Can I replace my single wide after an FHA re-fi?

[Spectramac]

We just signed papers today. We had hoped to buy a used double-wide to replace our old single. As we were signing the last few papers it started sounding like we could get into trouble removing this house due to the property "trust" issue. We've heard some people say you can do it and the bank would 'most likely' never find out, but what would happen if they do??? My real estate guy said, "well, you could do it, but you'll never finance it again." I was thinking that if I was to do something else in the future it would be to replace the double with a new one or build a stick house. I figured at that time I could just do some form of construction loan, right? I just don't want to shoot myself in the foot removing a factory moved home for a 2nd move and finding out I'm screwed.

Thanks

[rmurray]

If you did a real estate mortgage and included the home with the land.. You cannot legally move the home till the whole mortgage is paid..If you build a stick home on that property it becomes part of the manufactured home mortgage as well..If you are dealing with the FHA your real estate man is VERY correct.. It is hard to get a mortgage while in federal prison..Most mortgage companies frown on lender fraud..

[Spectramac]

It sure seems odd that I can't put a nicer home on the property without going to jail???

[David Oxhandler]

There is nothing odd about it. Your home belongs to you BUT you borrowed money against it. The lender has a legal and economic interest in that home that you can not deny. 'till you repay that money they have rights that protect their interest in that home.

You can put a different home on the property but you must get the approval of your lender and work out the details with them. In most cases the lender will not have any reason to deny switching out homes if you do the paper work and pay the costs to transfer their lien to the newer home. This is especially true if the value of the newer home is greater than the old.

[Spectramac]

Well that at least sounds a little positive. I don't have a problem doing that IF they will work with me. So far they have been unwilling to do anything with the newer home we were looking at because of the dreaded '2nd move' issue. That's why we had to do it the way we did. I've heard so many opinions on this the last few days it makes me dizzy. Everything from 'just do it, they'll never check on you' to 'federal prison'. Right now I'd welcome a little cooperation from the bank.

[rmurray]

Just remember it was NOT the bank being uncooperative about the dreaded "2nd move rule" The rule is a FHA regulation the bank MUST abide by. Just remember as long as the mortgage is open the bank will HAVE to abide by them strictly. The FHA is a government agency whose employees will spare no expense to defend and protect the governments rules. In the future as long as the mortgage is still outstanding the mortgage company or bank will HAVE to strictly conform to the FHA rules. It is NOT a matter of choice or logic for them. Of course you could have avoided all this by using a conventional mortgage company but you probably would have had to have a MUCH larger down payment. In the future you may be able to get your mortgage company to refi your mortgage as a conventional mortgage. This is particularly possible if you are making substantial improvements on the property adding increased value. Mussing with the FHA while they are involved is like playing with fire while holding an open container of gasoline in your hand. Good Luck

[Spectramac]

We tried to do a conventional loan first, but they wouldn't do it with a single wide on the property. Almost feels like I'm in prison already...

[David Oxhandler]

Mac -

1 - How did you feel the day that the lender granted you the FHA refi?

2 - Did you read thru the loan agreement and understand what you were signing?

You are not in prison just under an obligation... that you clearly signed your name and agreed to. All you need to do to be free of the obligation is to pay back the money you took under the terms that the lender had a lien on the home.

As we have suggested over and over on these forums - Never sign anything that you have not fully read and fully understand.

[Spectramac]

Funny thing you should ask. After 2 months of jumping through hoops to get it, we were happy they finally approved us. Then after signing we felt even worse as we realized there was no legal way to do what we had planned to do. We knew what we were signing, but after spending so much time and money to get there we couldn't really tell them no. It's a long story, but I would definately tell people to steer clear of Wells Fargo with a mobile home. Looks like I get my shop but the wife has to wait for her bigger house.

[Spectramac]

So now I'm thinking, build my shop, upgrade things INSIDE the house and bank the remainder for a few months for a down payment on a new mobile. Think the dealer can come up with a legal way out for us?