Committee hears lenders and attorneys on H.757, a bill to clarify title and financing for manufactured homes
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Summary
Witnesses told the House Committee on General & Housing that H.757 preserves lenders' flexibility to treat manufactured homes as real estate or personal property; attorneys urged clearer recording rules, raised concerns about conversion/purge processes and asked clerks and agencies be consulted before changes are finalized.
The House Committee on General & Housing took testimony on H.757, a bill addressing title instruments and financing for manufactured homes and limited‑equity cooperatives. Witnesses included Chris D'Elia, president of the Vermont Bankers Association, and attorney Laura Gorski, who described operational and consumer implications of the bill and of current recording practices.
Chris D'Elia said lenders operate under three business models — hold‑in‑portfolio lending, loans sold to the secondary market, and personal‑property lending — and that the bill as drafted "preserves the ability to finance as personal property," which he said is vital because lenders need flexibility depending on whether a home sits on owned land, leased land in a park, or cooperative ownership.
D'Elia testified the marketplace includes institutions that finance manufactured homes either as real estate (when on owned land or cooperatives) or as personal property (when sited on leased land), and he urged the committee not to remove options that allow lenders to serve different borrower needs.
Attorney Laura Gorski, who works on mobile‑home closings across Vermont, told the committee she supports the bill's goal but said the statute needs clearer, practical language. She explained that mobile‑home transactions can show title via a mobile‑home bill of sale or a warranty deed and that lien perfection for personal‑property loans occurs with a UCC‑1 filing maintained by the Secretary of State. "There is a lot of confusion" in practice, she said, because towns vary in how they index bills of sale, and some municipalities place those documents in local land records while others keep separate binders or vaults.
Gorski urged the committee to avoid a statutory 'purge' or conversion process that would require town clerks to remove older bills of sale from local indexes: "A town clerk's job is to keep records," she said, and clerks are not set up to purge previously recorded documents. She suggested that rather than imposing a one‑size‑fits‑all statutory rule, the committee convene the clerks, VLCT or the state housing authority to standardize recording practice. Gorski also raised concerns about mandatory conversion to warranty deed because it could restrict future owners from using personal‑property financing options.
Committee members and the chair discussed a recently developed amendment (as of the weekend) that would permit either a bill of sale or a deed for real‑estate loans and said that flexibility could be necessary for lenders that plan to sell loans in the secondary market. D'Elia said he was "happy to look at the language" and that the amendment sounded workable.
On consumer protection and underwriting, D'Elia said banks must perform ability‑to‑repay analyses on real‑estate loans and that lenders underwriting personal‑property loans also assess borrower circumstances; he did not have default rate comparisons available during testimony. Gorski said she has seen competitive personal‑property loan products with rates around 5.99% fixed for 20 years and noted down‑payment assistance programs are sometimes used with such loans.
The committee paused for a break and planned a markup session after reconvening. No formal vote on H.757 occurred during this testimony session.
