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House passes bill to preserve lenders' security interests when manufactured homes convert to real property
Summary
Senate Bill 119 passed the House 168'0. The bill clarifies the process for preserving lender liens when a manufactured home is converted from personal property to real property, aiming to improve lender certainty and support workforce housing lending.
The House approved Senate Bill 119, a measure designed to clarify how a security interest on a manufactured home is preserved if the home is later converted to real property. Representative Leverett presented the bill and said it matches House-passed legislation earlier in the session and had passed this chamber previously. The measure aims to simplify lending and encourage financing activity in the manufactured-housing sector by ensuring lender security interests remain effective after surrendering the certificate of title and converting the home to real property.
On the floor Leverett explained the conversion process: a manufactured home typically carries a certificate of title while mobile; when sited on land the owner may surrender the title and obtain a certificate of permanent location, which converts the home to real property. SB119 ensures the lender's security interest is preserved through that conversion. Members questioned details about conversion process and foreclosure consequences; the presenter explained a lender can foreclose on the home without taking the land, and surrendering title is the mechanism to treat the home as part of the real estate.
The clerk recorded a vote of 168 yeas and 0 nays and the bill passed by the required majority.
