Why to Avoid a Foreclosure on your Mobile Home

Homeowners who are delinquent in payments and struggling due to deficient equity are often at their wits end and desperate for help. If you are facing a foreclosure on your mobile home, you may want to think twice and try to find an alternative. A short sale could be a great alternative to foreclosure and one that deserves serious consideration. Manufactured home owners often don´t realize that the consequences of a foreclosure are very different than those of a mobile home short-sale.

Financing for any other mobile home purchase will be nearly impossible after a foreclosure. A manufactured home owner who loses their home to foreclosure is ineligible for a Fannie Mae loan for five years. However, a mobile home owner who negotiates and closes a short sale will be eligible for manufactured home financing after only two years. Manufactured home investors are held to even stricter penalties. The mortgage crisis has brought on excessive financial penalties for manufactured home owners who default.

In a foreclosure, the mobile home owners credit score may be lowered anywhere from 250 to 300 points. It can take upward of three years to repair a credit score after a foreclosure on a mobile home loan. Usually in a short-sale situation, only the late payments on the mortgage will show effect the credit report. After the mobile home is sold, it will be reported as paid or negotiated, which will only lower the credit score around 50 points. The effect of a short sale can be as brief as 12 or 18 months. A foreclosure will remain as a public record on a person´s credit history for 10 years or more.

Another consideration is that in every manufactured home foreclosure the bank has a right to pursue a deficiency judgment. In some short sales it is possible to convince the lender to give up the right to pursue a deficiency judgment against the mobile home owner. A foreclosure requires the manufactured home to go through an REO process if it does not sell at auction. In many cases this results in a lower sales price and longer time to sale in a declining market. The ultimate result is a higher possible deficiency judgment. However, in a short sale the home is sold at a price that should be close to market value and in almost all cases will be better than an REO sale resulting in lower deficiency.

You can not put a price on the peace of mind in avoiding a foreclosure on your mobile home. The satisfaction of knowing you have done everything possible to satisfy your debt is priceless and long lasting. This may be the most important reason of all. And when you consider the long-lasting consequences of having a manufactured home foreclosure o your record, it is in your benefit to avoid the process. Having a foreclosure on your record is similar to a bankruptcy, when trying to get financing for a new manufactured home purchase.

If you would like to finance a mobile home loan within 5 years, then avoiding foreclosure is vital. The best options for you may be in a professional, with experience in real estate and loan restructuring.