“I’m looking at my Buyer/Borrower Statement. What the heck are all these fees?”
Understanding the Fees
Pre-1976 – Mobile Homes
Let’s assume that you’ve got all your negotiations completed. You’re approved for your space rent in the Park where you’ll be living and you’re ready to pay for your new home and sign your paperwork to transfer the title. You’ll be getting an estimated statement of your transfer costs from the title company that will be similar to the one above. This example shows a mobile home. The definition of a mobile home is a home built before June 15, 1976. These homes are registered through the Department of Motor Vehicles much like the car you drive. You will receive a registration renewal in the mail yearly.
Let’s go line by line with our explanations.
TOTAL CONSIDERATION – This is the total price you’re paying for your home.
Initial Deposit – This is the dollar amount that you paid to open the escrow also known as an Earnest Money Deposit.
Registration – You will pay a prorated amount for the registration per day from the date of closing until the registration due date. Depending on the amount of time left until the registration is due you will likely pay for the following year as well. Ex: $74.00 per year from 5/7/14 – 7/31/15 = $91.29.
Rents – You will pay a prorated amount for the current rent from the day you close escrow until the end of the current month. Ex: $985.30 per month 5/7/14 – 6/1/14 = $788.24.
Escrow Fee – This is the fee the escrow company charges to facilitate the transfer of ownership.
HCD Document Preparation Fee – This is the fee that the Department of Housing and Community Development charges the prepare the transfer documents.
Archival Fee – This fee ensures that the escrow company will archive your documents should you need to reference them later.
Bank Wire – This is a fee for the wiring of the funds from the lender or from a personal account into the bank account of the seller.
Overnight Mail Fee – This fee is required for funds to be transferred to the agents who were parties in the transaction to receive their commissions.
Loan Tie-In Fee – This fee is to bring the funds from your lender into the escrow to pay the seller.
New Security Agreement – This is a credit amount showing the total amount your borrowing for your home.
Lender Fee – This is the amount the lender is charging to facilitate the loan.
Origination/Tax/Flood – This is a fee the lender charges for originating the loan and for certain disclosures to satisfy the insurance requirements.
Mobile Home Recovery Fund Fee – The Department of Housing and Community Development (HCD) requires this fee on all transfers. It is a fund that is there to satisfy judgements for buyers or sellers who have lost money as the result of failure to honor warranties or guarantees, fraud, willful misrepresentation, or conversion; willful violations. For a detailed explanation go to: FACT SHEET
Park Purchase Fee – This is a fee that HCD charges when transferring title on a home that is in a leased land mobile home park.
Registration Service Fee – This is a fee that HCD charges to add, delete, or change the lien holder.
Transfer Fee – HCD fee to transfer the title to the new owner.
Use Tax – Use tax and sales tax are basically identical. They are collected at the same tax rate. This rate is dependent upon the county and city location of the manufactured home, mobilehome or commercial modular. If you buy a used manufactured home or mobilehome subject to annual registration, use tax will be calculated upon the retail value, determined by either the Kelley Blue Book, National Automobile Dealers Association Manufactured Housing Appraisal Guide (N.A.D.A.) or the Purchase Price (actual sale price) which ever is less. Use tax is due at the time of transfer.
Title Release – Fee charges by HCD to release the ownership form the previous to the current owner.
Legal Owner – A Legal Owner can be a Bank, Business, Lending Institution, Mortgage Company, Private Party, etc., with whom you have secured a loan and have used your Manufactured Home, Mobilehome, Commercial Modular, Floating Home or Truck Camper as collateral. The Lender will be recorded as Legal Owner and will be issued the Certificate of Title (ownership document) to be retained until the loan has been paid in full.
Here is a full SCHEDULE OF FEES for the Department of Housing and Community Development for transferring ownership.
Notary/Notary Public – There will be signatures that must be notarized by a licensed signing agent when signing your closing papers at the title company. The fee will depend on how many signatures require notarization. Typically the fee is $10.00 per signature. A notary will travel to your location to notarize your documents for an additional travel fee.
Insurance Premium – The first years insurance on your mobile home is oftentimes paid through the escrow for the first years insurance. Insurance premiums can be paid outside of the escrow if that is your preference.
First Months Rent – The Park will be paid for your firsts months space rent through the escrow. Deposits or additional rents collected through the escrow will be determined by the Park you will be living in.
Security Deposit – Some Parks require a security deposit that will be returned to you at some time in the future according to their procedures.
Title Search – HCD conducts a title search to ensure that the transfer of ownership will be free of any and all encumbrances.
Difference Between Old and New Rent – You will be charged per day for the difference of the current rent rate and the previous owners rent rate.
Once all the charges have been calculated you will have the total amount needed to bring to your closing. The example I have shared with you is for a purchase of a ‘MobileHome’, meaning a home built on or before 1976. There are a few differences for a Manufactured Home by definition. The fees collected by HCD are pretty much the same.
I hope this article helps you to decipher your closing statement. I’d love to hear you questions or feedback!