For more than two decades, Kimberly Burnworth has lived in rural West Virginia in a mobile home her grandfather acquired in the 1960s. A single mother, Ms. Burnworth is paid by the government to care for her 11-year-old son, David, who has muscular dystrophy.
Between food, drugs, and a $61,000 mortgage, money is a constant concern. Increasingly, Ms Burnworth is also worried she will be evicted. He hasn’t made a mortgage payment in the nearly two years since he lost his job. Lender – Warren E. A company controlled by Buffett’s Berkshire Hathaway — 21st Mortgage — is trying to foreclose on his home. And the federal moratorium on evictions during the pandemic ends this month.
In May, a local judge briefly bought Ms. Burnsworth off after she temporarily barred 21st Mortgage from closing and delayed a trial until this fall. She said she has the money to recoup her mortgage payment of $507 per month, but can’t afford the $14,900 that the company also wants to make up for the missed payment.
“I’ve made mistakes, but they won’t work for me,” said Ms. Burnworth, 50.
An estimated 22 million people in the United States live in mobile homes, which have evolved over the decades from travel trailers to structures that can be delivered by a truck. Typically containing one or two bedrooms, and officially known as manufactured housing in the industry, they have long been known as affordable homeownership for the working poor, people with fixed incomes, and retirees. is.
But banks often won’t lend to mobile homeowners, partly because the loan amount is too low to be profitable and because the federal government usually doesn’t guarantee those mortgages. Instead, the mobile home financing market is dominated by five lenders including 21st Mortgage and Vanderbilt Mortgage — two units of Clayton Homes, a Berkshire Hathaway business.
The pandemic hit owners of mobile homes particularly hard. In August, the Urban Institute, an economic and social policy think tank, Reported That 35 percent of mobile home owners worked in industries that had lost the most jobs during the pandemic.
But government efforts to save them have been weak. Initially, federal housing agencies instructed mortgage firms to defer payments for struggling borrowers, but many mobile home owners were not covered by those guidelines. The $1.9 trillion American Rescue Plan Act signed into law in March included $10 billion for one homeowners assistance fund, which sets aside money for the most vulnerable homeowners facing foreclosure. State officials lobbied the Treasury Department to ensure that some of the money goes to residents of mobile homes. The Treasury is expected to issue new guidance soon on how the money can be spent.
Meanwhile, owners of mobile homes had little choice but to rely on the good qualities of major financing firms.
As Ms Burnworth found out, it can be tough. Her unemployment check was not enough to cover her costs after she lost several short-term jobs, including one with the Census Bureau. She sought a loan modification from 21st Mortgage to lower her monthly payment, but she said the company was unwilling to offer her one—even though she would get regular checks from the government in August to care for her son. has started.
In a statement, 21st Mortgage’s parent company, Clayton Homes, said it did not undertake a loan modification, believing that offering short-term loans to borrowers for missed payments works better. The company said that while it faced financial problems in previous years and did not seek repayment, it provided Ms. Burnworth a credit totaling $3,649 for her mortgage.
“It’s my responsibility to look after and pay for the house, but it’s hard to have a job when your child is sick,” Ms. She said she has already paid off more than $130,000 in principal and interest over the life of the loan, which carries an interest rate of 9.25 percent. Clayton disputed the amount she paid him and noted that he did not have a loan for the first few years he lived in the house.
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June 22, 2021 at 10:22 am ET
While Ms. Burnworth owns the land on which her mobile home sits, many mobile home owners rent space from mobile home park operators, which are increasingly run by large real estate firms. This arrangement means that mobile home owners may find themselves paying both a finance company and a real estate firm – increasing their chances of being evicted if they get into financial trouble.
are already signal When the relief ends after the moratorium and the pandemic, evictions could increase. A review of eviction filings in six states by the Private Equity Stakeholder Project, a non-profit advocacy group, found five large mobile home park operators on a list of 150 corporate landlords filing the most eviction actions since the federal moratorium. . Effective in September.
Raul Noriega, attorney for Texas Riogrande Legal Aid, which specializes in built-housing cases, said an eviction for not paying rent to the park operator could equate to a mortgage foreclosure because it cost several thousand dollars to move the trailer. can be.
“When you lose, you often lose your house,” said Mr. Noriega.
About 42 percent of owners who borrow to buy a mobile home typically don’t get a traditional mortgage, which comes with consumer protections that can make foreclosure difficult. Instead, they buy their trailers with a high-interest “chattle loan,” which courts treat as a contract and can expedite court action.
In New York courts, at least a dozen possession actions of trailers purchased with property loans have been filed in recent months — setting the stage for those homeowners’ speedy evictions. a recent report Chattel loans, with an average interest rate of 8.6 percent, were found by the Consumer Financial Protection Bureau, often taken by black, Hispanic and Native American borrowers who couldn’t afford the $70,000 price of a standard built home.
Clayton said two of its subsidiaries had approved delays in payments for 39,000 borrowers during the pandemic and gave about $6 million in credit to its customers over the past year to keep their accounts running. Another lender, Triad Finance, said it had also offered deferred payments to borrowers struggling during the pandemic.
Triad’s parent company ECN Capital said in a statement that the lender had approved 3,000 forbearance applications, but only 500 of its borrowers had taken advantage of them. But there is little industrywide data on the requests for forbearance granted during the pandemic or the actions of mobile home occupants.
Timothy Bruhn, a mobile home owner in the Winterset Farms community in Wilmington, Del., said he had recently stalled an attempt by the park’s operator to evict them. The operator of a California real estate firm said he had violated the rules for grilling too close to his home, which was denied by Mr. Bruhn. But he is concerned as the company has decided to appeal against the decision.
Mr Bruhn, who is 65 and was fired from his job at a demolition company during the pandemic, said he owned his own house but paid $725 a month to rent his place. did. He said he would have difficulty finding money to move the trailer if he was evicted.
“I’m stressed out,” said Mr Bruhn, who said he believed the operator was kicking him out because he is president of the trailer park homeowners association. “I’m walking on eggshells because I don’t know what they’re going to complain about next.”
A lawyer for Mobile Home Park said the company did not comment on active litigation.
It’s also a stressful time for those who rent their trailers to mobile home parks.
Harvetha Browning, 58, who rents a two-bedroom mobile home with her cousin in suburban Woods Mobile Home Park in Union City, Ga., said she was served an eviction notice in April. She said she and her cousin were left behind on $924 monthly rent because both had recently had unstable incomes and health problems. Ms Browning, who had Covid-19 last summer, was about to return to work as a house cleaner after she was injured in a car accident, she said.
Ms Browning said her legal aid attorney was trying to get her rental assistance to help cover overdue rent. But he also said that the owner of the park has made it difficult for him by not paying the partial rent or doing necessary repairs to the trailer.
“I want them to treat me fairly,” said Ms. Browning. A lawyer for Parks said his clients were trying to settle the matter.