The performance of any portfolio is largely tied to the types of products involved and the consumers who use those products. When it comes to manufactured homes, there has always been a struggle to see real returns due to the volatility of the products and the consumers involved. However, credit unions across the nation are noticing a change in these trends as manufactured homes have become more practical for people from all walks of life. Here are a few things you should be doing to increase the value of your manufactured home loan portfolio.
Redefining Manufactured Homes
Thanks to today's tiny home movement, the concept of manufactured homes have changed from the once negative connotation of low-budget living to a more inclusive vision. Credit unions who offer loans on manufactured homes need to understand why and how the industry is changing, and that today's manufactured homes are far more durable than those of the past. By identifying trustworthy manufacturers in today's market, your credit union can easily diversify the portfolio away from old style trailers and into today's high-end products.
The best way to take advantage of this rapidly changing market is to launch a deep analysis of the industry. It is best to partner with a lender who knows the ins and outs of the manufactured home industry as it stands today. This includes state of the art manufacturing processes and materials that were not available previously. In order to minLeimize risk, your partner will be able to identify which new manufactured homes are worth the investment, and which ones are a carryover from decades past.
Partnering with the Right Loan Services
There is a lot to learn about manufactured homes today, and the industry is changing daily. Moreover, there are countless companies offering in-house lending and other solutions that are difficult to work into your credit union's portfolio. Fortunately, with a third party lending partner, it is possible to expand your portfolio into this arena. For instance, Triad Financial Services offers low-risk lending options based on our knowledge and experience in manufactured homes. We then pass these loans on to credit unions as investments for their portfolios. We work closely with credit unions to develop a lending strategy that meets their needs, including risk assessment. We work closely to qualify borrowers up to the credit union's standards and try to eliminate any risk of defaulting where we can. Most importantly, we maintain contact with our borrowers so that we can come up with solutions to pay off loans if they do fall into default. This makes it easy for the credit union to make safe investments without fear of loss. We keep a payoff reserve in the case that a borrower is unable to meet their obligations, and can handle all of the administrative processes for repossessing the home.
Unlike credit unions, we have been able to go directly to the source. Manufacturers are happy to have our name on their marketing materials because shoppers are able to apply for lending on the spot when they find a home they like. Meanwhile, credit unions don't have to worry about the administrative steps, and can simply buy the loans after they have been properly closed.
Credit unions have many opportunities to make a big impact on the manufactured home industry today. By opening up your definition of manufactured homes and learning about new developments in the industry, it is easy to see why so many consumers are demanding these products today. The first step is partnering with a lender who is familiar with the industry to create a basic outline of what kinds of loans you want to invest in going forward.