Manufactured Housing News

A study published by the Darla Moore School of Business at the University of South Carolina confirms that diversification minimizes overall portfolio risk and improves performance, which will result in a higher investment turnover ratio. Though diversification is critically important when it comes to investing, over-diversifying a loan portfolio or selecting wrong asset classes may increase your portfolio’s volatility along with downside risk levels, decreasing returns in the long run.

Put simply, “over-diversification” means adding more asset classes than a financial institution can handle. On the flip side, wrong asset allocation usually refers to opting for poorly performing loan products, choosing asset classes highly correlated with each other, or both.

Since the primary goal of diversification is to limit the volatility of your loan portfolio and overall investment risk, spreading your money among different asset classes with low correlations is essential to ensure that, under adverse economic conditions, the loss incurred by some asset classes will be offset by the gains in other classes. This will leave your financial institution less exposed to a single economic event.

Now that we've clarified these aspects, it’s time to discuss how manufactured home loan products can increase your portfolio options.

Lower Risk Levels

Despite common belief, manufactured home loan products are safer than other types of investments. To keep the risk to a minimum, for instance, at Triad Financial Services, Inc., our typical borrowers are at a 43% DTI ratio. In addition, our experienced professionals know how to structure loan portfolios to help investors generate more revenue and profit than if they would choose other loan products. To further reduce portfolio risks, our experts also monitor the ability of borrowers to make sustained payments on their loans, while continuing to attract reliable lending partners and prime borrowers with a low risk of default.

Collateralized Investments

Guaranteed by tangible assets, manufactured home loans are protected by laws and regulations that make possible the placement of liens on collateral and the implementation of other remedies in case of default. As an example, potential financial losses can be minimized by implementing stringent underwriting practices, which can vary greatly from state to state and among lenders. With shorter repayment periods than other types of home loans, manufactured home loan products don’t have too much capital appreciation potential. However, they provide a regular source of income, with returns in the form of interest paid on loan amounts.

Growing Demand

The current affordable housing crisis, predicted to “sink the American middle class”, and increasing regulations, which have made getting an affordable loan more difficult than before, combined with stricter lender requirements are currently limiting the ability of many people to qualify for a conventional mortgage. The unfavorable conventional mortgage climate has caused many home buyers to turn to manufactured home loan products, which are considered today one of the few viable alternative sources of financing home purchases.

Contractual Protection

In addition to the laws and regulations governing the manufactured home lending industry, manufactured home loans are issued based on a written contract. Besides specifying the interest rate and the manner in which funds are extended to the borrower, a mortgage contract can include a series of clauses, such as a debt limit. Though such restrictions may discourage some borrowers, they can enhance the ability of a bank or credit union to get the full amount of loan back, plus interest.

Experienced Management

The manufactured home loan products we provide at Triad Financial Services, Inc. are supplemented by our in-depth knowledge and extensive experience in the manufactured home lending industry. In this sector, management plays a very important role because the way you manage your loan portfolio determines the level of risk on the capital you’ve invested. Since our team isn’t only very scrupulous about avoiding risky moves but also able to offer you expert consulting, give you comprehensive insight into how your capital is managed and protected, and help you eliminate poor underwriting practices and develop new borrower eligibility requirements, your loan portfolio is more likely to generate a higher return on investment.

If you’re interested in complementing your portfolio with a different class of assets that can reduce volatility and risk, our professionals are more than happy to provide additional information about our manufactured home loan products and services. To get in touch with us, please call our toll-free number (800)-522-2013, Ext.-1287 or email info@triadfs.com.