MH Questions

[alexmorrow]

Here are some question I have for those who invest heavily in mobile homes. Many of these questions came to me while I was reading Deals on Wheels.

1. Do you check to see the buyer can afford the monthly payments? If so, how? Do you look at their credit app that the park manager ran on them?

2. What are the problems of your method Jim? Why not just say "WILL FINANCE"? Sometime buyers want lower payments and don't care about if they have to pay a down-payment or not. They sometimes care about the interest.

3. Do any of your buyer's want to change the terms, price, ect of the loan?

4. Do you wrap everything (insurance, title transfer fee, and security deposit)into the loan?

5. Do you make the buyer's sign an agreement that releases their credit app (that the park pulled) to you?

6. Promissory Note Copies vs. original, still important? Do you always give them a copy of everything they signed and you keep the originals?

7. How are payments applied in your promissory note? For example, do you apply the money in this order? 1. Fees 2. Interest 3. Principal

8. Do you have a bad check charge? I think you take certified money only i believe.

9. At what point do you take possession of the home if they are late?

10. Loan assumption allowed on your loans or no?

11. Holding a note but transferring title? Pros/cons? I thought you always hold the note and only transfer title once they finish paying you off.

I am having some trouble understanding this paperwork stuff.

[Debbie]

IMHO, you need to add one more important question: What is the highest interest rate allowed (ursury cap allowed by state)?

During my research, I found that usury cap does not apply to vehicle (including MH). It was one of those law links. But I could not verify it's accuracy.

[alexmorrow]

Yea that's a good question too. Also, is it by state or county?

[Debbie]

Yea that's a good question too. Also, is it by state or county?

By state.

Here's the link: http://www.lectlaw.com/files/ban02.htm

[Debbie]

Here is one example that the mh/vehicle that does not apply to the usury cap: http://ago.mo.gov/opinions/1971/456-71.htm

But.....I still can not verify if it applies nationwide or it's accuracy.

Does anyone know? If yes, can you provide proof of verification?

[Debbie]

Here's the slightly better one: http://law.jrank.org/pages/11800/Interest-Rates.html

[alexmorrow]

Jim can you also explain the difference between legal rate of interest and usury limit and the maximum rates? Cause I know what you are charging and it's a little more than 8% and 12%.

"COLORADO, the legal rate of interest is 8%; the general usury limit
is 45%. The maximum rates to consumers is 12% per annum."

[Debbie]

Jim can you also explain the difference between legal rate of interest and usury limit and the maximum rates? Cause I know what you are charging and it's a little more than 8% and 12%.

"COLORADO, the legal rate of interest is 8%; the general usury limit
is 45%. The maximum rates to consumers is 12% per annum."

Did Jim answered your questions? If yes, what did he say?

[alexmorrow]

Nope, he's out looking at parks.

[Debbie]

Nope, he's out looking at parks.

:SM090: Good excuse. But I do know he's online here at this dead:00 hour.....:SM131:

[alexmorrow]

haha...well, I'm sure he'll read this and answer my questions when he has time. I bet he's swamped.

[Jim Johnson]

Here are some question I have for those who invest heavily in mobile homes. Many of these questions came to me while I was reading Deals on Wheels.

1. Do you check to see the buyer can afford the monthly payments? If so, how? Do you look at their credit app that the park manager ran on them?

I approve the buyer based on the Parks approval, most of the time... that said the park should have some sort of credit and income verification in their approval process.

2. What are the problems of your method Jim? Why not just say "WILL FINANCE"? Sometime buyers want lower payments and don't care about if they have to pay a down-payment or not. They sometimes care about the interest.

I have about 1 in 100 buyers walk due to interest charges. I put on my signs no down payment because it makes people stop and call. I buy right so I do not need down payments to make my numbers work.

3. Do any of your buyer's want to change the terms, price, ect of the loan?

Yes. And I say no. If they are buying on terms they are my terms... period.

4. Do you wrap everything (insurance, title transfer fee, and security deposit)into the loan?

I do if there is no down payment.

5. Do you make the buyer's sign an agreement that releases their credit app (that the park pulled) to you?

I have them sign a application form that allows me to pull credit if I need to.

6. Promissory Note Copies vs. original, still important? Do you always give them a copy of everything they signed and you keep the originals?

They get copies.

7. How are payments applied in your promissory note? For example, do you apply the money in this order? 1. Fees 2. Interest 3. Principal

Late fees, service charge, escrows, interest, principal

8. Do you have a bad check charge? I think you take certified money only i believe.

bad checks $50 per time my bank runs the check, then late fees @ $10 per day...

9. At what point do you take possession of the home if they are late?

60 days or so...

10. Loan assumption allowed on your loans or no?

They are not assumable by contract... but I will allow it with a fee...

11. Holding a note but transferring title? Pros/cons? I thought you always hold the note and only transfer title once they finish paying you off.

The title is transferred by the State into the new owners name with my company as the lien holder. The title is then held by me until the home is paid off. I always transfer the title...

I am having some trouble understanding this paperwork stuff.

I hope this helps... or opens new questions...