Should I send original title?

[Kanika Tate]

What is the name of your state (only U.S. law)? Michigan

The loan on my mobile home was recently transferred from a local company to a company in Illinois. They requested I send my original title so they can do a lien transfer. Should I send the title?

 

[nextwife]

If they bought the DEBT, I don't understand why they'd need the original title. They should have an assignment of the note and the security interest.

 

[justalayman]

If they bought the DEBT, I don't understand why they'd need the original title. They should have an assignment of the note and the security interest.

I suspect so they can register a lien on the title in their name.

The original title holder will release the lien since they no longer have a lien on the MH. The new lender will register a new lien on the title.

Also, in Illinois, the lien holder retains the title until the lien is released. In Michigan, either the lien holder or the owner may hold the title.

 

[Kanika Tate]

How do I know if the original lien holder has released the lien?

 

[nextwife]

I'd suggest she try to contact her state's department where these are registered and check what would be required. Normally, an assignment of debt does not require action by the borrower to rerecord the lien. I'd also check with the prior llienholderr to verify the debt was sold and to whom, before sending off title to a party that may be scamming her.

 

[justalayman]

I'd suggest she try to contact her state's department where these are registered and check what would be required. Normally, an assignment of debt does not require action by the borrower to rerecord the lien. I'd also check with the prior llienholderr to verify the debt was sold and to whom, before sending off title to a party that may be scamming her.

I definitely agree with checking things out before sending off the title. Even if you end up sending the title, there is no reason to sign off on the title though. The transfer of lien holders can take place without the owner signing the title as that would indicate the owner transferring interest to some other party. That is not what is happening.

Normally, an assignment of debt does not require action by the borrower to rerecord the lien

this is very different that real estate. It is the same system as a motor vehicle. There is no recordation of security interest like there is with real estate other than the notation on the title. That lien and the contracts involved are all the proof there is of a security interest. One would definitely want the current lien holder to be listed on the title. If you don't, it could cause a real PITA later on when one wants to pay off the lien and obtain a release of the lien.

 

[Kanika Tate]

I already checked, and the sale of the debt is legitimate. The first notification came from the original lien holder. Payments to the new lien holder have been made for 5 months. I ignored the first request for the title, but they sent a second request and have been repeatedly calling me. I stalled them by saying I am trying to locate the title. I talked to my ex-husband, who was the one who always took out the loans for our vehicles and everything else. He said he never had to send a title or do anything except change the destination of the payment when a loan was sold. He told me not to send it, but I wanted to check with other people who might have more knowledge on the subject. Am I understanding, then, that I should send it, but not sign off on it?

 

[justalayman]

try to contact the original lender to ask them if they are releasing their lien on the home.


then, ask the new lender why they want the title. It may be simply because the different state has different rules as to who holds the title when there is a lien on it.


most definitely do not sign the title, no matter what is going on here. That is only for when you are relinquishing your ownership, which is not the case.



If the original lender is releasing their lien, I would ask the new lender to send you their application for a lien and you send it in to the state (Mi) to have the lien changed to the new lender.

and realize, a certificate of title is only a physical manifestation of the intangible "title". You can always send away for a new copy of the certificate of title from the state.

 

[Kanika Tate]

Thank you so much for the advice. This was a big help to me.

 

[nanu156]

Michigan Secretary of State

Michigan SOS handles titles to vehicles and mobile homes (personal property, not to be confused with "REAL PROPERTY")

They can file for title with Michigan SOS and they will be granted the proper title.

If you would like you can go to any SOS office that has "quick title" and apply for a duplicate, it's 20.00 I believe. Then send them the dupe. But honestly this is their problem they will sort it out. Try telling them you don't have a copy.

OH an in Michigan the owner of the property retains the title, it bears the lien-holder's name.

The SOS is who can help you with this. Have fun... Always a good time at their offices lol. (you want to go to a Super Center, btw check the website to make sure that you go to one that does quick title)

 

[justalayman]

OH an in Michigan the owner of the property retains the title, it bears the lien-holder's name.
)

but in the new lender's state, the lender holds the title.

I live on the state line (MI and IN) and have used lenders in both and resided in both. It has born out that the rule applied, except for one time (Michigan lender, Indiana resident, Michigan bank held title) is that of the state of the lender, not the owner. I don't know if there is any official guidance to the issue as it has never been an issue but that is how it has been treated in my situations.

 

[nanu156]

but in the new lender's state, the lender holds the title.

I live on the state line (MI and IN) and have used lenders in both and resided in both. It has born out that the rule applied, except for one time (Michigan lender, Indiana resident, Michigan bank held title) is that of the state of the lender, not the owner. I don't know if there is any official guidance to the issue as it has never been an issue but that is how it has been treated in my situations.

They have to comply with the laws in the state that the borrower and property remain in. If borrower were to move her home to another state (which isn't out of the realm with a manufactured home) Then they would be able to go by the rules of the new state.

This is why the borrower has possession of her physical title now.

It would surprise me if the previous lender was actually a michigan lender. (although i suppose it is possible) there are so few lenders remaining who finance manufactured homes I can't think of any that are located in michigan....

In any event with the transfer of a loan the burden is on the lender. If the borrower wants to comply with their requests (which would also be fine) she is free to do so, I doubt harm would come of either solution in all honesty.

She can always go get a duplicate title as suggested for the cost of 20.00 and then be in compliance with the lenders requests as well as retain the title. Or she could send the original title and then go to SOS and request a copy bearing the new lien-holders info in a couple weeks/months... Also for 20.00 (or so, when i lost the title to my minivan (yikes i admitted to minivan ownership) I believe i paid 20.00)

The SOS would be the PROPER place to get these questions answered. They will do so for free. (well the cost of your time spent standing in their long long long lines)

 

[nanu156]

OOOO looks like you can now order dup titles on the expressSOS site... Thats pretty fantastic!!! WOOO HOOOO.....

http://michigan.gov/sos/0,1607,7-127-1585_1587_1588-26228--,00.html

BLEH, can't make that hyperlink clickable... Poster you have to copy and paste it..

BAM!!!! Solution granted!!!

Mork out!

Oh and it's 15.00 because Quick Titles are not allowed on Mobile Homes. They are allowed on vehicles at SOS offices and cost +5.00 (working out to 20.00)

**NOTE**

I would like to amend this post to make it clear that i have never been an originator of loans for Manufactured homes. Once upon a time i closed a loan on a home that was on property worth 1.1mil that had a man home as the only residence on it (typically not allowed, never would fly in today's lending market) the borrower was borrowing like 100K aginst 1.1 mil property value, I remember needing a title to close this particular loan.

I do however turn cars (right sleezy LO also sleezy used car salesman) and mobile homes carry vehicle like titles, I have also had a few car notes in my day get sold, I have NEVER heard of finance companies requesting a title for such a reason. Although I don't really see a need to be concerned about this, we are discussing the legalities of what IMHO is a non issue.

 

[justalayman]

nanu156;3087565

Once upon a time i closed a loan on a home that was on property worth 1.1mil that had a man home as the only residence on it (typically not allowed, never would fly in today's lending market) the borrower was borrowing like 100K aginst 1.1 mil property value, I remember needing a title to close this particular loan.

Seems odd. Why was the structure not detitled and legally attached to the real property? Allowing the title to remain would mean the home is not real property but personal property and as such, divisible from the real property. If detitled and attached to the real property, it makes it a combined unit with the land just like any other house on dirt.

 

[nanu156]

Seems odd. Why was the structure not detitled and legally attached to the real property? Allowing the title to remain would mean the home is not real property but personal property and as such, divisible from the real property. If detitled and attached to the real property, it makes it a combined unit with the land just like any other house on dirt.

Because that's just not how it works... Mortgage companies hate manufactured homes. for instance if you have a home (standard SFR) and an acre behind the home there is a manufactured home (like out in the woods lets say) that home has just been disqualified for a mortgage. Even though that man home is really nothing more than say a motor home or a tractor on the property legally.

There is nothing a borrower can do to turn a manufactured home into real property in the eyes of a traditional mortgage lender, additions, affiliations to the ground, etc do not change the way the lender views the residence. If it once was a single/double wide it will forever remain as such, unless it is dragged off and a traditional residence is placed or built on the property.

in the case I specifically mentioned the property was actually worth more while the home is considered "removable". In the eyes of the lending institute if we were to foreclose on the "real property" we would remove the home and sell the vacant unimproved land. (given its worth at the time 2005ish? was about 1.1m) The finance house made the assumption that any party willing that pay that kind of money for property would not be enticed by the presence of the manufactured unit. My goal was to bring the loan to closing and get paid, not to debate the title or legal procedures with the title company/house. The borrower just needed the cash so they didn't much care how it got done either. At that time loan rates were in the mid 6's and rates for man homes were 9+ so the borrower was happy to just have a closing in the mid 6's.

I don't know, it was a legal and title debacle. We closed it because risk was low and profits were high. Borrower knew they were getting a deal because they had tried to close several other places and had been unable to get to a decent closing. To my knowledge the loan remained fit, the borrower didn't default and payed off the loan... Some time later I did a loan for borrower's mother. I think the loan took 60+ days to close in a time when loans were closing in 15-30 days...

Again industry has changed, that loan would never get funded in today's market. Hard money, credit union, Man Home lender would be the only routes to get financing on such a property today.

Anyway as previously stated that is not really my area of expertise.

To my knowledge manufactured homes don't actually have mortgages (while their property can be mortgaged the home is titled personal property not deeded real-estate) they have personal property loans, as such they are not foreclosed upon at all but repossessed like cars. I know licensing is not required to write loans for man homes...

I have been burned several times when appraisals came in and showed a "single family residence" was in fact a manufactured home thus rendering the property ineligible for mortgage. "well only one family lives there" is a common response from borrowers in this scenario.

that was all very off topic though... Although I am now inclined to research this...