Genius High Performance Energy Homes increase in Equity year after year like any regular "stick built" home! Each Genius Home comes with a Real Estate Title! Your hard earned money creates far better value and equity increase with a Genius Home! Compare these Genius prices with any stick built home and/or any mobile home than you will agree that Genius Homes offer you the best value for your money!
Appreciation in Manufactured Housing:
According to a report written by Kevin Jewell of Consumers Union Southwest Regional Office, investing into a "mobile home" is not a good idea.
For example, a series of focus groups with consumers conducted by Michigan State University found that consumers were very concerned about the depreciation issue. The report indicated that most consumers had experienced or expected depreciation, but some had found their homes to hold value. One consumer said “The minute you buy a mobile home it depreciates. Like taking home a refrigerator. The minute it’s unpacked, the value just plummets".
Consumer Reports®, a publication of Consumers Union, conducted a national survey in 1995 of the ownership experiences of 1,029 consumers who had purchased manufactured homes built since 1977. Two-thirds of the survey respondents estimated that their manufactured homes would sell for less than they had paid for them.
Nancy Mitiguy works at a nonprofit housing agency, Gilman Housing Trust, in rural Vermont. Gilman operates a NeighborWorks® Homeownership Center and a small individual development account (IDA) program. She told Consumers Union: “In our counseling work with prospective homeowners, we address the issue of depreciation of mobile homes. Time and again, we find young families who rush into home ownership and find out later, when they want to sell their home, that they cannot sell it for enough to cover their mortgage. ‘I wish I’d known’ is a common phrase.”
A similar situation faces consumers who have their home repossessed. Consumers Union reviewed the documentation of an El Paso, Texas, woman whom had her home repossessed 13 months after her original purchase. GreenTree (now Conseco) charged her a $10,800 deficiency balance on a $32,600 home.
A deficiency balance is the difference between the principal balance of the loan and the amount for which a lender is able to sell it (plus expenses). Lenders rarely recover the entire loan balance on resale. In 1998 manufactured-housing lenders reported a 75 percent recovery rate.
Investment bankers estimated in 2000 that companies involved in manufactured-housing finance get from 40 to 50 cents on the dollar on repossessions.
In January 2002, a major lender estimated as it left the market that it would get 20 cents on the dollar. This rapid decline in recovery rates reflects a current glut of repossessed manufactured homes for resale, damaging the resale value of used homes.
Investors in the secondary market for securities backed by manufactured-home retail installment contracts are told by lenders that manufactured homes depreciate:
“Moreover, regardless of its location, manufactured housing generally depreciates in value. Consequently, the market value of the manufactured homes could be or become lower than the principal balances of the related Contracts.”
Investors are concerned because depreciation leads to higher repossession rates as homeowners who find themselves underwater in a loan (owing more than the home is worth) simply walk away from the deal, leaving their home and credit behind.
Newspaper classifieds are littered with ads for “abandoned” mobile homes. These homeowners have invoked their option to get out of a bad situation, walking away from the home, and most likely, their credit. It is an unfortunate reality of our legal system that sophisticated institutional investors receive this disclaimer, but the individual homeowner investing in the American dream does not.
Deficiency balances and underwater loans in and of themselves are symptoms of, rather than proof of, depreciation. Factors other than depreciation of the home could lead to deficiency balances. A recent Consumers Union report on sales and lending practices in manufactured housing outlines many industry practices which lead to very high loan-to-value ratios.
Fees, points and overpriced and unneeded add-ons (such as vacations, cash rebates and single-premium credit life) raise the loan balance without adding value to the home. This can contribute to a deficiency balance by removing equity and placing the loan underwater. This is a tricky subject, because while not technically depreciation, these finance costs have all of the negative effects of depreciation. In many cases it is merely a matter of semantics whether a dealer buries extra profits in an inflated price of the home (which would lead to depreciation) or buries the profit in fees on the loan (which would equally eat into equity but not fall in our definition of depreciation). From the larger policy perspective, it does not matter — these mobile homeowners are not building equity.
The full report "Appreciation in Manufactured Housing" can be down loaded by clicking here.
The unstoppable Value Loss on Mobile Homes!
If you are thinking of buying a Mobile Home, think again! For the same price you can purchase a Genius High Performance Energy Home with a Real Estate Title and 30 years structural warranty!
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