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21st mortgage corp repos

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21st mortgage corp repos

Postby » Wed May 20, 2009 7:39 am

My wife and I have been looking at purchasing a doublewide repo from 21st mortgage corp. My understanding after talking to sales reps at different dealerships that have repos on their lots is that the price of the units are determined by what was left on the original note (bascially what 21st has tied up in the unit) and that there basically is no negotiation on sales price...

The homes that we've looked at and really like are 4-5 bd 2-3 baths units that are priced between 45-50K...The two or three that we really like seem to be well made houses and all have been newly painted and textured, new carpet, etc. One of the downside to the homes that I know of is that there wouldn't be a warranty, possible used appliances and air conditioner (depending on the particular house).

I have a friend that bought a used doublewide and bought a warranty thru a company for about $50 a month that would cover most of the items that I'd be worried about like appliances, air, furnace, etc...So I'm assuming that there are possibly other companies out there that offer something similar.

All the units that we've looked at have been manufactured in the 1997-2000 year range...

I've had several reps say that we could get a better deal on a new home but we're really not interested in a new home because it would cost about 35-40K more than the repos that we've looked at...Another factor in not wanting a higher priced new house is the fact that we'll be doing a land in lieu loan for the down payment and the down payment on a repo thru 21st is 25% down versus 35% for a new house...Our credit is not good at this point so unless we want to come up with 10-15k down at closing or wait until we get our credit scores improved it seems to us that the best solution for us is to go with a nice repo unit that best fits our needs...

So the question(s) that I have is has anyone had dealings or have knowledge of 21st Mortgage corp and their remarketing/repo division/dept. What is the best way for me to acquire a true market value to see what the units are really worth?

What are some of the pitfalls or redflags that we should be looking for when buying a reconditioned repo?

Here is the info on the last home that I looked at.....

1997 Southern Energy
28x76
5bd 3ba
electric range/furnace
hardboard siding
shingle roof
ceiling air vents (not floor)
hardwood cabinets
new fridge & carpet

Asking price for the above unit is 46K plus 6k set up and delivery...In case it matters, the house is in Texas and would be set up and delivered about 45 miles from where it currently sits on a dealer lot...

Did/Does Southern Energy make a good home (because it looks good on the outside)? This house has everything from bedroom, kitchen, dining room, living room sizes that were looking for and it has less of a double wide feel to it than many of the lower end brand new homes that most of the reps seem more than happy to want to sell to us...

I know this was lengthy, however, I would greatly appreciate any and all feedback..

Thanks...
mmonroe offline
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Joined: Wed May 20, 2009 6:43 am

Re: 21st mortgage corp repos

Postby » Wed May 20, 2009 5:53 pm

Regardless of what the sales people are telling you all home sales are negotiable especially at this point in the economic madness. In order to negotiate you need to bring something to the table that makes the deal sweeter for the other party. Example - a bigger down payment - a higher credit score to give them greater security - a faster closing date - etc....

The facts of life on repos are that they cost the bank money every day they own them. A repossessed home is a non-performing asset for the lender. Not only are they nor making the money from the payments but now they own a home that they have to cover for insurance, taxes and any expense needed to maintain the home in sellable condition. There is a daily cost, higher than most people might assume, associated with each and every home that is in the banks repo inventory.

In almost every case the bank looses money on a repo. The rule of thumb for most remarketing managers is "First loss. best loss". It matters not what the bank may do, they will loose. As that loss grows daily it is best to stop the bleeding and get that home off the repo inventory. So a no negotiation policy would go against the best practices of the banking/lending business.

Many lenders set their resale prices based on percentage of their investment. I have found that most are hoping for a 75% return. For example if they have $100,000 invested in a loan they will set the resale price at $75,000. This is just a good rule of thumb. There are lenders that shoot for a higher or lower recovery, depending on times and home condition. Lenders expect a certain level of repossessions and have a budget to cover those expenses... BUT In times like these when most lenders have more repos then they are comfortable with, they will generally lower their target price to reduce their repo inventory. If you have a way of finding out the amount owed the lender you will have the most valuable info for negotiating a lower price.

21st Mortgage and Southern Energy are both owned by Clayton Homes. Clayton has emerged as the class act of the MH industry with its conservative financing and fully integrated business. You tell us that your credit is "not good". In that case a repo is your best chance of getting financed. More than once I have been able to get a loan on a repo for customers that could not qualify for a new home. Unless you have some way of increasing your credit rating you would be wise to shut down all noise about a new home and concentrate on making the best deal possible on a repo.

Talk to the dealer about the extended warranty type service contract. It is a great advantage to you and the seller to have the house covered so the seller never has to deal with or even hear about any problems after the sale.

21st has most of their repos listed, with the price they hope for, online HERE See if you can find the home your shopping or others that would work for you that are within 100 miles for a first hand picture of what is available and the prices they are willing to take.
David Oxhandler
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David Oxhandler offline
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Re: 21st mortgage corp repos

Postby » Thu May 21, 2009 5:01 pm

My wife and I purchased a new Southern Energy home last November, moved in when I retired in March and are very happy with it. We did years of research and feel that Southern Energy is an excellent home.

Southern makes three different types of homes. The entry level is Southern of Texas, the mid level home is Southern Estates, and the high end home is Southern Energy which are made in Alabama and is a much better built home than the other two.

Just to give you some idea, we paid about $100k for the house which is a four bedroom two bath 2150 square feet plus land prep, utility hook-up, etc. You might want to check and make sure the $6k set up fee includes land prep, electric, water, and sewer/septic just to make sure there are no surprises.

I wish you the best.
Celtlund offline
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Joined: Sun Jun 08, 2008 7:07 pm

Re: 21st mortgage corp repos

Postby » Sat May 23, 2009 10:14 pm

Is 21 Mortgage and Vanderbuilt the same company? (Clayton)
dwf
faustdw offline
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Re: 21st mortgage corp repos

Postby » Sun May 24, 2009 1:14 am

they both are divisions of Clayton Bank
David Oxhandler
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David Oxhandler offline
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