Michigan Manufactured Home Title and Affixture
With the rising cost of traditional site-built housing, manufactured homes are often a more affordable path to homeownership. In Michigan, manufactured homes are treated as personal property rather than real property.
As such, they are titled just like a vehicle with ownership records maintained by the Secretary of State. The vehicle title can subsequently be retired via affixture, allowing the ownership of the property to run with the land. Therefore, it is vital for lenders and their agents to understand how mobile homes are identified, titled, and legally affixed.
Upon manufacture and final inspection, the Secretary of Housing and Urban Development (HUD) gives each unit of a manufactured or mobile home a certification label. This certification label contains a unique label number known as a HUD tag number, which is stamped onto a metal plate and attached to the outside of the home. Each HUD tag number consists of three letters followed by six numbers—with multiwide homes receiving multiple HUD tag numbers.
Each home is also assigned a serial number. In Michigan, the serial number is often the same as the Vehicle Identification Number (VIN); however, this is not always the case.
When a mobile or manufactured home is purchased, the purchaser must apply for a Certificate of Manufactured Home Title. This title certificate will name the purchaser as the owner of the mobile home and list other important information, including the manufacture year, make, and model of the mobile home, the serial number and/or VIN, and the name of any secured lienholders on the home. This certificate is the proof of ownership and what must be transferred in any subsequent sales of the home unless the home is legally affixed.
The best time to complete a transfer and affix the mobile home is at loan origination, since all relevant parties are “at the table.” Nonetheless, it’s often the case that this issue only arises in preparation for foreclosure or sale at REO. If a mobile home is found to be unaffixed, the process for applying for title in the lender’s name and legally affixing the mobile home can commence once foreclosure is completed and redemption has expired.
In the past, lender’s agents were able to apply for a certificate of manufactured home title by providing the Secretary of State the Sheriff’s deed showing that the lender has legal ownership and possession of the property after a foreclosure.
However, the Secretary of State has recently updated their guidelines and advised that they will no longer accept a Sheriff’s Deed as proof of ownership.
There are three methods for the lender or purchaser to obtain ownership after foreclosure. The first method would be to obtain a transfer of the certificate of title. The lender will need to obtain an original certificate of title, either from the prior owner directly or by obtaining a duplicate from the State and have the prior owner sign ownership over to the lender. This method works best when the lender is working with a cooperative borrower or estate, such as during the process of a deed-in-lieu of foreclosure.
The second method is via Affidavit of Missing Mobile Home Title. In 2022, the Michigan legislature enacted MCL 125.2330K in an effort to aid those owners who either lost or never received the certificate of title to a mobile home. The Michigan Secretary of State will issue a certificate of title upon receipt of an Affidavit of Missing Mobile Home Title. This affidavit must contain all relevant owner and mobile home information, a statement that the mobile home is attached to a foundation with the wheels and towing hitches removed, that no further payments are being made to any secured party, and that the mobile home has been affixed to the property for at least 15 years. The State requires evidence of either the date of physical affixture to the property or the date the mobile home was added to the tax roll for the parcel. Because county treasurers are often unable to provide this evidence, this workaround method is not always available.
The final method is to pursue a court order declaring that the lender is the rightful owner of the mobile home and order that the Secretary of State must issue title in the lender’s name. This method will require additional time and be more costly but may be necessary in cases where the prior owner is unavailable or uncooperative, where there is an unreleased third-party secured lien on the title, or where there are any other outstanding title issues.
In lieu of affixing, the lender always has the option of selling the land at REO on an “as-is” basis, with the understanding that the new purchaser will have to address the mobile home affixture issues themselves. Many underwriters will take exception to these issues in their title policies, which may mean that a purchaser struggles to obtain traditional financing.
However, selling as-is may still be a good option for certain low value properties where the lender does not want to take on the cost of litigation.
Unfortunately, the affixture process may sometimes be an arduous task. But if all parties from the lenders down to the REO agents have a baseline understanding of what manufactured home title entails, what information is needed, and how affixture can be attained, this will help to achieve the best outcomes and timelines for all involved.
