While a mobile home is a dwelling that individuals live in, the types of loans used to finance them are similar to the types of loans used to finance vehicles or personal property items, such as kitchen appliances or household furniture. The unfortunate result of using these types of loans for a mobile home is that individuals do not have the same kind of foreclosure protection that is available to those who purchase homes using home mortgages. A mobile home can essentially be repossessed like a car.
Exploring Repossession Laws
While a mobile home certainly qualifies as being a home, the law views it as being similar to a vehicle, and thus it is subject to being repossessed like a vehicle would. While there are foreclosure laws in place, they do not always apply to mobile homes.
However, most states have laws that require lenders to provide borrowers with notice of impending foreclosure and the opportunity to pay off the outstanding balance and keep their home. Generally, a lender will not start the process of repossession unless the borrower is behind on three or more payments.
Why a Mobile Home can be Repossessed
A mobile home is viewed as a type of vehicle under most state and federal laws, and most loans available for the purchase of mobile homes are similar to loans used to purchase vehicles and personal property. The fact that a mobile home is on wheels and can be transported means it is subject to the same type of repossession that vehicles are.
While a mobile home cannot be towed away by the repo man, it can be seized by the lender without the same due process afforded to real property borrowers and owners. As a general rule, mobile home owners should be aware that their home can be repossessed only in situations where they do not own the land the vehicle is currently sitting on. If they do own the land, a foreclosure process will be initiated rather than a repossession.
Stop Mobile Home Repossession
If you are faced with the possibility of having your mobile home repossessed, the first thing you will want to do is call your lender to see if payment arrangements can be worked out. In many instances, lenders proceed with filing foreclosure and repossession notices because they have been unable to communicate with you.
Depending on the amount you owe and the leniency your lender is willing to offer, you may be able to defer payments. Or, you may need to come up with a large sum of money to pay off your owed balance. Small bank loans or a loan from a family member or close friend can help you bring your balance up to date.
Seeking Legal Aid
A deficiency judgment or a filing of bankruptcy is often enough to prevent a lender from repossessing your mobile home. If you are in a position where you are eligible to file for either of these, do so quickly, so that you can have a legal order that prevents your lender from repossessing your mobile home.
Other Relevant Considerations
Do your best to make your monthly loan payments on time. If you are struggling with the amount owed or the due date of the monthly payments, contact your lender. In many cases, they will be more than happy to work with you and change the due date or possibly lower the amount, particularly if you have shown an honest effort in upholding your end of the loan.
Good communication is key when dealing with any lender, and especially so when dealing with the lender who has the deed to your mobile home.