1151.294 Investment in mobile home chattel paper.

(A) As used in this section:

(1) "Mobile home" means a movable dwelling for occupancy on land made of one or more units, and having minimum width of ten feet, minimum area of four hundred square feet, and year-round living facilities for one family, including permanent provision for cooking, eating, sleeping, and sanitation.

(2) "Mobile home chattel paper" means a document evidencing a loan or interest in a loan secured by a lien on one or more mobile homes and equipment installed or to be installed therein.

(3) "Manufacturer's invoice price" means 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) An association may invest up to twenty per cent of its assets in mobile home chattel paper and interests therein.

(C) Appraisals or other generally accepted systems of valuation of used mobile homes shall support loans made under this section. 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 add such payments to the debt evidenced by the chattel paper. The association shall seasonably perfect its security interest.

(D) An association may invest in mobile home chattel paper which finances a mobile home dealer's acquisition of inventory, if all of the following criteria are met:

(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;

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

(a) For new mobile homes, one hundred per cent of manufacturer's invoice price for each mobile home and equipment to be installed by the dealer;

(b) For used mobile homes, seventy-five per cent of appraised market value or other generally accepted valuation of each mobile home, including installed equipment.

(E) An association may engage in the following types of retail financing:

(1) An association may invest in retail mobile home chattel paper that is guaranteed under the Servicemen's Readjustment Act of 1944, or 38 U.S.C. 1802 as amended, or insured under the National Housing Act or the Servicemen's Readjustment Act of 1944, or 38 U.S.C. 1802 , or that has a commitment for such insurance or guarantee.

(2) An association may invest in conventional retail mobile home chattel paper if:

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

(b) The mobile home is located at a mobile home park or other permanent or semipermanent site;

(c) The loan is payable within twenty years, in monthly installments equal or unequal, in amount sufficient to retire the debt, interest, and principal within the contract term. Such contract term may include periods of negative amortization.

(d) The loan amount, excluding time-price differential or interest, however computed, does not exceed ninety per cent of buyer's total costs, including freight, itemized set-up charges, sales or other taxes, filing or recording fees imposed by law, and insurance premiums. Insurance premiums may be financed for customary physical damage insurance and vendor's single interest coverage on the mobile home for an initial policy term not to exceed three years and the cost thereof may be included as part of the buyer's total cost.

(F) With regard to purchase of an interest in retail mobile home chattel paper where the security property is or will be located more than one hundred miles from this state, the seller of the interest shall be an institution whose accounts or deposits are insured by a federal agency or a service corporation thereof and the seller, unless the seller is the association's service corporation, shall retain at least a twenty-five per cent interest in each document evidencing a loan secured by the chattel paper.

(G) All mobile home chattel paper sold by an association shall be sold without recourse.

Effective Date: 12-09-1982