Dodd-Frank Act Damaging Manufactured Home Financing Options
Posted on: September 25, 2015 by Aegis General
As the fifth birthday for the Dodd-Frank Act approaches, the House of Representatives and the Senate are reevaluating its effects on homeowners. While it was originally created to protect consumers of manufactured homes, it is actually creating problems for potential homebuyers instead. Financing and Insurance for Manufactured Homes are essential components of the manufactured home buying process, as are understanding the intricacies of the various documents and regulations involved in the process.
According to Beltway Insiders, the Dodd-Frank Act is preventing everyday Americans from accessing the financing they need to purchase quality manufactured homes they can afford in their communities. This is a direct result of lenders categorizing the loans as “high-risk,” even though the loan’s interest rates are fixed, and the homes are more affordable than traditional brick and mortar homes. What’s more, loans for manufactured homes are not susceptible to balloon payments, negative amortization, and prepayment penalties. As such, the Dodd-Frank Act has acknowledged the necessary accommodations for smaller loans, yet the thresholds are inadequate.
Another issue affecting manufactured home buyers is that manufacturers of these homes are considered “loan originators” as they offer advice on how to properly finance the home. However, any real estate agent can provide this information to a traditional home buyer, as well.
Put simply, current manufactured home owners are losing equity as home values drop because potential buyers cannot get financing and in turn, this is forcing qualified buyers to settle for less optimal housing alternatives, as indicated by Beltway Insiders.
As rural American towns are heavily populated with manufactured homes, these consumers are affected the most. Pending legislation to improve the financing regulations for manufactured homes is currently being reviewed. The Preserving Access to Manufactured Housing Act would continue to defend potential home buyers from predatory lending and financing options would be restored.
Manufactured home sales have increased tenfold in recent years and at Aegis General Insurance Agency, we strive to protect clients’ largest investments- their homes. We understand the risks associated with these structures and strive to safeguard property and assets against their unique exposures. For more information about our operations, we invite you to contact our specialists today at (855) 399-0966.