Problem converting KS home to real property

kwmacMarch 31, 2013

We recently had the sale of our MH in Kansas fall through because the lender refused to sign off to convert the mobile home to real property. The buyer's lender required it to be real property. Short of an F4 tornado, that home isn't going anywhere. As required by law it is on a permanent foundation with steel straps and has been since it was purchased as the lender is well aware. It met all of the state of KS requirements for the elimination of title.

Sales in the area are very depressed and it is tempting to leave the lender holding the home. Do we have any legal recourse? Assuming we can even find another buyer is there any way to prevent the lender from sabotaging another sale?

PS We do have good credit and enough equity to refinance if we can find a lender willing to refinance a MH.

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cathyyg

The question I have is why the lender would not sign off on the conversion. Is the land owned outright, or is there another security interest on the land? I can see where a lender would balk at that.

If I were the MH lender I would only sign off on the conversion if my security interest in the MH was transferred to the land, since in Kansas once the conversion is done the MH becomes "incident" to the land.

If I held the loan on the land I wouldn't sign off on the conversion at all unless the value of the MH plus the land exceeded the amount owed to me plus the amount the MH lender was owed.

    Bookmark   March 31, 2013 at 4:58PM
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