"Modular?" I don't think so!

[Kathy in FL]

Just got a review order from a great client I work for quite a bit. Looked it over and called her...Amy, says I, did you notice that this guy (trainee, being signed off for by a residential appraiser with an address over 150 miles from his subject) stated that this home is "modular?" There is a big fat "NO" in the manufactured part. Did you also notice that all three comps are expensive site-built homes? Did you notice that NOT one was "modular?" Did you notice that in the pictures and sketch the home is 28'x66', has vinyl siding and is a nice little rectangular thing with a triangular peak in the roof that just screams "I'm a doublewide with a cathedral ceiling?" DID ANYBODY NOTICE THAT THE HOME IS BEING PURCHASED FROM A MOBILE HOME DEALER????? Not in one place in the report, other than the "No/Modular" entry on the manufactured line is the fact that this thing is a trailer mentioned. (If it walks like a trailer, and quacks like a trailer...) Didn't anybody question the $120,000 value?? On two acres, folks. Where is that annoying underwriter who always wants serial numbers and HUD tag pictures?

Now, I know there's quite a bit of debate about modular/manufactured...and before I go off on this guy, I want to have MY duckies lined up. Is a home with vinyl siding that comes in two parts on a semi, down the highway on wheels and is stapled together, purchased from a guy who sells singlewides, doublewides, and triplewides with his own (Conseco or Greentree) financing...is that modular now? This is not a log home out of a kit...this is your typical, bought from a lot on the outskirts of town and a guy in a bad suit named Steve for WAY too much money mobile home.

Am I getting stupid??

Kathy in FL

 

[Pamela Crowley (Florida)]

But Kathy, there aren't many lenders that will do manufactured wobbly boxes anymore. This one came up with a new version of fraud for you.

 

[Ben Vukicevich SRA]

Kathy,

It doesn't matter how it comes down the highway. It's how it's built. Many modular homes are of equal quality when compared to stick built homes. It depends on the builder. Most advertise that the homes are built in factories and have very little exposure to the weather during construction as a selling feature. We've all seen the delaminated plywood floors in stick-built homes that have been in the rain too long.

At the risk of offending JoAnn Meyer-Stratton,SRA, I will state that if it looks like a mobile (manufactured) home with a metal under carriage with a funky foundation , then it's one of those double wide thingees. But if it looks like a conventional home and is on a standard masonry foundation with wood floor joists, then it is a modular home. And the original appraiser may be correct in his/her choice of comps, if his interior inspection revealed similar construction quality to stick built. I dropped a Ryland modular home that came in 4 pieces for my brother-in-law in the Poconos years ago (1990.) You would not be able to tell it from a standard Ryland site built home. They all come from a factory. Mine was modular. The stick-builts come in panels which are assembled on the site.

So your Steve is probably branching out into modular homes. And they all have attractive names, the one I dropped was a "2444 split level."

Ben

 

[TEL2002]

At one time I lived in a manufactured (which sounds like what you are describing), and now I live in a modular. At one time I used to sell single wides, manufactureds and modulars. Typically the manufactured has a 3/12 pitch, paneling on the interior walls, vinyl or alum on the outside...but I have also seen fake log as well. They also have 4 steel I Beams, 2 under each side. they may or may not have steel outriggers. A modular usually has no steel beams (looks like a regular house underneath. Drywall interior walls. a steeper pitched roof (mine has 12/12 pitch and is a 1.5 story cape COD on a full basement.

For those that get to do one of these the first time...dig dig dig into Marshall & Swift. They give a fairly good breakdown of quality and types. Makes for a good read on a cold windy night.

PS I would definitely live in a modular again, but not a manufactured.

 

[Kathy in FL]

I found the really excellent thread a while back about modular/manufactured and I finally have that part straight. Since I haven't looked at the subject yet...I'm working from photos at this point. It looks like a doublewide to me. Since I do probably one doublewide a week, I have a pretty good grasp on what they look like. I suspect that any potential buyer would look at it as a doublewide, too, regardless of who put a sticker on it. It doesn't look site built...it looks like every other doublewide out here. I'm going to do the inspection and look REALLY hard for that HUD plate...'cause I bet it's there.

Now, even if it is "modular"...my question is the appropriateness of this guy's comps. There is, no doubt, a TOTAL lack of other "modular" sales...if this one is modular, it'll probably be the first one in four counties EVER. It's my opinion, that if a potential buyer would look at it as a DW, then comps should be doublewides. Not VERY expensive (for this rural market) site-built homes...'cause they're not going to attract the same kind of buyer that our modular will. His site-built homes range in the $110-$130 range...typical newer doublewide sales, same size as the subject in the area are running $50-70 K. BIG difference.

Opinions?
Kathy in FL

 

[Tim Hicks (Texas)]

Do you really want my opinion? Get out and look for the HUD tags. It will only take 30 seconds. I would bet you are right about it not being a modular home. Dealers, sellers, loan officers, all think they can fool the appraiser by calling a manufactured home a modular home. It must work, because there are plenty of "professional dummies" out there that will call it whatever makes their customer happy. I don't care if he did use site built homes, I bet you can see the difference in construction quality in the pictures. I would bet none of them are perfect recatngles. I am sure there are more similar site built homes in a lower range he could have used, too. Do the review and call it like you see it. You will be amazed how many infractions you will find. Frankly, I enjoy torching the appraiser in those type appraisals. The trouble is, they will not stop doing it until a they or some of their buddies lose their licenses over this type of fraud. Take it from me, "professional manufactured home appraisal reviewer", the percentage dollar amount of fraudulent manufactured home appraisals is far greater than any other type appraisal report in our business. I don't even get mad any more, these guys made thousands and thousands of dollars in appraisal fees and have suffered little for their transgressions and they don't lose any sleep over it either.

 

[Roger]

You might also look at the exterior wall height. Seems to me that the lower priced manufactured HUD homes have 7' outside walls, while the better modulars generally have full 8' exterior walls.

It's easy to estimate, if you are doing a curbside inspection, by looking at the height of the exterior door, which is generally 6'7" high. If the top of the front door is about 6" below the soffit, its likely a 7' exterior wall.

 

[pkbarnhart]

Interesting tid bit.........You absolutely need to get a copy of Fannie Mae Announcement 02-02 which Amends the Selling Guide. On page 5 of the announcement it states "If the appraiser is unable to find two comparable sales of similar factory built homes, the mortgage is not eligible for delivery to use since the market value of the property cannot be adequately measured and supported."

.............
I had an interesting discussion with a Fannie Mae underwriter last week. I had completed an appraisal on an REO home for Fannie. The home was a Modular home, put in a subdivision which has CC&Rs requiring that homes must be built to the UBC. She told me that it was obvious by the photos that this home was a manufactured home. I pointed out Fannie's own definition of a Manufactured Home in Section 304 of the Selling Guide which states...."It must also have been built under the Federal Home Construction and Safety Standards that were established by HUD in June 1976". This is essentially restated on the RED HUD tags attached to the end of each section of a manufactured home. This home was not built to HUD standards but was built to UBC and put on a concrete foundation, hence the home met Fannies definition of "other factory built housing".

The modular homes in this subdivision are typically built in the same factory as the manufactured homes with relatively few changes made to make the home comply with UBC codes. The homes are placed on concrete or concrete block foundations and are converted to real property by the local assessor. One other important distinction between a manufactured home and a modular home is that a modular typically does not come with a Title. The manufactured home is kind of like a big trailer, hook it up and away you go.

Typical guidelines and common appraisal methodology requires that the appraiser use similar homes if at all available. This goes for modular, manufactured, dome, even A frames or tents (if you please). You need to compare apples to apples. When doing so (if comps are available) it relieves the appraiser of ever having to determine what the market difference is between two types of homes. The question I often ask myself is, if this is the only modular home around is the home more desireable or less desireable than other homes in the area. If there are several modular homes in the area but no sales either the homes are so wonderful that no one would dream of selling them or more likely (check for listings) they are not particularly desireable.

Bottom line, the appraiser should always compare apples for apples and also... please don't judge whether the home is modular or not by the photo... look for HUD tags, check the construction, look for a data certification on the inside of the home, something. As I said earlier, there are many modular homes in my marketing area that I would defy the typical appraiser to tell the difference between them and a "manufactured" home.

 

[Jo Ann Meyer Stratton]

A great big ditto to every word in PKBarnhart's comments!!!! It doesn't matter what it looks like or the construction materials! If built in a factory to HUD building code--it is a manufactured home. If not built to HUD code it is a modular home, kit home, panlized home--whatever. And the comparables should be the same building code to determine what the market's reaction is in that specific location to that specific type of building code in that location. What other homes would a prospective buyer really look at and consider? It might be a beautiful home, very well constructed, many upgrades, amenities, etc--but if built to HUD code, many people automatically think "trailer" and so would not even look at it, let alone consider buying it. By the way PK what state are you in? Include a copy of Fannie Mae's Announcement 02-02 with your review
Get a copy at:

http://www.efanniemae.com/singlefamily/ori...ouncements.html

 

[Jo Ann Meyer Stratton]

Oh yes, I forgot to mention. Go to the naifa.com website, click on chat room, click on General, scroll down to an article posted about manufactured homes, predatory lending. Include a copy of that article with your review!