How does a voluntary reposession of a mobile home work?
Manufactured Homes October 6th, 2009If you live in the state of Texas, and you want to allow your mortgage company to voluntarily repossess a mobile home, how does that process work? (ie do you owe anything to the mortgage company since the home is still being financed?)
October 6th, 2009 at 9:08 pm
Here is how it works:
You agree with your lender to move out of a certain date, depending on the lender, they may send you paperwork to complete attesting that you are walking away from the home.
By doing this voluntarily you are saving the lender court and legal fees that would be your responsibility in the long run anyway.
The lender will put the home up for sale and now accept bids on the home, the highest bid will be accepted.
Next the lender adds your principal balance, interest due to the point of sale, any court costs and attorneys fees to come up with the amount you owe. Deduct this from the sales price and you are either owed money or owe the lender money. I have been in this business for years and you will normally owe money and lots of it at that.
If you owe money, you will be sent a demand letter for what is called the deficient balance. This is normally in the thousands as most repossessions are sold for 50 cents on the dollar.
If you do not pay the deficient balance, the lender will spend a few months trying to collect the balance and will then charge it off and then sell it to a third party collection agency who will be your new best friend.
Your credit report(s) will now show 2 trades from the lender, repossession and then charge off, plus another from the collection party who bought the outstanding balance.
From this point forward, you will most like be unable to obtain credit with the outstanding unpaid collection.