Is there a such thing as loan default insurance?
 

I have a manufactured home that need to sell and move off of my property. Lots of prospective buyers but nobody with enough cash to do the deal outright so, I may have to carry the paper.

Even if they make a substantial down payment, I want to make sure that I'm covered if they decide to default on the loan.

Is there any sort of insurance that deals with this?

How old is it? I know in Virginia, you often can't give them away for free and actually have to PAY someone to take the damn thing. If you can get someone to pay you even a little to take it, you may be ahead -- if they stop paying, just "forgive" the loan and send a statement to the IRS. Let the dumbf**ks enjoy tax problems for the next few years.

credit default swaps but i am not sure that it is available to individuals.

Look into mortgage insurance. Most lenders require it if the buyer is putting down less than 20%. My understanding is that it protects you (the lender) if the buyer defualts. You still get paid. The buyer has to pay the premium. When you here the acronym "PMI" (principle mortgage insurance) this is what they are talking about.

Thanks for the tip. Will explore.

I thought in general credit was still fairly easy for the majority of the population. I would want clear of it as the dwelling is not tied to any specific piece of property once removed. Or there would have to be some pre existing paper tying it to one somehow.

Much like selling a house trailer perhaps. If damaged during the move would they walk and leave you holding the bag? What if the lot it was placed on came under duress?

I do not think there will be any form of affordable insurance to cover all the potential risks in your situation. Could be very wrong though.

Any resultant legal action would come to you as the purchasers would have nothing basically. Especially if they cannot at least finance what you are selling. I can see the average lender not being estatic about it either.

Maybe find a nice mobile home park to put it in and either rent it or do a rent to own deal where the buyer does not actually have possession of the trailer.

Or possibly a trailer park would be interested in purchasing so they could rent it.


Chances are if a buyer can't come up with the money, they won't be able to swing the PMI payments either.

Your probably not going to get PMI on a trailer as its not "real (estate) property" Its a vehicle and unless there is land involved your not going to have a "Mortgage". You could have the seller purchace a default bond, but that could be pricey for the buyer without significant credit experience.

why can't a buyer get a bank loan for this kind of purchase?

why does it have to be seller financed? If you can get a loan to buy a car or buy a house, stands to reason there must be a process for buying a mobile home.
I don't think id want anyone making payments to me, id rather get all the money up front and my liability end as soon as the bank pays me. Let the bank deal with collecting payments

Kind of my thoughts as well. If I have to collect monthly payments, I want it to be rent.

What kind of other collateral do the buyers have? Any equity in any vehicles or equipment?

My uncles partner loaned someone $10k one time and got the title to a sweet mid 80's 911 Porsche as collateral. That loan worked out pretty well.:D

Questions anyone can answer:
I am not sure what a Manufactured Home is?

Mobile Homes depreciate in Value; is that the same with Manufactured Homes?

Banks don't like to give loans on things that depreciate like a Mobile Home unless the Realestate it is on comes with it.

My Step Father had a Mobile Home and the Mobile Home Park did not allow Mobil Homes over 20 years old and He was supposed to get it out of there. For them to move the Home was several thousand Dollars even if He had, had a spot to take it to.

For the most part 'manufactured' is a fancy name for 'mobile'. Now to be fair, there are some manufactured homes that are quite nice but I believe a manufactured/mobile home is basically the same things in terms of the fact that the house comes to you on wheels and can depart the same way.

Yep. Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world.

If it can be equiped with or has wheels. Not the best thing to hold paper on.

We have a lot of modular homes locally that come in on trucks. Once on a foundation they become normal homes from a lenders perspective.

I am now undertanding why many prospective purchasers can not get credit to handle it. You probably have to be pretty solvent to buy one of these used as far as banks are concerned.