by Christopher J. Spurlock
A Very Mobile Week
This week has been one of the longest of my (rather short) reporting career. I spent almost as many hours reporting as I spent sleeping, and when I turned in my story this week, I felt more relieved it was finished than proud of the result.
The story my team worked on was about mobile homes, or more specifically, a new bill in the legislature that will change how the homes are classified. We thought the story sounded interesting and multi-dimensional, but it turned out to be more confusing than anything else.
I’ll spare you the details here because a) I’m exhausted and b) you’ll find them in the text story and TV package below.
Lenders wary of issuing loans to mobile home owners
BY EVA DOU and CHRIS SPURLOCK
When mobile homes are attached to a permanent foundation on a piece of land, they’re virtually identical to stick-built houses in form and function. But they are still different in the eyes of a lender.
“Mobile home owners pretty much have to have better credit than regular home owners to get a loan,” said Bryan Crump, owner of the manufactured home dealership Cedar Creek Homes in Columbia.
This difference arises from the fact that most mobile homes are classified as personal property, similar to motor vehicles. When they’re attached to a permanent foundation, they become real estate, but there is not an established process for homeowners to register the change with the county assessor.
A bill in the Missouri senate sponsored by Sen. Jane Cunningham, R-Chesterfield, would establish a procedure for the conversion, but until then, lenders are wary of issuing mortgages for homes that could be put on wheels and hauled away at any time.
“Companies who make loans, they want to make certain they have good collateral,” said Harry Gallagher, president of the Mortgage Bankers Association of Missouri. “Personal property tends to depreciate rather quickly, while improved real estate appreciates. It’s relatively safe to make a 20-year loan that’s considered real estate, less safe if it’s personal property.”
According to a study from the Journal of Business, few banks provide mobile home loans to consumers on a direct basis. Instead, homeowners must make arrangements with mobile home dealers to get financing.
“We’ve had a lot of individuals that have not been able to obtain a title for a home,” said Tom Hagar, executive director of the Missouri Manufactured Housing Association. “This went all the way to Washington…and has been something we’ve worked on for a long time.”
There are about 200,000 mobile homes in Missouri, about 10 percent of the homes in the state, according to the MU Office of Social and Economic Data Analysis. Kenney Hubble, manager of RE/MAX Boone Realty, said he sees about a customer a month who has trouble buying or selling a mobile home because of its classification. He said it shouldn’t matter whether a home started out mobile if it is now attached to a permanent foundation on a piece of property.
“Someone’s not going to spend $10,000 to attach their mobile home to the ground and not want that to be permanent,” Hubble said.
Cunningham’s bill passed both houses last year, but Gov. Jay Nixon vetoed it because an unpopular amendment was attached. Proponents of the bill said they’re hoping to keep the bill “clean” this year and get it into law, as most other states already have a similar measure.