FNMA/Manufactured homes/REO

[Tim Hicks (Texas)]

I like the new FNMA rules about requiring the HUD Tag Numbers and manufacturers information in our reports. That is great and I already did it anyway. I have always been able to find the tag numbers or documentation somewhere on the property. Until now. I have an REO property where the HUD tags have been removed, there is no evidence anywhere in the interior or the electrical box either. This is a large property 2,100 SF with an add-on utility room with half bath, add-on front entry, an in ground pool (not typical) and 4.5 acres. The home appears to have been constructed in 1983. The property is trashed, the wires were cut out of the electrical box, leaking roof, holes in the walls, nice black water in the pool. I other words your typical REO property. My problem does not lie with "as is" or "as repaired" value. Well, maybe it does. if you have no HUD documentation and can not derive the manufacturer, then will FNMA loan on this property? In my opinion, this would affect the saleability of the home if you could only have "cash" buyers. Would this be considered a "land value only" if FNMA will not loan on it? How would you consider this issue on an REO property?

P.S. No, I never get regular assignments it seems, Oh well, at least they know who to call when they get a non-conforming property. At what point can I quit using the "good experience' excuse?

 

[Jo Ann Meyer Stratton]

Tim:

How does Texas report documentation for ownership? Or for installation? Or for taxation? Somewhere should be some information in one of those documents. With a serial number (AKA VIN, vehicle identitifcation number) some government agency can identify the year and manufacturer. If you know that, you can find the inspection agency that inspected the home in the factory while it was under construction. Then that inspection agency can give you the HUD number. Of course make your client do all that work! They should have done it when they made the original loan! But the information is there, it just takes some digging with government agencies and inspection companies.

I am working on one order for a drive by that turned out to be five parcels; client has changed to two orders. Two are contiguous. The other three are 2 miles away, with two contiguous and the third 50' away on the same street. It appears the ownership was never transferred for the manufactured home and three mobile homes when the properties were all sold by one owner to the latest owner. I have run down the information on three of the four homes but can't find the owner of the fourth. I think I will be down to calling the daughter of an old co worker who happens to be living on the lot in the middle, the daughter works for the city where they are located, find out who lives there, then find out if any homes are in that name. Working in a small town gets interesting at times--you have to know the families and their ancestries before you can find the real property!

Good Luck!

 

[Farm Gal]

never mind I didn't read that it was a REO with addl values....

 

[Tim Hicks (Texas)]

Jo Anne is right, the lender should be able to come up with the HUD and manufacturer info. My concern was not really what property is worth "as is" because most of these type properties that need repairs are sold to cash buyers. My concern is "as repaired". If the lender decides to fix the property and sell it and they can not determine the HUD and manufacturer information, then the type of financing the borrower would be able to obtain would be very limited. So, you could have a "as repaired" value with proper documentation, or an "as repaired" property without documentation that would have limited saleability. I added an addendum addressing this issue, so the lender could not come back later and ask me why I did not present the problem to them during the appraisal process. I know I am over analyzing a bit, but you never know what a lender will come up with anymore.

 

[Restrain]

HUD tags are mandatory for FHA loans. I generally find a slip of paper in the cabinet under the sink or over the sink that has the serial number. However, in spite of FNMA regulations, they should be able to make a loan if they want to. It's not unusual for older homes to have the HUD tags painted over and be unreadable. Good luck.

 

[Farm Gal]

Tim:
I think that given the situation you have covered your tailfeathers quite nicely with those addendums... care to give us a peek?

To put your worried mind at ease: Given the short period of time since FNMA came up with these "iron-no-bend 'em rules" there probably is no market defined depreciation for lack of papers YET... and you are appraising this property today.

Further as Rstrahan points out iron rules WILL be bent if someone really wants to make the loan...

It will be interesting to watch and see how or if this affect resales, I think someone will come in to fill the void if Fannie refuses to carry the paper.

Have a beer: it's Friday.

Regards,

Lee Ann

 

[Jo Ann Meyer Stratton]

For a FHA appraisal, if you cannot locate the labels on the exterior or the data plate (some times called the compliance certificate), just locate all the information you can, info from owner, ownership documents, tax records, etc. Put all the information you can find in your report. Then it is the lender's responsibility to contact the appropriate agency to verify that the home was constructed to HUD code. See the National Reference Guide section 1-9. The home will still be able to be financed with an FHA loan, the underwriter just has to work harder. And with Fannie Mae's new guidelines, the same applies. But at least look and report for all the information that can be obtained. After all, there hasn't been a single manufactured home constructed since 1976 that was not built to HUD code. If the home was built to a different building code then it is a modular or kit or panelized home but it is not a manufactured home. Mobile homes may or may not have been built to an industry code prior to June 15, 1976. That is why Fannie Mae, Freddie Mac, HUD and VA will not finance mobile homes.