Legislature(2009 - 2010)BELTZ 105 (TSBldg)
03/15/2010 01:30 PM Senate JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| SB244 | |
| SB153 | |
| SB284 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 244 | TELECONFERENCED | |
| += | SB 284 | TELECONFERENCED | |
| + | SB 153 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 153-MOBILE HOMES AS REAL PROPERTY
1:38:55 PM
CHAIR FRENCH announced the consideration of SB 153. Speaking as
the sponsor, he related that the intent is to give homeowners
who have mobile homes that are located on real property the
ability to convert their homes to real property. Currently
mobile homes are titled through the Division of Motor Vehicles
(DMV) like a motor vehicle. This change would give the homeowner
access to traditional home financing, which often has lower
interest rates. Converting the mobile home to real property
would increase the value of the home and help to prevent
"clouded" titles that often hinder clean transactions involving
manufactured homes.
KATE HERRING, Staff to Senator French, offered to answer
questions about SB 153.
SENATOR COGHILL asked for an explanation of the mechanism for
combining a motor home title that's with DMV and a title
guarantee that is tied to the property.
MS. HERRING deferred to Mr. Ginsberg.
1:41:56 PM
GEORGE S. GINSBERG, Attorney, McGlinchey Stafford, said his firm
is outside council to Wells Fargo. Providing some background he
explained that a manufactured home, like a car, is documented
for ownership by a certificate of title. That ownership is
transferred by a certificate of title, again like a car. Also
like a car, financing of a manufactured home is secured by a
lien, which is physically noted on the certificate of title.
Unlike a car, a manufactured home can be permanently affixed to
real property. In Alaska that creates problems.
Currently, Alaska law says that the only way for a lender to
perfect a security interest in a manufactured home that's been
affixed to real property is both to note the lien on the
certificate of title and to file a fixture filing under the
Alaska Uniform Commercial Code (AUCC). The problem is that the
Alaska DMV will not issue a certificate of title to a
manufactured home that has been permanently affixed to real
estate claiming that it is no longer a vehicle. This places a
homeowner who has a manufactured home that is permanently
affixed to real estate in no man's land. They cannot sell the
manufactured home because there is no way to document the change
of ownership and they can't finance it because there is no way
to perfect a security interest in the public record.
MR. GINSBERG explained that SB 153 is designed to establish a
conversion procedure by which a manufactured home would be
considered real estate for all legal purposes. This would
involve a surrender and cancelation of the certificate of title
after which an affidavit of affixation would be recorded on the
real estate records. After the affidavit is recorded, a copy
would be sent to DMV and any existing certificate of title would
be canceled. If there isn't a certificate of title or it can't
be found, there is a conversion procedure to accomplish the same
purpose. After this happens the manufactured home is part of the
real estate; it can be sold by a deed and can be financed by a
real estate mortgage.
The bill likewise has a procedure to follow in the event that a
home is physically detached from the land. The homeowner would
file an affidavit of severance and then apply for a title from
DMV. It would then be treated as personal property just as it
had been before the conversion.
SENATOR EGAN asked if this would affect modular homes.
MR. GINSBERG said no.
1:51:38 PM
SENATOR WIELECHOWSKI asked if there is a downside to doing this
with respect to increasing property taxes.
MR. GINSBERG replied he believes the answer would be yes because
it would increase the value of the real estate and presumably
the real property tax, but that's not necessarily a downside.
SENATOR WIELECHOWSKI said if this will increase property taxes
for many of the people in his district he would have a problem
with that.
MR. GINSBERG reminded him that this bill will help the many
people who may not pay real estate taxes, but they can't sell or
finance their homes. So far we haven't run into opposition from
consumer groups in Alaska or other states because it's to their
advantage to do this, he said.
1:54:17 PM
CHAIR FRENCH informed the members that this will not apply to
mobile homes and trailers that are located in a trailer park on
rented space. This applies to people who have put a mobile home
on a piece of property he or she owns and now wants to affix it
to a permanent foundation. The only exception would be to
property on which there is a 20 year lease because that term is
sufficiently long to qualify for the conversion to real
property.
MR. GINSBERG concurred.
MS. HERRING added that this is voluntary process, it is not
mandatory.
1:55:47 PM
CARL SPRINGER, Registrar, Division of Motor Vehicles (DMV),
Department of Administration, said DMV does not oppose SB 153,
but it has concerns about the requirements it imposes on DMV.
DMV has expertise in the area of driver licensing and titling
and registering motor vehicles. It has no experience in real
property law. Currently DMV is required to title a manufactured
mobile home if the owner so requests, but the owner is not
required to title a manufactured mobile home.
Currently there are 8,291 manufactured mobile homes that are
titled in this state. He surmised that a healthy percentage have
had the wheels removed and been placed on a semi-permanent
foundation with skirting. This would possibly qualify the
manufactured mobile home as real property, but he imagines that
many are located in trailer parks.
MR. SPRINGER said SB 153 would have DMV duplicating the efforts
of the recorder's office and real estate title insurance
agencies. Currently DMV records the primary lien or encumbrance
that the owner discloses and this bill would make DMV
responsible for determining the existence or non existence of
other liens or encumbrances. Essentially it would be performing
real property title searches. He said that the attachment
severance requirements are of little consequence if the owner
can execute these affidavits even if they only intend to
permanently affix or sever the manufactured mobile home from
real property rather than actually doing it when the event
occurs. He said that for these reasons DMV feels that SB 153
needs further clarification. He offered to work with the sponsor
to address these concerns.
CHAIR FRENCH asked him to let his office know with as much
specificity as possible, which sections DMV seeks to amend.
1:58:28 PM
BRENDA MIERNYK, Branch Manager, Wells Fargo Home Mortgage, said
she is testifying in support of SB 153. She related that Alaska
statutes do not meet eligibility requirements for lenders to
sell a mortgage loan for a manufactured home to Fanny Mae or
Freddy Mac, including the process to legally classify the home
as real property and placing the lender in first lien position.
Wells Fargo has had to turn away business because of this, she
said. If SB 153 were to pass, state definitions of manufactured
homes would be aligned with HUD definitions to create a system
for title transfer and property conversion. Additionally, it
would create a means for titling manufactured homes that have
been affixed to property but the title cannot be found.
MS. MIERNYK said stated that this bill would 1) help home owners
whose manufactured home is already affixed to real property gain
better access to credit and make it easier to sell their homes;
2) help increase manufactured home values by allowing the owners
to convert them to real property including those not covered by
certificates of title or for which a certificate of title cannot
be found; 3) help lenders gain a perfected security interest in
manufactured homes; 4) help DMV by establishing a formal
procedure for cancelling a title when a manufactured home is
affixed to a permanent foundation; and 5) increase property tax
revenue as a result of manufactured homes being converted to and
considered real property.
2:00:59 PM
GEORGE CARNAHAN, representing himself, Nikiski, said he lives in
a home that falls under AS 29.45.070. It is not hooked up to
electricity, sewer or other utilities and it is not attached to
the ground. Current law dictates that if a property has any of
these three elements it is classified as real estate property.
He questioned why the existing law should be tossed out the
window. This will simply increase taxes and they are already too
high, he said.
2:03:12 PM
CHAIR FRENCH closed public testimony and held SB 153 in
committee.
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