Repossession

Repossession is when a lender takes back property that secures a loan after the borrower defaults. For a manufactured home financed with a chattel loan, the home itself is the collateral, so a lender's remedy on default can include repossessing the home, much as a car can be repossessed.

Repossession is governed by the loan agreement and by state law, which sets out what a lender may and may not do — including notice requirements and limits on how the home may be taken and sold. After a repossession, the lender typically sells the home and applies the proceeds to the debt.

If the sale does not cover the full balance owed, the borrower may still owe the difference, which a lender can pursue through a deficiency judgment. Federal consumer-finance laws can also apply to how these loans and remedies work.

This is general information, not legal or financial advice.