest risk loans.

Manufactured Home mortgage brokers are now left asking who the new primary lender will be in the Mobile Home finance community after this economic crisis. Recently the government has banned Taylor, Bean and Whitaker from making any more investments backed by by the federal government. HUD said Taylor did not submit a necessary financial report, which amounted to fraud concerns. Taylor was also instructed to cease in issuing MBS for Ginnie Mae. This firm was the former premier source of funds for mobile housing, they lent nearly $1.45 billion of all Manufactured Home investments in 2007, which were backed by the Federal Housing Administration.

Wells Fargo, JP Morgan Chase Bank, and Countrywide are the remaining large mobile home lenders, however they aren't as active as they used to be in the Manufactured Home loan insdustry. This small amount of investors will lead to reduced competition, yieldning a high demand and therein, higher interest rates. Because of this situation, the lending institutions have the advantage and will probably only issue a limited number of loan programs available to refinance or finance a Mobile Home in America.

Manufactured Homes have been) the primary first step towards property ownership for lowincome and senior citizens for a long time. Mobile Home loan agents are finding it difficult to find new sources of mobile home funding from a group of lenders that has shrunk during the past several years. Manufactured houses, which are factory-built in parts and then put together at a land site, are significantly less expensive than traditional homes. According to the Commerce Department, the average price for a Mobile Home in 2008 was $65K, much lower than the average price of $292K for a site-built home.

Strangely, Warren Buffet's Berkshire Hathaway revealed recently that in this current housing/banking crisis, their Mobile Home customers are foreclosing less and making their loan payments more. Berkshire subsidiary Clayton Homes' delinquency rates for mobile home loans have also been stable during these times of turmoil: the delinquency rate was 3.26% in 2004; it was at 3.5% in 2008; and now it's 3.82% here in 2009. However, the delinquency rate in the traditional housing insdustry is higher, around 6.4%. Annual credit losses are running steady at a reasonable 1.5% of the loan portfolio. It is worth mentioning, however, that Clayton does not securitize their loans. This means the loans remain on their books, so they are much more conservative in their loan approval process.

This seems like a paradox, but it should make Mobile Home loans a logical consideration among the possible lenders that are looking to emerge into a lucrative new niche market. Which leaves everyone in the Mobile Home community asking the question: Who will step up to the plate to be the leading Mobile Home Lender? It is possible that Warren Buffet will step up to the plate, but his big investments and movements lately have seemed incongruous. He may move to a low-stakes table, while the Manufactured Home financing insdustry is overtaken by a new investment company willing to emerge into a new market starving for capital.

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Mobile Home Lenders Hard to Come by