Lender rejecting loan until non existing title surrendered

[seekingknowledge]

, confirming our phone conversation earlier today, the above referenced housing unit is identified in two ways. The serial number designation is as stated above, MY91 7721 ABV, and the HUD label numbers, RAD551298 and RAD551290. Fairmont Homes, Inc. and Friendship Homes of Minnesota, Inc. do not assign a vehicle identification number to our housing products.
this from the manufacturer

 

[CANative]

Are you trying to confirm that the improvements are manufactured (or modular) or are you trying to confirm permanent affixture?

 

[seekingknowledge]

"I can attest that this is a HUD Manufatured Home as evidenced by the RAD numbers we sent you before, RAD551289 and RAD551290. " just received from Fairmont...What I am needing to prove is yes, this is a permanent affixture..but apparently that is not possible in MN without a surrender of a title which has never been issued (per dmv), and which the dmv says does not need to be issued, but wells fargo says must be. I have fannie guidelines which speak to this, but this is FHA.

 

[CANative]

Mobile/Manufactured Home
A structure that is transportable in one or more sections which is a complete livable dwelling unit equipped with wheels so that it may be towed from place to place by a truck, depending on its size and highway regulations. This property type is considered to be personal property when it is sited on land that is leased. It is considered to be real property when it is affixed to the land that is owned by the owner of the mobile home, by a permanent foundation, or in a manner comparable to other real property.

http://www.co.anoka.mn.us/v1_departments/div-property-rec-tax/glossary.asp#36

If it's an FHA deal you probably need a foundation certification and this will verify permanent foundation (real property).

 

[seekingknowledge]

i know. I guess what it comes down to is he who has the money makes the rules. I have provided the owners registration, the actual production statement as it went down the line, the county assessor and inspectors notation as it was entered into the real estate roles..all with my sellers name on each statement. I have the inital purchase order, the building plans (which call it a modular!), but Fairmont states it is a mfgrd home. I can't seem to get around any of this with Wells, all the way to the vp of area home mortgage..who says go to court. my seller is a disabled Korean War vet..and I will not give up on him gettng into the handicapped housing he now needs. this is insane..thank you all for your help and advice

 

[CANative]

Read this section of the MN Code and then the link to Section 273 and see if they help any.

168A.141 MANUFACTURED HOME AFFIXED TO REAL PROPERTY.
Subdivision 1.Certificates surrendered for cancellation.

When a manufactured home is affixed, as defined in section 273.125, subdivision 8, paragraph (b), to real property, and financed by the giving of a mortgage on the real property, the owner of the manufactured home shall surrender the manufacturer's certificate of origin or certificate of title to the department for cancellation. The owner of the manufactured home shall give the department the address and legal description of the real property. The department may require the filing of other information. The department must not issue a certificate of title for a manufactured home under chapter 168A if the manufacturer's certificate of origin is surrendered under this subdivision. Upon surrender of the manufacturer's certificate of origin or the certificate of title, the department shall issue notice of surrender to the owner and the manufactured home is deemed to be an improvement to real property. The notice to surrender may be recorded in the office of the county recorder or with the registrar of titles if the land is registered but need not contain an acknowledgment.
Subd. 2.Perfected security interest avoids cancellation.

The department may not cancel a certificate of title if a security interest has been perfected on the manufactured home. If a security interest has been perfected, the department shall notify the owner and each secured party that the certificate of title and a description of the security interest have been surrendered to the department and that the department will not cancel the certificate of title until the security interest is satisfied. Permanent attachment to real property does not extinguish an otherwise valid security interest in or tax lien on the manufactured home.
Subd. 3.Notice of security interest avoids surrender.

The manufacturer's certificate of origin or the certificate of title need not be surrendered to the department under subdivision 1 when a perfected security interest exists on the manufactured home at the time the manufactured home is affixed to real property, if the owner of the manufactured home files a notice with the county recorder, or with the registrar of titles, if the land is registered, stating that the manufactured home located on the property is encumbered by a perfected security interest. The notice must state the name and address of the secured party as set forth on the certificate of title, the legal description of the real property, and the name and address of the record fee owner of the real property on which the manufactured home is affixed. When the security interest is released or satisfied, the secured party shall attach a copy of the release or satisfaction to a notice executed by the secured party containing the county recorder or registrar of titles document number of the notice of security interest. The notice of release or satisfaction must be filed with the county recorder, or registrar of titles, if the land is registered. Neither the notice described in this subdivision nor the security interest on the certificate of title is deemed to be an encumbrance on the real property. The notices provided for in this subdivision need not be acknowledged.


https://www.revisor.mn.gov/statutes/?id=273.125#stat.273.125.8

 

[AnonApprsr]

No chance of a different lender? If it's strictly a Wells code perhaps a local lender may be more forgiving?

 

[Rich Heyn]

Let's assume that it is a manufactured home that has no title because the dealer did not send in the Certificate of Origination to the State to have a title issued. The Dealer is long gone and so is the original C of O. The manufacturer cannot or will not issue a duplicate C of O.

The lender wants the title surrendered to prevent future claims that it is personal, not real property.

My guess is that there is some procedure in your state to deal with this. Call Marc at MMHA and let us know what he says.

You might also talk to your friends at the title company. They may have been down this road before.

 

[CANative]

From the little I've read in the MN code it seems like it is a county by county issue and that permanent affixture is based on location of fee land and an acceptable foundation.

 

[Rich Heyn]

From the little I've read in the MN code it seems like it is a county by county issue and that permanent affixture is based on location of fee land and an acceptable foundation.

The issue here, if I understand this correctly, has little to do with permanent affixture.

A number of States, most of them in the Midwest, had no legal process for surrendering a title to a manufactured home. Sometime in the 80s or 90s, a bank in Michigan foreclosed on a loan they made on a MH sited on a few acres. From what I know of this, the home was as "permanently affixed" as most manufactured homes are. However, the homeowner's attorney argued that the bank had never filed a UCC-1 (which shows the bank as having an interest) and the homeowner held clear title to the house. Their claim essentially was that the bank could take the land but not the house. The courts in MI didn't buy the argument, said that the MH walked and talked like real property and that the bank could take the house as well as the land. Some Federal court in Ohio overturned the decision.

Immediately, Freddie Mac quit purchasing loans in States that did not have title surrender procedures. Those States got busy and passed title surrender procedures. However, due to the lack of previous legal procedures, there was a pervasive untidiness among owners, dealers and lenders regarding COOs, titles and such. Many homeowners never received their title or COO, dealers went out of business, homes had been sold and resold several times, etc.

So that's what the OP is dealing with (I think). It's not like CA, Greg, which has one of the oldest and well developed systems in the US for dealing with MH title issues.