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The Differences between Chattel Mortgages and Traditional Real Property Mobile Homes Loans
Tue 08/18/09 07:59:16 pm
by Josh Ladick

The recent changes in the American banking system have made the distinction between a chattel mortgage and tradition real property financing more important than it used to be. When buying a mobile home or manufactured home, the first thing your broker will ask is if you will be buying with land or home-only.
CLICK HERE FOR MOBILE HOME LOANSEveryday I am asked about the differences between mobile home loans and real property site built homes, and how these differences affect the mortgage loan processes for these homes.
Generally speaking, a manufactured home mortgage is a written document which gives a creditor an interest in the property of a borrower to secure payment of a loan debt. While this broad definition blankets all mortgage loans, the different types of homes, or collateral, are what draw differences between manufactured home, or chattel, loans and traditional stick built home mortgages.
In the United States, chattel mortgages are referred to as secured transactions. Such transactions are governed in most states by Article 9 of the Uniform Commercial Code. When obtaining a loan for a manufactured home, a borrower will be entering into a chattel mortgage. The purchaser or home owner is borrowing funds for the purchase or refinancing of movable personal property (the chattel or manufactured home) from the creditor. The creditor then secures the chattel loan with a mortgage over the manufactured home as chattel, or the manufactured home itself. The Legal ownership of the chattel is transferred to the creditor, and the registered ownership is given to the purchaser, or the homeowner, when the loan transaction has been completed.
Mortgages for traditional homes that are built on site and include real property are a bit different from chattel, or mobile home loans. A mortgage for this type of mobile home is a loan secured by real property through the use of a Note, which is a document that evidences the existence of the loan. Real property mortgages and loans can and should be additionally evidenced by a Deed of Trust document, which is recorded with the County Recorder. The Recorder is a county official that insures that instruments are recorded, giving public notice of such transactions. The Deed of Trust for the mobile home will be recorded CLICK HERE  FOR FREE SEARCH MOBILE HOMES FOR SALE NEAR YOUwith the County Recorder of the County where the real property is located.
Manufactured home mortgages, or chattel loans, are not secured in the same fashion as real property loans. The title information for manufactured homes is maintained by The United States Department of Housing and Urban Development. In the State of California, The Department of Housing has "Registration and Titling" offices that are specifically assigned to maintaining the title information on Manufactured Homes. The homeowner, or purchaser, of a manufactured home shall be shown on the title as the registered owner, and the creditor shall be shown as the Legal Owner to the manufactured home. When a manufactured home is encumbered by a Legal Owner, the genuine Certificate of Title to the manufactured home is handed to the mortgage creditor, or legal owner. The manufactured home owner is handed a Registration Card, which evidences the homeowner's Registered Ownership interest in the manufactured home. With site-built, real property homes, the homeowner retains a Grant Deed to evidence their ownership in the home, and the creditor maintains the Note and Deed of Trust to evidence their ownership interest in the real property home.
It's helpful to understand these title and security differences, as they play a major role in determining the actual loan type, qualifying agents and the loan process itself. Mobile homes and real property site built homes are not only made differently, but titled differently and mortgaged uniquely as well. For more information on mobile home titling, visit The HUD website.
About the Author: Josh Ladick is with the San Diego Mortgage Group  ,  a mortgage funding and brokerage firm, with a specialty in mobile home loans. They are located in San Diego, and have financed hundreds of loans across California, however they can finance loans for chattel mortgages across the USA. For more information: || San Diego: Mobile Home Loans or Refinance || California: Manufactured Home Loan || United States: Manufactured Home Finance

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