Did I buy a car (mobile home) or a house with land? Lender failed to foreclose on mobile home.
Many investors in real estate properties and mortgage notes
ran into a problem with mobile homes on land where the property is located. How do you find out if the mobile home is a part of the real property or registered as a car at the DMV (Department of Motor Vehicles) office? Can an investor lose rights to the mobile home and still own the land?
First a few basic items on how the mobile homes are registered. A mobile home starts with a trailer on wheels with a car title registered at the county DMV office or similar department. There is a car title issued for the mobile home as proof of ownership. If the mobile home was financed, the mortgage details are typically mentioned in the body of the car title document.
If the owner of the land chooses to live in the mobile home without converting it to real property, the legal description for the real property will describe the land, as well as mention that the mobile home with VIN is located on this land. The owner of the land will need to pay real estate taxes for the land with mobile home assessment and/or maintain an active mobile home “car” title at the DMV office by paying yearly dues.
The owner can choose to convert the mobile home to a permanent house by taking the wheels off and mounting the mobile home onto a permanent base fixture, connecting electricity, water and sewage.
From the document perspective, the conversion is done differently in each state. Most states require an affixture affidavit of mobile home to the land. Also needed is a retirement of car title at the DMV office and the recording of a UCC (Uniform Commercial Code) in the county of the home location representing any open mortgage against the mobile home. If the owner takes out a new mortgage during conversion, it’s important to make sure that the mobile home mortgage assumes junior position by recording the UCC after the mortgage that has both land and converted mobile home as collateral.
There are many ways to identify the mobile home through review of real estate records:
- Assessor summary
- Legal description
- Affixture Affidavits or Certificate of Title (in Texas)
- Tax Collector separate mobile home account
- DMV active account under the property address
Assessor’s summary example below: