Depositories need to get money on the street and in the ideal situation they will be seeking opportunities that allow for a higher ROI with a lower risk level on the portfolio they build. The chattel finance of purchase money for owner occupied manufactured homes can offer that opportunity, but unfortunately most depositories lack the industry knowledge and historical lending data to do that well. Often the depository will also lack all of the personnel in house they need to handle collections and repossessions in a manner that limits the percentage of repossessions, and maximizes the performance of that collateral.
Smaller retailers of manufactured homes often lack either the capital or the volume necessary to start and operate an independent finance operation to make loans on the homes they sell and place in manufactured housing communities. They have often tried working with local banks in much the same way that car dealers do, but just as often, the results end up unsatisfactory for both the retailers and the depository.
We have the expertise and experience necessary to help both sides set up and operate a joint venture between the depository and the retailer that works and works well for both parties. We will work with either party to help set up a successful relationship from the beginning to the end of the process.
As part of our involvement we will:
- Help either party find the right entity to enter into a joint venture with;
- Provide the basis of the joint venture agreement for review by entity attorneys;
- Provide the documents and forms necessary to the joint venture for review by entity attorneys;
- Create a joint venture loan policy and procedure manual and mathematically modeled credit matrix utilizing over 30 years of historical loan performance to help set desired levels of risk;
- Put together a Compliance Management System for the retailer that meets the third party requirements the depository needs and trains all appropriate retailer personnel in the use of the systems;
- Trains a Compliance Officer in the oversight and audit of the Compliance Management System and in necessary reporting to the depository;
- Assists the retailer in setting up a system to assure maximum collateral performance as part of their joint venture responsibilities.
When done correctly, the ROIs are normally the highest of any installment loan portfolio in the institution and normally present the lower risk installment loan portfolio the institution has. The retailer normally sees a substantial increase in home sales and in site placement, often in communities owned or managed by the retailer. E-mail