As many people that have purchased a mobile home have discovered, it can be almost impossible to refinance a mobile home in Michigan. The reasons are varied, but are usually a combination of the home losing value too quickly and lenders not being willing to offer refinancing loans.
There is a little known solution to mobile or manufactured home refinancing, it’s called a “cram down” in a Chapter 13 bankruptcy case! Who knew bankruptcy could help you pay off your home? This is how it works.
Under 11 U.S.C. § 506, most mobile or manufactured homes are purchased with a title, which should look much like a regular car title. This means that under the bankruptcy code, this home is considered a “vehicle” with a title.
This can include manufactured homes, mobile homes, trailers, double-wide homes, etc. The principle of a cram down is that if you purchased that house over 2.5 years ago and that vehicle is now worth less than what you owe on it, you can actually “cram down” the amount you owe on the home to what the home is actually worth! Wow! This can save mobile home owners thousands of dollars and help them pay off their mortgages to own their homes outright in very little time.
Not only can you cram down a mobile home mortgage, you can often lower the interest rate on that loan as well through a Chapter 13 bankruptcy cram down. Speak with an attorney today to find out if this is an option for you! 269-381-4471