N.M. Admin. Code § 12.20.35.17

Current through Register Vol. 35, No. 23, December 10, 2024

Section 12.20.35.17 - MANUFACTURED HOME FINANCING

A. Definitions used in this section:

(1) "Manufactured home" shall have the same definition as that contained the National Manufactured Home Construction and Safety Standards Act, 42 U.S.C. 5402(6).

(2) "Manufactured home chattel paper" - a document evidencing an installment sales contract or a loan or interest in a loan secured by a lien on one or more manufactured homes and equipment installed or to be installed therein.

(3) "Manufacturer's invoice price" - a manufacturer's itemized charges, shown on its invoice, for a specifically identified mobile home, furnishings, equipment, and accessories installed by the manufacturer, and freight.

B. General investment authority: An association may invest in manufactured home chattel paper and interests therein without limitation as to percentage of assets.

C. Sound investment practices: Appraisals or other generally accepted systems of valuation of used manufactured homes shall substantiate the term to maturity of loans made. Chattel paper shall have provisions to protect the association, specifically regarding insurance, taxes, other governmental levies, and maintenance and repairs, and may include any other protection provision which is lawful and appropriate. The association may pay taxes or other governmental levies, and insurance premiums or other similar charges to protect its security interest, and may when lawful, add such payments to the debt evidenced by the chattel paper. The association. shall seasonably perfect its security interest. The association is responsible for current knowledge of regulations and requirements pertaining to federal insurance and guarantee programs for manufactured home loans in which it invests, including portfolio limitations on coverage, and is expected to make underwriting decisions as carefully for such loans as for conventional loans.

D. Inventory financing: An associaton may invest in manufactured home chattel paper which finances a manufactured home dealer's acquisition of inventory if:

(1) the inventory is held for sale by the dealer in its ordinary course of business;

(2) the loan evidenced by the chattel paper is the dealer's obligation; and

(3) the loan amount does not exceed the following:

(a) for new manufactured homes, 100 percent of manufacturer's invoice price for each manufactured home and equipment to be installed by the dealer;

(b) for used manufactured homes, 75 percent of appraised market value or other generally accepted valuation of each manufactured home, including installed equipment.

E. Retail financing:

(1) Insured and guaranteed loans: An association may invest in retail manufactured home chattel paper that is insured or guaranteed, as defined in Section 541.10 or 541.13 of the regulations for the federal savings and loan system, or that has a connitment for such insurance or guarantee.

(2) Conventional loans: An association may invest in conventional retail manufactured home chattel paper if:

(a) the manufactured home is to be maintained as a residence of the owner (or beneficial owner), or an owner's relative;

(b) the manufactured home is or will be located at a manufactured home park or other permanent or semi-permanent site;

(c) the manufactured home chattel paper is payable within 20 years, in monthly payments which are substantially equal except to the extent that the financing complies with mortgage provisions authorized under Section III.(a) [now Subsection A of 12.20.35.10 NMAC] of this regulation, and

(d) The financed amount (excluding time-price differential or interest, however computed) does not exceed (i) 90 percent of buyer's total costs, including freight, itemized set-up charges, sales or other taxes, filing and recording fees imposed by law and premiums for related insurance, or (ii) 90 percent of the appraised market value or other generally accepted valuation of the manufactured home in the case of a used manufactured home plus sales and other taxes, filing and recording fees imposed by law, premiums for related insurance and freight and itemized set-up charges, if any.

(3) Combination loans: An association may invest in manufactured home chattel paper secured by combinations of manufactured homes and lots on the following terms:

(a) Affixed manufactured homes: If the wheels and axles have been removed and the manufactured home is permanently affixed to a foundation, a loan secured by a combination of manufactured home and lot on which it sits may be treated as a residential real estate loan under Section III [now 12.20.35.10 NMAC] of this regulation.

(b) Unaffixed manufactured homes: If the manufactured home is not affixed in the manner described in subparagraph (e)(3)(i) of this section [now subparagraph (a) of Paragraph (3) of Subsection E of 12.20.35.17 NMAC], an association may make a loan secured by a combination of manufactured home and lot on which it is or is to be located if the financing complies with the requirements of subparagraphs (e) (2) (i), (ii) and (iii) [now subparagraphs (a), (b) and (c) of Paragraph (2) of Subsection E of 12.20.35.17 NMAC] and the loan-to-value ratio does not exceed 75% of the appraised value of the lot and lot improvements and 90% of the buyer's total costs of the manufactured home (or valuation of used manufactured home) as defined in subparagraph (e)(2)(iv) [now Subparagraph (d) of Paragraph (2) of Subsection E of 12.20.35.17 NMAC].

(c) Insured and guaranteed loans: Notwithstanding the other provisions of this subparagraph, an association may invest in a combination manufactured home and lot chattel paper that is insured or guaranteed as defined in Sections 541.10 and 541.13 of the regulations for the federal savings an loan system, or that has a commitment for such insurance or guarantee.

(4) Purchase of retail paper. With regard to purchase of an interest in retail manufactured home chattel paper where the security property is or will be located outside the association's normal lending territory (as defined in Section 561.22) of the insurance regulations, the seller of the interest (unless the seller is the association's service corporation) shall retain at least a 25 percent interest in each document evidencing a loan secured by the chattel paper.

F. Sale of paper:

(1) All manufactured home chattel paper sold by an association shall be sold without recourse, as defined in Section 561.8 of the insurance regulations.

(2) No association may sell manufactured home chattel paper, if at the close of its most recent semiannual period, it has manufactured-home-chattel-paper scheduled item (other than assets acquired in a supervisory merger) in excess of 5 percent of its total portfolio in such paper; provided, that application may be made to the supervisor for a waiver of this restriction.

N.M. Admin. Code § 12.20.35.17

Recompiled 10/31/03