I don't underwrite mortgages. But if I did, I'd probably stay the hell away from issuring loans against manufactured homes. The minute that the loan principal is higher than the value of the home, the lender would be at risk of losing money if the owner defaulted on their obligation. Since manufactured homes depreciate like crazy, I imagine that any significantly long-term loan (5+ years) would have a serious window where the loan company could be left in a really bad spot.
But it turns out you can get loans against trailer homes, and can reportedly even get them relatively easily and with (somewhat) reasonable rates. I'm just speculating, but it sounds like a business would have a very challenging time reaping good returns on a model like that. So why do they do it?
It's because the builders own the loan companies. Running a less-than-lucrative business makes a lot of sense when it gives customers easy access to your money-making business.
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