Mobile Home Loan Delinquencies Up 200% In 12 Months As Lower Income Americans Struggle To Make Payments

mobile home loanThe mobile home loan delinquencies have doubled in the past twelve months according to UBS.

Manufacturers of mobile homes and manufactured homes are feeling it as the report is causing resale values to plummet.

UBS is reporting the delinquency rate on mobile home loans has increased by 200 basis points over the past year. The Swiss-based bank is claiming the 30-day-plus delinquency level now at around 5%. This is the highest level of mobile home delinquencies since 2005.

The increase in the number of struggling mobile home borrowers suggests these individuals haven’t benefitted from the economic growth of the past few years

The UBS report states:

We interpret this data to mean that these individuals have not largely benefitted from these macro-dynamics, and may also be disproportionately exposed to industries that have experienced compression.

Yet, conventional single-family residential loans haven’t seen a similar uptick. Conventional SFRs continue their steady downward path through the post-recession recovery:

This data represents a piece of a jigsaw puzzle that shows the condition of consumer finances in America. And the picture that’s emerging, according to UBS, is of a two-speed economy, with lower-income consumers and younger borrowers with substantial student debt moving at a slower pace than more affluent and established participants in the economy.

For example:

  • Around three in five consumers with an annual income below $40,000 indicate that their earnings barely cover or do not cover their expenses.
  • Lower-income earners are often renting and carrying non-mortgage debt higher than prior to the financial crisis.
  • More than a third of these borrowers in this demographic report misrepresenting their financials in loan applications.
  • The recent tax reform in the US will likely benefit middle-income borrowers but have limited benefits for lower-income borrowers.

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