Question: I desperately need to sell a 1997 manufactured home I own in San Jose, Calif. I've had it on the market since February 2003. I've already relocated to the Sacramento area, so now I'm paying for a vacant home in addition to my new residence. Manufactured homes here that are priced at $100,000 or more are not selling. I still owe $105,000. What should I do? I suppose I could go into foreclosure, but that would destroy my credit, which now is very good (my credit score is over 700).

Lisa: You're right, you never want to go into default if you can avoid it. But if you really are desperate to unload a manufactured home, be forewarned: There's a good chance you'll take a loss.

It's a terrible time to try and sell a manufactured home. The industry has taken a serious beating in recent years, in part because manufacturers built far too many units. Also, lenders have had to cut back dramatically on their financing of manufactured-housing properties, due to a wave of bad loans. That tightening of standards has reduced the pool of borrowers who can qualify for a manufactured home, making it even harder for sellers to find buyers.

That doesn't mean you're totally out of luck if you want to sell now. There are plenty of investors who are scooping up manufactured-home properties, but in most cases they're looking to buy at a steep discount so they can make a profit when the market recovers.

You might still decide that you'd rather take a loss rather than keep hassling with the property. Robert Raskin, an investor in manufactured homes in Denver, suggests the following strategies for finding buyers.

First, you might search the Yellow Pages for the names of all the manufactured-housing dealers in the area. Some of them might be interested in buying more units, and if not, they might know other investors that are in the market.

You might also put an advertisement in the local paper, or hand out fliers describing your property in the nearest manufactured-housing park. To stimulate interest, you could offer to cover the first six months of payments for the buyer, or some other similar incentive.

Mr. Raskin says it's also worth talking to your lenders to see what they recommend. Since many lenders now recognize the extent of the problems in the manufactured-housing industry, they might be willing to accept a payment for the home that's lower than what's owed on the property, just to get rid of the problem.

Such "short payoffs" occur more often than you'd think, but it could be tough to negotiate one in your case. For one thing, you've purchased another home, so it's clear you're not exactly destitute. For this reason, the lender might decide it's not wise to be lenient with you, since you probably do have some capacity to repay the loan in its entirety.

There are other loan-workout programs that might be available through your lender, including one type that might allow you to skip a few months of payments if you're having trouble keeping up. But you might still need to convince the lender that you don't have other sources of income to keep paying your loan.

Whatever you do, try to avoid actually defaulting on your loan. Doing so will seriously impair your credit, and it will take years to repair the damage.

-- Mr. Barta is a staff reporter for The Asian Wall Street Journal. His "House Talk" column appears every Friday exclusively on RealEstateJournal.com. E-mail him your questions about the residential real-estate market. Please include your first name and city and state. If your question is answered and posted, we will show your first name and city. Due to volume of mail received, we regret that we cannot answer every question.

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