How to buy mobile home paper - Posted by Jocelyn Arnault

Posted by John Merchant on January 27, 2004 at 13:11:52:

E.G., in my state of WA (when it’s not the state of panic ;))the law is that if the loan has a statutory usury interest rate, and anybody is made to pay MORE than that rate, the loan is therefore (to that person)illegal to such an extent that the lender cannot get ANY of his loan repaid.

So when a note is being bought at a discount, and a higher return than legal is resulting, and anybody is made to pay that higher rate, it is illegally usurious, as to that person.

We have a WA Supreme Court case that said, to the original seller, who sold his note with recourse, his being made to pay that note when the buyer defaulted, it was usurious to him, so the poor note buyer had to “go hence without day”…meaning he didn’t get his money back.

The thing that saves us here in WA is a statute that ALL personalty (things other than RE) have NO usury rate on seller carryback loans…even when the money is coming from outside lender with a simultaneous sale of the note, at closing, to a lender like me.

I like these MH, in MHP, loans, just because there’s no WA usury rate on personal property, and I’ve done a number of them.

Just make sure what your state law is as to usury so you don’t accidentally make an illegal loan you can’t later collect upon.

I recommend your lawyer guide you through the legal maze on the first one you do, so he/she makes sure you’re not making a usurious loan.

How to buy mobile home paper - Posted by Jocelyn Arnault

Posted by Jocelyn Arnault on January 25, 2004 at 17:22:47:

I would to know the procedures of buying mobile home notes?

Re: How to buy mobile home paper - Posted by Dan - GA

Posted by Dan - GA on January 25, 2004 at 21:17:43:

  1. Find someone who sells and owner finances MHs in your local area.
  2. Meet them to see want they do, and if you like the way they do business.
  3. Offer them a fair purchase price. ie your discounted offer should not make them loose money on their purchase and rehab.
  4. Require full recourse from the local seller.
  5. Pay Seller for the note.
  6. Collect monthly payment directly or through seller.
  7. Repeat steps 3-6 often.
  8. After you are omfortable with that seller, repeat steps 1-7 with additional sellers.
  9. Have Fun!

I’m in North Georgia and have a park in Central Georgia, if you’re close and would like to meet to discuss a deal.

Dan