Restructure Note or Demand payment?

Question

I have a note on a mobile home where the borrower has got behind because of work, around  a grand. They probably owe 4500. 
   I'm thinking of restructuring the note for a fee, maybe a longer term and slightly higher interest rate. The other option is to demand payment of past debt or call the note and move on. The borrower has been pretty lax the last six months, job hopping, etc. I'd like to work with them, but I can only do so much. Any thoughts. Has anyone ever done a loan mod on a Lonnie Deal?

Leslie A. · Answer

Brian,
TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
MANUFACTURED HOUSING DIVISION website has info on this.  You transfer the SOL (like a title) to your buyer, with you as lienholder.  There is a form on the site for foreclosure of lien.

James H. · Answer

Okay, so since you have a sales note you are legally "foreclosing." Then do you have to pay a mortgage originator to legitemize the loan? Or is it like a car note and you repo it?

Sorry for beating you over the head with these questions. I am just starting to learn my way around owner fincance rules. I know they would vary from state to state, but the general structure is probably similar between TX and FL.

Terry Drake · Answer

@ Brian, I sell my homes with a sales agreement and carry a note.  The note specifies payments, interest, collateral, and terms of note (non payment, ect).  If someone is going to fall behind I try to get them to leave peacefully by having them just sign the title back over to me and they move out.  Then it is a done deal.  I tell them if they leave peacefully and don't trash the place I will forgive all debts and not chase them for money owed.  Otherwise it will have to go through foreclosure/eviction.  If it goes the nasty route then I will file judgments or anything else I can do.

BTW The whole process is about $500 and 30days here in FL.

Leslie A. · Answer

Joe, 
I think you should demand payment and proceed with repossession plans.  Because, if this is habitual, he will not improve.  I'm basing this on recent experience with deadbeats.  
He has to pay for rent or mortgage wherever he lives, and he must learn that home payments are first priority.
I've also restructured a couple of loans (different type) in the recent past and it didn't improve payment promptness at all, in fact, it seemed to get worse.'
Also, you need to enforce your late payment fees strictly.
JMO

James H. · Answer

Terry,

I have not invested in mobiles but have thought about it. I have followed a lot of your threads which have sparked my interest.

If you are selling the home on a note, do you evict a buyer (tenant?) or do you forclose? How is the note structured so that you can evict? This is critical where I live (Texas) because if your contract is like a lease/purchae or rent-to-own, well, these contracts are functionally illegal in my state.

Yet you must have some sort of contract to present the judge in event of eviction. Thanks for any input.

Terry Drake · Answer

Personally I would demand payment and begin the eviction process immediately.  If he's not paying you then it's inevitable that he's going to stop paying lot rent too if he hasn't already.  Next thing you know back lot rent is piling up while he's not paying you, then it could take months to get him out once you begin the eviction process.  By the time you finally get him out of there you've got back lot rent, repairs, current and future lot rent until you sell it so you might as well get the ball rolling now sooner then later.

The exception might be is if you have history with this guy, he has always been a good/early pay and you know it's a temporary hardship but if he's job hopping I think we've got his number already.

Perhaps I'm just a mean ol' Scrooge?

Restructure Note or Demand payment?

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