21st Mortgage Cash Program - Policy Change

I received a very interesting email from 21st on Friday saying that they would not floor the amount of my homes on order, due to significant pricing increases over the last 24 months:

“After reviewing the price increases on your homes with upper management, we do not feel comfortable with flooring the full invoice amount at roughly $74k for each home. As a result, we would only be able to floor the amount that was initially approved for each home, which was $45k. This would mean we would require a down payment equal to the difference of the current invoice amount and the original approval amount in order to put them on CASH inventory.

For instance, we would need a down payment in the amount of $25k in order to floor serial # xxxx as the new price is $71k and the approval was for $46k.”

Keep in mind, as my 21st representative was typing the above email, my home was being delivered to my park. Had they notified me 24 hours before, I would have canceled my order, just as I have canceled my 4 orders after this one.

Now, they are expecting me to pay them $25k, along with their margin on the $46k, and they wont finance the full home value of $71k + margin + setup costs, etc.

I am told this is happening across the CASH program.
Anyone else experiencing similar BS?

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I own two smaller parks (less than 50 pads) and recently said my account was suspended. They’ve had policy changes and will only work with parks > 50 pads and who charge at least a certain lot rent per month (I believe it was $350).

21st isn’t an option for smaller parks for at least the foreseeable future.

Is this for any particular reason?

I read this as their way of telling you that they think you are going to lose money on the homes you have purchased and they don’t want to participate alongside you in that loss.

They see an economic slowdown coming and they see housing prices falling.

It seems odd that the manufacturer could sell you something for $46k and then raise the price to $71k.

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They did the same thing to me. Agree that They see an economic slowdown coming and they see housing prices falling and don’t want to have a loss. I was going to buy my homes anyways but Fleetwood increased the price as the home was coming off the line… "your home is coming but oh, one more thing you have to sign off on another increase’. Cancelled order. 21st has also, without notice, added a 8 points fee to the community for sales under $22k since they can only charge the buyers 8 pts and want more money, without notice and for deals under contract. Very bad business practices. 21st must be scared as it looks like they only want very high end buyers and homes.

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Thank you for posting this. I was not aware. I am actually going to be calling them about a cashout refi on a 5-unit MF, composed in part of MHs. After reading your column, I feel they will have issue with my plan. I will still make an attempt.

The home orders were placed in December 2020. The invoice price for the home at that time was $46k.

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I suspect it is something like this:

  1. They want to punish the manufacturers who are excessively raising prices, blaming supply chain and other inflationary inputs.
  2. They are nervous about holding notes these inflated assets.

Probably other things too.

I spoke with my Cash Program rep this week and he explained that they are basing these decisions off of your location’s economics. For example, if the average single family home in your area costs $250k, you are probably not going to be greatly affected by mobile home costs being increase from $40k to $65k. However, if the average single family home in your area costs $80k, then 21st Mortgage may be less comfortable underwriting your loans.

If single family homes are appreciating at the same rate as mobile homes, I feel like it should all “come out in the wash.” But, I’m just repeating what I heard from the rep.

Best!
Jon

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So are they doing loans for smaller parks?