For more than two decades, Kimberly Burnworth has lived in a mobile home in rural West Virginia on a tract her grandfather acquired in the 1960s. A single mother, Burnworth is paid by the government to be a caregiver to her 11-year-old son, David, who has muscular dystrophy.
Between food, medicines and a $61,000 mortgage, money is a constant worry. Increasingly, Burnworth is also worried she will be evicted. She has not made a mortgage payment in nearly two years after losing her job. The lender — 21st Mortgage, a company controlled by Warren Buffett’s Berkshire Hathaway — is trying to foreclose on her home. And the federal moratorium on evictions put in place during the pandemic is ending this month.
In May, a local judge bought Burnworth some time when he temporarily stopped 21st Mortgage from foreclosing and delayed a trial until this fall. She has the money to restart her mortgage payments of $507 a month, she said, but she cannot afford the $14,900 the company also wants for the missed payments.
“I have made mistakes, but they won’t work with me,” said Burnworth, 50, who had a prior bankruptcy filing with her ex-husband.
An estimated 22 million people in the United States live in mobile homes, which have evolved over the decades from travel trailers to structures that can be delivered by a truck. Usually containing one or two bedrooms, and officially known in the industry as manufactured housing, they have long been pitched as affordable homeownership to the working poor, people on fixed incomes and retirees.
But banks will not often lend to mobile homeowners, partly because the loan amounts are too small to be profitable and because the federal government does not typically guarantee those mortgages. Instead, the mobile-home financing market is dominated by five lenders, including 21st Mortgage and Vanderbilt Mortgage — two units of Clayton Homes, a Berkshire Hathaway business.
The pandemic hit owners of mobile homes especially hard. In August, the Urban Institute, an economic and social-policy think tank, reported that 35% of mobile homeowners had worked in industries that lost the most jobs during the pandemic.
But government efforts to protect them have been patchy. Early on, federal housing agencies instructed mortgage firms to defer payments for struggling borrowers, but many mobile homeowners were not covered by those guidelines. The $1.9 trillion American Rescue Plan Act, signed into law in March, included $10 billion for a Homeowners Assistance Fund, which earmarks money for the most vulnerable homeowners facing foreclosure. State officials lobbied the Treasury Department to make sure some of that money goes to residents of mobile homes. Treasury is expected to release new guidance soon on how the money can be spent.
In Washington state, an eviction moratorium now set to end June 30 bars most evictions for “any dwelling or parcel of land occupied as a dwelling dwellings.” Once the eviction ban lifts, new tenant protections passed by the state Legislature will require that landlords offer repayment plans for debt accrued during the pandemic. Those new rules will cover people who rent mobile homes or mobile-home lots, according to the law.
In the meantime, owners of mobile homes have had little choice but to rely on the good graces of the dominant financing firms.
As Burnworth found out, that can be tough. Her unemployment checks were not enough to cover her costs after she lost several short-term jobs, including one with the Census Bureau. She sought a loan modification from 21st Mortgage to reduce her monthly payments, but she said the company was unwilling to offer her one — even after she began getting regular checks in August from the government to care for her son.
In a statement, Clayton Homes, the parent company of 21st Mortgage, said it did not make loan modifications, believing that offering borrowers a short-term credit for a missed payment works better. The company said it had provided Burnworth with credits totaling $3,649 toward her mortgage when she encountered financial problems in previous years and did not demand repayment.
“It’s my responsibility to take care of the house and make the payments, but it’s hard to keep a job when you have a sick child,” Burnworth said. She said she had already shelled out more than $130,000 in principal and interest over the life of the loan, which carries a 9.25% interest rate. Clayton disputed the amount she had paid and noted that it had not owned her loan in the first few years she lived in the home.
While Burnworth owns the land her mobile home sits on, many mobile homeowners rent space from mobile-home-park operators, which are increasingly run by large real estate firms. This arrangement means mobile homeowners can find themselves making payments to both a finance company and a real estate firm — increasing their odds of being evicted if they fall into financial distress.
Already, there are indications that evictions could rise when the moratorium and post-pandemic relief ends. A review of eviction filings in six states by Private Equity Stakeholder Project, a not-for-profit advocacy group, found five large mobile-home-park operators in a list of 150 corporate landlords that have been filing the most eviction actions since the federal moratorium went into effect in September.
Raul Noriega, an attorney with Texas RioGrande Legal Aid who specializes in manufactured-housing cases, said an eviction for not paying rent to a park operator could be tantamount to a mortgage foreclosure because moving a trailer could cost several thousand dollars.
“When you lose, you often lose your house,” Noriega said.
Some 42% of the owners who borrow to buy a mobile home typically do not get a conventional mortgage, which comes with consumer protections that can make a foreclosure difficult. Instead, they buy their trailers with high-interest “chattel loans,” which the courts treat as contracts and can lead to quick repossession court actions.
A recent report by the Consumer Financial Protection Bureau found that chattel loans, which carry an average interest rate of 8.6%, were more often taken out by Black, Hispanic and Native American borrowers who could not afford the $70,000 price of a standard manufactured home.
Clayton said its two subsidiaries had approved payment deferments for 39,000 borrowers during the pandemic and had given nearly $6 million in credits to its customers over the past year to keep their accounts current. Triad Finance, another lender, said it, too, had offered deferred payment to struggling borrowers during the pandemic.
ECN Capital, the parent company of Triad, said in a statement that the lender had approved 3,000 forbearance applications but that only about 500 of its borrowers had ended up taking advantage of them. But there is little industrywide data on forbearance requests granted or mobile-home repossession actions during the pandemic.
Timothy Bruhn, the owner of a mobile home in the Winterset Farms community in Wilmington, Delaware, said he had recently staved off an attempt by the park’s operator to evict him. The operator, a California real estate firm, said he had violated a rule about grilling too close to his house, which Bruhn denied. But he is concerned because the company has decided to appeal the ruling.
Bruhn, 65, was laid off from his job at a demolition company during the pandemic. He said he owned his home but paid $725 a month to rent his space. He said if he were evicted he would have difficulty finding the money to move the trailer.
“I am stressed out,” said Bruhn, who said he believed the operator was singling him out because he is president of the trailer park’s homeowner association. “I am walking on eggshells because I don’t know what they are going to complain about next.”
A lawyer for the mobile-home park said the company did not comment on active litigation.
It is also a stressful time for people who simply rent their trailers in a mobile-home park.
Harwetha Browning, 58, who rents a two-bedroom mobile home with her cousin at the Suburban Woods Mobile Home Park in Union City, Georgia, said she was served with an eviction notice in April. She said she and her cousin had fallen behind on the $924 monthly rent because both had recently had unsteady income and health problems. Browning, who had COVID-19 last summer, was just about to return to work as a house cleaner when she was injured in a car accident, she said.
Browning said her legal-aid lawyer was trying to get her rental assistance to help her make up for the overdue rent. But she also said the park’s owner had made things tough for her by not taking partial rent payments or making needed repairs to the trailer.
“I just want them to treat me fairly,” Browning said.
A lawyer for the park said his client was trying to settle the case.
Seattle Times business reporter Heidi Groover contributed to this report.