Expert: Jim Root - 11/10/2007

Question
I am currently purchasing a Manufactured home on a foundation and land it resides on. I will be the 3rd owner of the land and home since it was put there in 1993. It has had a FHA loan on it with the previous 2 owners and I am currently getting a FHA loan as well. My delima is , that the banks states that FHA is wanting proof of a title surrender. The realtor has gone back to the closing attourneys from the 2 prior purchases and they have no record of the title to the home. He has been to DMV, they claim that when it was converted to real estate the title was purged. Therefore, there is no title for the home. I have gone to the bank that bought out the bank of the original buyer and they are researching their records to see if they have any information on it. My mortgage co. says they can't release the funds for the home until we find a title. The commissioner of Revenue states there is no title, it was converted to Real Estate in 1993. How can I go about trying to locate a title that doesn't exist. And/or is FHA really requiring this info considering they are the ones whom have been financing the home and property since the very beginning?

Answer
Please let me know how this works out for you, Cindee! You can e-mail me direct @ real-t-pro@comcast.net or call
1-(509)220-6886 to discuss this matter further. If you need to connect with FHA,the FHA Customer Service Center's telephone # is 1-800 CALL FHA (or 1-800-225-5342)--Jim Root

ABOVE IS AN ADD-ON/FOLLOW-UP TO THE ANSWER BELOW:   

Cindee--Once again FHA is being blamed for creating a problem when it probably isn't the culprit! FHA doesn't work your Loan Package, the Mortgage Company's FHA-Certified Underwriter is in charge of it! FHA will never see your Loan File until AFTER your Loan has closed & your Lender sends it to them for their review & approval of Mortgage Insurance! Your problem most likely exists because the Underwriter @ your Mortgage Company doesn't understand what FHA requires with regard to the clearing of Title to the Manufactured Home as Personal Property & conversion of the Home to a Real Estate entity! FHA doesn't need a copy of the original Title(s), but does require that the File contains  proof of the Home's conversion to Real Property & subsequent placement on the Tax Roles!Your Realtor has gone to the past two Closing Attorneys & to the DMV--has s/he or your Loan Officer/Processor gone to the Title Company that is issuing  a Title Insurance Policy in support of your transaction? That's where the problem gets solved!  Your Title Policy should clearly report the surrender of Title(s) and conversion of the original Personal Property to Real Estate. This information in the Title Report is all that FHA needs to satisfy their requirement! Pass this info on to your Loan Officer/Processor, look in the Title Report & if this statement of surrender/conversion is NOT in the Title Policy, have the Title Officer do his/her job, research it & make the needed statement in the Report!
So, no, FHA's most likely NOT requiring anything here--the Underwriter is! It's obvious that FHA was satisfied twice before that the Title surrender & conversion to Realty was done! It's a shame that some Underwriters make things so complicated--and then blame it on FHA!(By-the-way,you can ask questions of HUD/FHA about their program requirements by going to www.fha.gov where you can e-mail your inquiries OR get a toll free phone number for FHA's "Customer Service Department!")Hope this helps you get your Closing done ASAP! GOOD LUCK--JIM