Illinois-based Oxford Bank & Trust Helps Community Owners Help Residents
Few lenders specialize in serving the manufactured housing marketplace. Those who do often can do more to build adequate partnerships in the industry.
There’s merit to a long-term strategy, according to Eric Oaks, assistant vice president of Oxford Bank & Trust.
Oaks gives an example: If a community lacks the capital to buy a newly vacated home on one of its lots, many lenders wholesale the home. The community is left with a vacant manufactured home site that isn’t producing lot rent. Instead, a long-term approach can create occupancy that generates consistent community profits. Portions of that revenue could go to the bank, as well.
Oxford Bank Looks to Expand Partnerships
Oxford Bank & Trust has learned to avoid those missed opportunities by developing relationships within the industry. Based in Oak Brook, Ill., the bank serves about 250 manufactured housing communities in six midwestern states. It’s considering expanding into other states, and continues to seek more community partners, Oaks said.
“Manufactured housing is the core of our business,” he said. “We love the opportunity our bank has to lend to low- to moderate-income folks and help them meet their dreams.”
The cornerstone of Oxford’s efforts is its Community Partnership program. It is both a formal agreement and a general guide for how the community will treat the bank. And how the bank will treat the community.
“Both entities are protected,” he said. “We agree not to pull homes from community owners that have a partnership with our bank. And the community owner doesn’t have to fill an empty lot with new product.”
Community Gets First Chance to Re-sell Homes
When Oxford Bank & Trust repossesses a manufactured home, it makes whatever repairs are necessary to put it back into retail condition. Once the home is ready, the community lists and handles the home’s sale details. Both parties agree on a fair price — a price that allows the community to sell the home but doesn’t “beat up” the bank.
The bank pays the community a 10 percent commission for handling the sale. No lot rent is charged by the community while the house is being repaired and sold. However, all homebuyers must be approved by the community prior to the completion of the sale.
One of Oxford’s community partners is Roselake Estates in Pendleton, Ind. Manager Adriane DeRose said her community doesn’t charge the bank lot rent for its vacant homes. Rather, it works with it to get the homes re-sold in as smooth a manner as possible.
“We’re committed to working with them to keep those homes in our community, and we appreciate that that is their policy,” DeRose said.
She said the community partnership concept is rare in the industry.
“A lot of lenders will pull the homes out without discussing it with the community owner first,” she said. “We prefer homes stay in the community, rather than have to fill the lot again.”
Partnership Results in Speedy Re-sale
With Oxford’s aid, community partners typically sell repos within 90 days, Oaks said.
“If I have a repo in a community, it’s not necessarily a negative because the owner will help get it sold,” he said. “We get some losses sometimes, but in totality the program succeeds because of the vast number of loans.”
Gary Fath, manager of New Durham Estates in Westville, Ind., said Oxford Bank & Trust works to get empty homes filled right away, ensuring the community access to lot rent payments as quickly as possible.
“They’re the easiest to work with,” Fath said. “They also work well with the people getting loans.”
Oaks said the Community Partnership program is designed to benefit all parties. The community owner gains a viable new resident. The bank gains a new client to lend to, most likely. Also, that client avoids paying thousands of dollars in home-moving costs.
A home buyer can get a reduced interest rate on the home loan. Also, the bank uses more than credit score to define customer terms. Rather, Oxford’s rates are determined by the buyer’s overall financial history and the age and size of the home.
“We have truly enjoyed working with Oxford Bank over the years,” said Kenny Lipschutz, CEO of HomeFirst, which owns manufactured housing communities in Michigan. “Their personalized customer service and focus on digging into everything they can to help get our potential residents approved and financed has been tremendous.”