Consumer Advocates say Bill Guts Protections for Manufactured-Home Buyers

Consumer Advocates say Bill Guts Protections for Manufactured-Home Buyers
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September 2, 2015

Local consumer advocates say a bill introduced by state Sen. Chad Barefoot (R – Wake, Franklin) would gut existing protections against common abuses by manufactured home dealers.

After passing through the Senate in April, SB 491 is currently sitting in the House Judiciary IV Committee and is expected to come up for a vote sometime in the next few weeks.

Commonly called mobile homes, manufactured homes are mostly assembled in a factory and transported to a specific location. Because manufactured homes are required to have a wheeled chassis permanently attached to the structure it can be transported by the owner to other locations. Modular homes, on the other hand, are also prefabricated homes, but do not have a permanent wheeled chassis.

Known as the Manufactured Home Purchase Agreement Change bill, the Center for Responsible Lending says that the bill eliminates key consumer protections. While the buyer generally seeks outside financing, they often make directly to the dealer multiple payments associated with the cost of purchasing and transporting the home, and developing the site.

Dealers would no longer be required to promptly return all payments made by the buyer if the dealer reneges on, or changes the terms of a signed contract. Dealers would only be required to return the initial down payment. Similarly, if a buyer exercises their three-day right to cancel the contract, the dealer is only required to return the initial payment and not any subsequent installments.

Dealers are no longer required to record all payments made by the buyer and no longer have to include financing terms with the purchase agreement. "Without this," wrote the Center in an action alert, "if the financing falls through, buyers will be stuck in the contract and be more vulnerable to predatory lending tactics or losing their deposit."

The Center for Responsible Lending is urging voters to contact Barefoot and other committee members and tell them to oppose the bill. Barefoot's contact information can be found here. Contact information for committee members can be found here.