# I am sad,angry,at aloss.....



## 7thswan (Nov 18, 2008)

Dh and I sold our former farm land, separate from the home and some acerage. We really knocked down the price, times were hard after the Communnity Reinvestment Act tanked the economy and the price of land went thru the floor/basement. We sold to a Young Christian couple with children wanting to live the homesteading life. That was 5 years ago. we sold to them on a land contract with ballon,because we liked them and saw their vision(and agreeded).
They have contacted us, they cannot get a Mtg. to pay us off. They are like us, no credit cards,no car payments ect. See,- what being responsible got them. These Great people have built a house/home with every extra dime they had,besides the LC payment. The house is done,finial inspection had to be done to get a Mtg. They have been turned down many times and finaly called us.
No, we are not going to take it all away, we are not like that even tho legaly we could. We will figure something out. But, I want people to really look at their well laid plans.I put off asking for advice on the $ we were going to make, move to a more remote location OR not, because of my parents health, an addition,move in with them..., so that has been put to rest.But here we are in a totally different mindset. If anyone has any suggestions, I'd appreciate it.


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## MO_cows (Aug 14, 2010)

Sorry this happened. I would suggest you or they browse www.daveramsey.com. I have heard him talk on the radio about getting a home mortgage without any credit history but don't remember the particulars.


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## 1sttimemom (Mar 1, 2005)

Can they continue to live their on a rental bases until they could qualify for mortgage? Maybe they could pay you a small monthly rent and that would help build their credit too?


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## Ozarks Tom (May 27, 2011)

I'm missing something here. They built the house out of pocket, but can't mortgage it and the land to pay the balloon payment? Is the land worth considerably more than the house? Are they financially able to make the payment on land and house?


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## po boy (Jul 12, 2010)

Getting a mortgage loan without credit history in today's market is highly unlikely. 

A small rental payment would not work as they would have payment shock when they apply for a mortgage...................

Is the issue legal title?


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## Grumpy old man (Aug 6, 2013)

This is really sad and I have had to deal with these same issues on property I hold the notes on , it all boils down to money and they signed the contract and are well aware of the consequences , I waited and gave the couple I was dealing with an extra 18 months to no avail , they were in worse shape after the 18 months so I had to take it back . The real problem is they trashed the place and stole everything they could carry off before they left including my shed and 4 acres worth of t posts ? and all the appliances I bought new .so even with extra time of 18 months with NO payments I still lost out on the sale ,the payments,and now I have to fix everything and find a new buyer for a property I was nice enough to sell with no hard qualifying or high payments .believe me I'm not sure If I'll do it again !


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## 7thswan (Nov 18, 2008)

Ozarks Tom said:


> I'm missing something here. They built the house out of pocket, but can't mortgage it and the land to pay the balloon payment? Is the land worth considerably more than the house? Are they financially able to make the payment on land and house?


 The land and house is worth considerably more than the balloon on the LC. It's all about the credit the new owners have-which is none according to the banks they applied to. I guess paying on a LC with no late payments meens nothing to them. That is what is confuseing, LC's meen nothing to your credit company's.


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## 7thswan (Nov 18, 2008)

po boy said:


> Getting a mortgage loan without credit history in today's market is highly unlikely.
> 
> A small rental payment would not work as they would have payment shock when they apply for a mortgage...................
> 
> Is the issue legal title?


 Yes, we hold the title. Our contract says they do not own it until they make the full ballon payment. They built the house, the land was vacant until we sold it to them.


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## Becka03 (Mar 29, 2009)

what is LC? Line of Credit?


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## po boy (Jul 12, 2010)

Hard to get a loan approved with only one piece of credit unless the lender will look at alternative credit. Alternative credit would be utility bills and auto insurance. FHA has a program for alternative credit.

If they paid you in cash, that could be a problem also.

Lots of variables........
Small loan amount?
Will the home meet appraisal guidelines?


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## po boy (Jul 12, 2010)

Becka03 said:


> what is LC? Line of Credit?


 Land Contract


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## nebula5 (Feb 4, 2003)

So is it just the balloon payment they owe on (land) or did they need a mortgage for the house?
If it's just the land, have you considered holding the mortgage yourself, and they make payments to you? Sounds like they have been good with their payments to you so far.


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## 7thswan (Nov 18, 2008)

po boy said:


> Hard to get a loan approved with only one piece of credit unless the lender will look at alternative credit. Alternative credit would be utility bills and auto insurance. FHA has a program for alternative credit.
> 
> If they paid you in cash, that could be a problem also.
> 
> ...


 State equalized value, makes the place worth well over 300,000, Yes it is worth more than they owe us, it is just that they have No "normal" credit, they have a cell phone,that's it. We are trying to help them find a bank in farming area, such as where we are now. Our old place is zoned Res. now, that is why we moved.Banks in Res. areas are not too friendly with anything over 10 acres(here anyway).


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## 7thswan (Nov 18, 2008)

nebula5 said:


> So is it just the balloon payment they owe on (land) or did they need a mortgage for the house?
> If it's just the land, have you considered holding the mortgage yourself, and they make payments to you? Sounds like they have been good with their payments to you so far.


Tecinaly, they only need a Mtg to pay off us-the house is a bounus to a lein holder because it is fully done and payed for.


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## 7thswan (Nov 18, 2008)

nebula5 said:


> So is it just the balloon payment they owe on (land) or did they need a mortgage for the house?
> If it's just the land, have you considered holding the mortgage yourself, and they make payments to you? Sounds like they have been good with their payments to you so far.


 Yes, we could just hold or redo the LC, but we need to do something in regards to my parents, I need to take care of my Mom,she is in a wheel chair ,new as of last week and today I found out she will need sugery on Nov 19. 1 year recovery. So, the $ sure would make those family descions more realistic. Arround here, it takes a long time for places to sell if one doesn't take a huge hit.


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## thestartupman (Jul 25, 2010)

One way would be to carry a short term contract. That is completely ligit, then have them refinance it. Banks usually are more friendly to a refinance.


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## willow_girl (Dec 7, 2002)

There are companies in Michigan that will buy out the contract holder's interest in a land contract. You won't get the full value, of course, but you'll get something, and it won't cost you anything to inquire.


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## Vosey (Dec 8, 2012)

thestartupman said:


> One way would be to carry a short term contract. That is completely ligit, then have them refinance it. Banks usually are more friendly to a refinance.


This is similar to what we did with our first house in the 1990's, my father had the contract after we built the house and then we refinanced it with a bank. We had no bad credit, just not much credit.


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## Rick (May 10, 2002)

Could you use the land as collateral and borrow the amount of the balloon, amd then set up a new LC and term equal to the term of the loan you take out, allowing them to consign, and pay you the loan payments?


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## farmgal (Nov 12, 2005)

Im sorry but I do not believe them. I had no credit history except electric and gas bills. I was living on a land contract with my current home when purchasing my farm and land. all the bank did was check my income and had me give them a note from my current contract holder stating how my payment history was. 

I really think they are lying. Sorry to say. I just had a friend buy a place with no credit history also. As long as the job is secure and no bad credit, mortgage was approved. Why do you think they did a balloon in the first place, instead of just getting a normal loan? Because they already had bad credit. 

I'd give them so much time to get the loan. If not, then it goes for sale, they can get the difference. I dont feel sorry for them, they pulled a fast one on you and now your falling for it.


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## Ann-NWIowa (Sep 28, 2002)

The mortgage climate is very cool right now unless you have an excellent credit history. I don't know how many acres you're talking about but if its too small to be viable as a farm and too large to be considered a residental acreage that also could be an issue. Banks are very wary currently.


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## sss3 (Jul 15, 2007)

I, too, have a hard time believing them. I would think if they applied for a loan, they would have received some kind of letter, from the bank saying the loan had been denied. I'd tell them; in order for you to help them, you'd like to see letter or letters.


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## Molly Mckee (Jul 8, 2006)

Dave Ramsey says Churchill Mortgage will do a loan like that with no credit score. Check his website for contact information.


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## NamasteMama (Jul 24, 2009)

DH does mortgages. He said this, tell them to get a secured card, never charge more than 30% of the card and make the payments every month. This should be enough to get credit in 6 months. Do this with a credit union and apply for the mortgage with them.


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## po boy (Jul 12, 2010)

7thswan said:


> State equalized value, makes the place worth well over 300,000, Yes it is worth more than they owe us, it is just that they have No "normal" credit, they have a cell phone,that's it. We are trying to help them find a bank in farming area, such as where we are now. Our old place is zoned Res. now, that is why we moved.Banks in Res. areas are not too friendly with anything over 10 acres(here anyway).


 Under these circumstances, Fannie, Freddie, FHA, and VA won't work. Local banks to the property or maybe something Like Farm Credit Services would be your best bet.

There may be some hard money lenders that will do the loan, but I would not do that.


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## Rick (May 10, 2002)

Sandra Spiess said:


> I, too, have a hard time believing them. I would think if they applied for a loan, they would have received some kind of letter, from the bank saying the loan had been denied. I'd tell them; in order for you to help them, you'd like to see letter or letters.


It would be reasonable to collect a minimum of 3 denial letters before proceeding.


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## 7thswan (Nov 18, 2008)

Thank You very much for all the input, I will check into as much of this as I can. I never thought of some of the things You all mention here, Thanks.


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## Forerunner (Mar 23, 2007)

In the mean time, Swan..... I appreciate your willingness to work with these people, even at a sacrifice to yourself.
There is where the honor is.


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## po boy (Jul 12, 2010)

If all else fails and you don't want to evict them, rewrite the contract on a short term with payments about the same or higher than the mortgage they want to get. Interest rate should be at least 6%. They must pay you by check on time and they should keep all their cancelled checks.

In addition, you must stipulate that they obtain other credit in order to qualify for a mortgage loan.

If there are issues with the home construction, they must resolve those immediately.

Make this their last chance...


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## 7thswan (Nov 18, 2008)

Forerunner said:


> In the mean time, Swan..... I appreciate your willingness to work with these people, even at a sacrifice to yourself.
> There is where the honor is.


 Thank You Forerunner, that You say that, means a lot to me..


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## TripleD (Feb 12, 2011)

I bought a rental a few years ago with some rich ladys money. She was tired of 2% on CDs . I told her I would give her 5% and she could hold the mortgage. I still send her a check each month. Works out well for both of us.


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## sidepasser (May 10, 2002)

When you finance land for someone, can you report the on-time payments to the credit bureau so that it shows they are making their payments on time? Was just thinking that might be a way to show "credit history" so that when it comes time for a balloon note to be paid, the banks could see that the people have a good credit history.

Sorry this is happening, but banks seem to have tightened up requirements for getting loans and most don't understand or want to deal with acreage. If it is over five acres or the house is worth less than the land - banks won't deal with people.

Maybe Farm Credit Services could help? At the very least, maybe you can sell the place to someone else and pay these folks for the difference as someone else suggested or is that allowed in a land contract?

I think emotional investment into the business deal is why most people will not owner finance that can afford to do so. If the folks can't/won't pay, most folks won't evict them and/or struggle along trying to "help" the folks until they end up either losing their money or their mind worrying over it.

Hope things work out for you, I understand about having to take care of your Mom, I am buying a bigger place so my Mom can come live with me.


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## Wolf mom (Mar 8, 2005)

Are they trying to get just a land loan or will they bundle the house and land together? It's usually much easier to get a loan if they bundle. 

Be strong!! This is business....


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## 7thswan (Nov 18, 2008)

The people actualy applied at the bank that they deposit the check to each month(Dh's bank, ), so the bank knows of the payments and they have never once been late. Ya, my mind is churning, trying to figure out things for my Mom. I haven't even tried to approach Her with the living arrangments we might have to make. She had always said that she did not want to be a burden and if she became one ,just take her to the cabin and let her die alone.Dh and I had planned to buy the cabin off my parents with this $, so they could use the $ to enjoy their life,instead of just willing it to me. Mom was looking forward to me having it,it is too much for her to take care of. Her one requirement was that I would always share it with family-that's no problem,none of them even live here. I did the same with my Grandparents Lakehouse,bought it ,so Grandpa could have the cash before he died, even tho he insisted he just give it to me. It's kinda overwhelming right now.


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## 7thswan (Nov 18, 2008)

Wolf mom said:


> Are they trying to get just a land loan or will they bundle the house and land together? It's usually much easier to get a loan if they bundle.
> 
> Be strong!! This is business....


 Yes, they bought the land from us and the house they built on it is done. So they would be getting a Mtg. for the whole shebang. These people are no different than anyone on this site, homeschool,gardens,livestock, sell produce at the farmers market...I know it's business,but it feels closer than that.


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## sidepasser (May 10, 2002)

Here is a thought which a banker told me:

If the land is worth more than the house - say you have 20 acres of land worth 10,000 an acre. The house is only worth 80,000. That makes the whole place worth 280,000. If you try to get a mortgage on the WHOLE place, most banks won't do it because the house is not worth as much as the land.

Ask the bank if they would be willing to loan on the HOUSE and say 5 acres for the amount of the balloon note? The house and that land would be cut off from the rest and put up as collateral, the rest of the land would remain separate and not part of the mortgage.

That is how many people in my area get loans for farms..the land is worth more than the house..so they cut the house and x number of acres out to equal what is being borrowed.

perhaps that is a way out? It should not be a problem if the house and land are worth way more than what is being borrowed..banks are usually glad to hold more collateral (in case they have to foreclose). 

Other than that, I can't think of another way to deal with a regular bank. 

Is the bank requiring them to pay down anything, i.e. 10-20% in order to get the mortgage? That may be a problem in itself.


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## unregistered5595 (Mar 3, 2003)

Are you really sure these people want the land and house? Sometimes people enter into agreements and their thoughts and hearts change and they realize they may have to default, lose it, and they've made peace with that. 

It could be their relatives need them somewhere else, their job situation changes, they bit off more than they can chew, they loved it but that time has passed.

When you said the bank wouldn't give them the mortgage, they may have already made up their minds they were willing to default on the land contract. It is easier to say "the banks wouldn't give them the mortgage" than to say "we want out". 

I once bought half a house, the other half owners were so unreasonable, I bought them out, but, a year later, I didn't want to raise my child on a lake, and sold it out--things change.

Just something to think about. ~Feather


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## Taylor R. (Apr 3, 2013)

A non-traditional credit report means next to nothing in the market these days. When we were first looking to get a mortgage, USDA rural development loans would accept a non-traditional credit report (statements from our utility companies, landlord, etc., stating that we pay the full amount on time every month) in order to avoid getting credit cards or auto loans or what have you in order to buy a house. Before we got the paperwork completed, the USDA quit accepting non-traditional credit reports. We searched for a long time for a bank or credit union that would give us a mortgage with no credit (good or bad) and couldn't find one that didn't require between 15 and 20% down (not plausible for us). We took out a minimal car loan, got a store credit card (which we use once a month and pay off on the spot) and it's built our credit fast enough in one year that we're now shopping around for mortgages. It stinks that we had to get along to go along in regards to the whole credit thing, but after the mortgage crisis, the banks got tough. If the major credit bureaus don't have record of it, it didn't happen, and your 'regular' expenses only make it onto your credit report if you majorly messed up.

I really admire what you're doing for those people, 7thswan, but if you can't find a way to make it work out for your family as well, I'd think you've got to do what you've got to do.


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## Maura (Jun 6, 2004)

The Mayville bank does not sell it's mortgages. Have them go there and ask what they need to do. If they need a credit history, then they need to create a credit history. Frankly, this is homework that they should have already done. A couple of credit cards that they use as cash for groceries, etc. Ask and find out.


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## 7thswan (Nov 18, 2008)

Maura said:


> The Mayville bank does not sell it's mortgages. Have them go there and ask what they need to do. If they need a credit history, then they need to create a credit history. Frankly, this is homework that they should have already done. A couple of credit cards that they use as cash for groceries, etc. Ask and find out.


Thanks, Maura, Dh gave them a name and # on Wendsday, for Mayville. I've got a list of things I'm going to ask to send me copys of. We had called them earlier in the year about the finals. I'm woundering a whole mess of things now...


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## Tiempo (May 22, 2008)

I'm sorry this has happened to you Swan, and also admire you for trying to help them, but to be honest, they've managed things very badly. They HAD to have known all along they would need decent credit to make the balloon but have done nothing about it...They've been very, very irresponsible at your expense.

We bought our place 5 years ago on a LC, we had to go that route as my husband's credit had been ruined by ID theft.

We've worked our patooties off to fix his credit for all that time and yes, had to do a couple of things we didn't want to like getting a secured credit card and a truck loan that we didn't need to get (needed the truck, but could have paid for it cash) because we KNEW he would need a good credit score to meet our contract. 

We made our LC payments 100% on time for 5 years, that didn't boost his CR at all.

Finally closed on our mortgage and paid the balloon 2 months ago.

I hope you can find a way through this, but I'd be really ticked at the family...they've been very irresponsible and you shouldn't have to suffer for it.


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## Brighton (Apr 14, 2013)

7thswan said:


> Yes, they bought the land from us and the house they built on it is done. So they would be getting a Mtg. for the whole shebang.


But they are not getting a mortgage for the whole "shebang", as they built the house themselves and paid (I assume) as they went along to build it, so they just need a mortgage to pay you for the LAND they signed the land contract with you for, correct??

If it was me, I would resign a new contract with them for a year, no more no less, up their interest a bit, maybe?


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## Tiempo (May 22, 2008)

Swan, did you register the contract?


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## Murramarang (Dec 18, 2011)

My advice is to point them to a mortgage broker rather than going to banks directly......they seem to be more in the know of where to get financing and I have seen them work miracles!


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## po boy (Jul 12, 2010)

Brighton said:


> But they are not getting a mortgage for the whole "shebang", as they built the house themselves and paid (I assume) as they went along to build it, so they just need a mortgage to pay you for the LAND they signed the land contract with you for, correct??
> 
> If it was me, I would resign a new contract with them for a year, no more no less, up their interest a bit, maybe?


 If they did all the work, I hope the construction meets appraisal standards.

Correct, if the resign raise the rate and shorten the term so the payments are substantial.


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## logbuilder (Jan 31, 2006)

po boy said:


> I hope the construction meets appraisal standards.


This is a very good point. In theory, the house could be a liability if it was built improperly. You might not have to worry in your area. But in mine, once inspectors find out about a building not permitted, inspected and all to code, they can force it to be demolished. Worst case though. Most times there is a settlement but still, it costs.


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## texican (Oct 4, 2003)

One really shouldn't go into debt knowing there's going to be a balloon payment in the future, without immediately jumping into the "building up my credit" game.

I can understand banks not wanting to give credit to people with no credit history... it's the paradox of credit... the ones who need it can't get it, and the ones who don't need it, can. My second cousin owns a bank (where I bank) and he explained it very simply... Build up your credit with us, starting with a car, and when it's paid off, we'll give you more, and more and more depending on how you manage your assets... build your assets and you'll have more collateral...

If I knew I had five years to get ready for the need for a large payment *I knew I'd not be able to afford* I wouldn't wait until the last minute to try and find credit.

If the land contract was changed over to a Warranty Deed w/vendors lien, (from my experience) a bank would feel a lot more comfortable issuing a mortgage. Anything less (WD or WD w/VL) redflags your file.

It also helps to 'be' part of the community... In the last 20 years a dozen or so families have moved into our community... some have went out of their way to fit in, visiting every family up and down the road, drinking coffee... and getting to know everyone. Joining church, volunteering at schools, being overall good people. And a few have went out of their way to not fit in... turning neighbors away, being unsociable. Guess which group will find it easier to get a loan?

I'd wish em 'good luck... they're going to need it.


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## Tiempo (May 22, 2008)

Exactly Tex. When we entered the land contract, building good credit was a priority from day one because we knew the terms, responsibilities and what it would take to meet them.

I'm stunned these people took on this much responsibility thinking they could walk into a mortgage with no credit history.


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## 7thswan (Nov 18, 2008)

Brighton said:


> But they are not getting a mortgage for the whole "shebang", as they built the house themselves and paid (I assume) as they went along to build it, so they just need a mortgage to pay you for the LAND they signed the land contract with you for, correct??
> 
> If it was me, I would resign a new contract with them for a year, no more no less, up their interest a bit, maybe?


Yes, That is what I'm woundering now-Did they ask for a mtg for More than they owe us. If they just asked for what they owe us, that would give the Mtg Bank ,Equity worth well over half.


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## 7thswan (Nov 18, 2008)

Tiempo said:


> Swan, did you register the contract?


 Yes, a Title co. did the work for us. I've had a bad experience with the work an attorney did for us before, so getting info from everyone here, is helping a lot on what I need to think about.


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## 7thswan (Nov 18, 2008)

po boy said:


> If they did all the work, I hope the construction meets appraisal standards.
> 
> Correct, if the resign raise the rate and shorten the term so the payments are substantial.


 Yes, the Township was very involved because we(just Dh and I had a legal fight with them. so the township kept a keen eye on the building permits and inspections. The house was owner built,he is a Mason, the house is built of stone,not real big meets the Min. requirements for the Township.It has passed final inspection.


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## Murramarang (Dec 18, 2011)

texican said:


> It also helps to 'be' part of the community... In the last 20 years a dozen or so families have moved into our community... some have went out of their way to fit in, visiting every family up and down the road, drinking coffee... and getting to know everyone. Joining church, volunteering at schools, being overall good people. And a few have went out of their way to not fit in... turning neighbors away, being unsociable. Guess which group will find it easier to get a loan?


This seems a strange statement - and one I can't agree with. "Fitting in' with your neighbors will do nothing to help you get a credit score or get a mortgage... 

...and in this same part of the forums we hear a lot from people who want to hide away from the world. People who don't want the neighbors to even know they are there. People who arm themselves to protect themselves from the threat of 'neighbors'.

Strange indeed.

The issue here is that the folks did not work hard at their credit score. I think I would have two options.

1. Kick them out, lick your wounds and try and sell it again. Its a HUGE pain and a bitter pill to swallow.

2. Extend the option for them for a short period and insist that they get financial advice from a mortgage broker about what they have to do to get a loan in the short term (ie raise credit scores etc etc). Sometimes its easier to work with who you have than start a fresh.

Good luck my friends....sending positive thoughts that it all works out for you.


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## 7thswan (Nov 18, 2008)

These Folks are very involved in the local Church. They are getting Legal advise from a member there. They are well aware -NOW ????- that they are in trouble. I don't know what to think of how they have procided to this point, and they didn't know to Make sure of their credit. I just don't know, NaÃ¯ve???


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## Tiempo (May 22, 2008)

7thswan said:


> These Folks are very involved in the local Church. They are getting Legal advise from a member there. They are well aware -NOW ????- that they are in trouble. I don't know what to think of how they have procided to this point, and they didn't know to Make sure of their credit. I just don't know, NaÃ¯ve???


Naive is one word for it. I have others.


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## po boy (Jul 12, 2010)

7thswan said:


> Yes, the Township was very involved because we(just Dh and I had a legal fight with them. so the township kept a keen eye on the building permits and inspections. The house was owner built,he is a Mason, the house is built of stone,not real big meets the Min. requirements for the Township.It has passed final inspection.


 Log homes, earth berm homes and any type construction that is norm for the area can be a problem with Fannie, Freddie and Govie loans. Lender may require recent sales of stone construction homes..... It would be a good idea to ask them if the property was appraised.

If the lender is a local bank that will not sell the loan, may not care.

Also, if lack of credit is the issue, the bank may take a cosigner.....

There is nothing wrong with you putting a lot of pressure on them.


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## Vosey (Dec 8, 2012)

7thswan said:


> These Folks are very involved in the local Church. They are getting Legal advise from a member there. They are well aware -NOW ????- that they are in trouble. I don't know what to think of how they have procided to this point, and they didn't know to Make sure of their credit. I just don't know, NaÃ¯ve???


They really could just be naive. My MILs long term partner went to buy a truck about 5 years ago and couldn't get financing as he had no credit. This was the first time he had ever applied for credit, he owns his land, built his house and all other vehicles with cash. He is self-employed as an electrician. He also owns investment real estate. He thought that owning his land, business and house would be all he needed to finance a truck. He was in his 50's then!


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## Maura (Jun 6, 2004)

I don't think anyone in our area gives loans on vacant land. They would "have" to roll the homestead together, house and land in order to get a mortgage. This shouldn't really be a problem, since the value of the complete unit far outweighs what they need to borrow. If they need $20,000, they don't have to get a mortgage for $300,000 just because that is what the property is worth.


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## 7thswan (Nov 18, 2008)

Maura said:


> I don't think anyone in our area gives loans on vacant land. They would "have" to roll the homestead together, house and land in order to get a mortgage. This shouldn't really be a problem, since the value of the complete unit far outweighs what they need to borrow. If they need $20,000, they don't have to get a mortgage for $300,000 just because that is what the property is worth.


 That is what they are supposed to be doing. I hope they are only trying to get a loan for the LC,because the house added to it is equity. That should make a Mtg co happy. Kinda like putting 50% down on a house.


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## po boy (Jul 12, 2010)

Maura said:


> I don't think anyone in our area gives loans on vacant land. They would "have" to roll the homestead together, house and land in order to get a mortgage. This shouldn't really be a problem, since the value of the complete unit far outweighs what they need to borrow. If they need $20,000, they don't have to get a mortgage for $300,000 just because that is what the property is worth.


 If the lender does an appraisal, they know it's not a land loan.


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## ronron (Feb 4, 2009)

My Parents were well off had a huge farm, beautiful home with a three bedroom guest house, purchased a new car and truck every three to five years, carried 100's of dollars in cash in his wallet paid bills by going around town and paying everything in cash had a checking account, savings account, some safe investment's but couldn't rent a car when he traveled because he didn't have credit... They were a product of the depression and thought credit cards were the devil...


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## wottahuzzee (Jul 7, 2006)

I know you want to be kind to this young couple, however, you have family issues coming to a head. As a last resort, you might resell the property and then give them a fair payment for the house. I know that seems mean but you have to think of yourself. Maybe having the property up for sale might give them enough of a push to find some kind of alternative financing.


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## Melissa (Apr 15, 2002)

If they absolutely can't get a loan, could the property be divided so they could keep the house and some acreage and you would get enough land to equal the amount that is still owed to you?


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## ||Downhome|| (Jan 12, 2009)

I know realtors that have investors, if your young couple has Down payment money ,I believe 10% , they can arrange a Investor and setup a Land contract to cover the loan.
Its normally a balloon contract, So they would either have to bust butt to pay it off or develop a credit history and hope they can mortgage later.
I'm sure these folks would exercise there legal options.

If you Payoff is small compared to the property value, they may not even need the down payment.

I'm not sure how they run home equity loans any more?
That could be a option.

I went through the Realtor/Investment route then a year before it came due did a home equity loan to pay them off.
No way I could get a actual mortgage.


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## Molly Mckee (Jul 8, 2006)

It sounds to me like you have some naive people getting bad advice from someone. Who in their right mind would build a house that is payed for on land they can't pay for? I would work with them as much as I could (without hurting my family) as long as they were really trying and not letting someone influence them to make bad decisions. They are very lucky that you care and are not simply foreclosing. I hope they realize what a mess they have put themselves into.


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## backwoods (Sep 12, 2004)

Sounds stupid, but we once had to "cut out" an acre & the house from a larger acreage in order to get a conventional mortgage from a bank. They wouldn't finance the house and large acreage, but did the house & 1 acre. Just part of the "game" I guess. 

That said, I have a friend who owns (nothing owed) several properties and has a 800 plus credit score, and still got a ration of bull when she wanted to get a loan on a condo as an investment, even though the condo she wanted to buy was selling for a LOT less than what its worth.


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## TheMartianChick (May 26, 2009)

There are ways for you to report their on-time land contract payments to the credit bureaus. I'd have to do a bit of digging to find out how it is done. 

Also, they will need to take the initiative and build some credit for themselves. There are catalog companies that give credit to people with no credit history. There are also secured cards that will report as credit payments on a credit report. The ones through credit unions usually have the lowest fees. They don't have to run up a lot of debt... They just have to demonstrate that they know how to use credit wisely. To a lender, not using credit IS NOT a sign that someone knows how to use it wisely.

Credit unions are also a bit more likely to accept alternate credit information from utility companies in the absence of a credit report history.

Edited to add: Here is information about reporting payments to a credit bureau:

http://www.bankrate.com/finance/credit-cards/boost-credit-score-by-self-reporting.aspx

http://www.wikihow.com/Report-to-Credit-Bureaus

http://homeguides.sfgate.com/report-tenant-credit-bureau-2590.html


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## 7thswan (Nov 18, 2008)

Got notice yesterday from the little bank in town that they are looking into helping this couple. They are going to speek with the other bank where the LC payments have been going to.


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## po boy (Jul 12, 2010)

The normal procedure (FHA) for alternative credit is the originator gets letters from the creditors showing at least 12 months history. The letter must be on the creditor's letterhead and the originator sends those letters to a 3rd party outfit that compiles the report for the underwriter. This is the 3rd party outfit my company used for 15 years.

It is unlikely a bank writing a loan they plan to retain will do this. They most likely pull one credit bureau and base their decision on that report.

Note: I retired 4 or so years ago and believe this is still the way it is done.


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## wy_white_wolf (Oct 14, 2004)

Have you reported the LC to the credit reporting companies? Having that show on the credit reports would help them and show a credit history.

WWW


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## sidepasser (May 10, 2002)

7thswan said:


> Got notice yesterday from the little bank in town that they are looking into helping this couple. They are going to speek with the other bank where the LC payments have been going to.



Glad to hear that there may be a bright spot in this for you and your borrowers. Hope that it works out for both of you!


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## Forerunner (Mar 23, 2007)

ronron said:


> and thought credit cards were the devil...



......and they were right.

What wise entity places a child in a candy store and turns their back ?


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## texican (Oct 4, 2003)

Murramarang said:


> This seems a strange statement - and one I can't agree with. "Fitting in' with your neighbors will do nothing to help you get a credit score or get a mortgage...
> 
> ...and in this same part of the forums we hear a lot from people who want to hide away from the world. People who don't want the neighbors to even know they are there. People who arm themselves to protect themselves from the threat of 'neighbors'.
> 
> Strange indeed.


Good luck walking into a bank, and try to get money, in hard times... when absolutely no one there knows your name.

It may indeed sound strange... especially if one hasn't had to walk into a bank to get a loan.

I've taken out loans (when I was a youngster) where my collateral meant nothing, but the mere word of someone the banker knew and trusted was all that was needed, to get a loan...

You are correct about a lot of us wanting to maintain a low radar presence... but, if one doesn't have interaction, the consequences are dire, when one gets into trouble...

As far as being completely under the radar, even in hard core prepper circles, there are two opposing schools of thought. One says hide, let no one know you're there, and maintain OPSEC. Other says maintain OPSEC, but interact and know everyone in the community that you can, help out, be part of the community.

Problem with the first, is that EVERYone knows 'you'... you're the stranger that's here just every other weekend, then leaves. Locals know genealogy of land... old man Cooper had that tract, then his son, then his son sold it Mr. Jones, then Jones sold it to some strangers... As long as they don't know you, you're at risk... at least your possessions are. If they know you and see a local evildoer heading down your road, they might get involved... don't know you... who cares.

I can now get a loan at the bank by just walking in, filling out the loan form, and signing my name. Some places, your word is still your bond. Of course, I don't want any stinking loans, even with almost interest free money.


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## terri9630 (Mar 12, 2012)

ronron said:


> My Parents were well off had a huge farm, beautiful home with a three bedroom guest house, purchased a new car and truck every three to five years, carried 100's of dollars in cash in his wallet paid bills by going around town and paying everything in cash had a checking account, savings account, some safe investment's but couldn't rent a car when he traveled because he didn't have credit... They were a product of the depression and thought credit cards were the devil...


My husband is the same way. The only card we have is care credit. I use it for the dentist and at the vet for checkups. No interest if you pay it off on time. Hubby wanted it for emergencies but its pretty useless as the Drs and hospitals don't take it. It helps with our credit score though.


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## catspjamas (Jul 14, 2013)

Credit does not have to mean credit card. I spoke with a mortgage broker when I wanted to buy a house. He said I didn't have bad credit, I didn't have credit. So he suggested a line of credit through my credit union. I got a secured line of credit., gave the credit union $500 they gave me a line credit for $500. I used it for 6months. It raised my credit score enough points to qualify for a mortgage. After I was in my house, I had the credit union use the $500 they were holding to pay off the line of credit.

I still don't have credit cards.

Sent from my XT907 using Homesteading Today mobile app


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## Grumpy old man (Aug 6, 2013)

I use prepaid credit cards for online purchases and such , Citi bank and American Express also have prepaid cards ,if you just have to have one with your name printed on it you can load them with up to $5,000.00 and a great way to carry large sums of money on vacation or trips if your worried about carrying cash .And yes their good anywhere that takes Visa or Mastercard and I have used them for rental cars/hotels /airfare also . I don't use banks or credit unions to manage my cash .


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## NickieL (Jun 15, 2007)

That's a good idea... Prepaid cards for rentals. Never thought of that but worried about that for travel since I don't keep credit cards. 


Grumpy old man said:


> I use prepaid credit cards for online purchases and such , Citi bank and American Express also have prepaid cards ,if you just have to have one with your name printed on it you can load them with up to $5,000.00 and a great way to carry large sums of money on vacation or trips if your worried about carrying cash .And yes their good anywhere that takes Visa or Mastercard and I have used them for rental cars/hotels /airfare also . I don't use banks or credit unions to manage my cash .






Sent from my iPhone using Homesteading Today


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## terri9630 (Mar 12, 2012)

We use the prepaid cards for travel and most internet purchases. We went to Disney this summer and we had one card for gas in case we hit a pump with a skimmer and each of had a prepaid card to use on 'goodies' while we were in the parks. That way we didn't have to take our bank cards or carry much cash.


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## farmerj (Aug 20, 2011)

what's the issue with using a credit card.

It's a tool that if managed, gets you further ahead in life than you care to admit.

My wife and I are taking a week long trip to Miami based on the reward miles from my one card. Paying for the airline tickets and the motel room for me for a week while she goes on her cruise.

I just pay it off each month.


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## terri9630 (Mar 12, 2012)

farmerj said:


> what's the issue with using a credit card.
> 
> It's a tool that if managed, gets you further ahead in life than you care to admit.
> 
> ...



Theres not much wrong with them, until you loose one, or someone gets your information, or you loose your ability to pay for whatever reason. 

When we travel we estimate our fuel usage one way and put that much on a prepaid card. My dad used his credit card to buy gas on a trip and when he got his statement there were $600 worth of charges that weren't his. Cops said one of the pumps he used had a skimmer in it. I've lost a card and had to wait for a new one. A huge hassle when you are traveling.


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## po boy (Jul 12, 2010)

terri9630 said:


> Theres not much wrong with them, until you loose one, or someone gets your information, or you loose your ability to pay for whatever reason.
> 
> When we travel we estimate our fuel usage one way and put that much on a prepaid card. My dad used his credit card to buy gas on a trip and when he got his statement there were $600 worth of charges that weren't his. Cops said one of the pumps he used had a skimmer in it. I've lost a card and had to wait for a new one. A huge hassle when you are traveling.


 What if you lose your prepaid card?


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## Grumpy old man (Aug 6, 2013)

po boy said:


> What if you lose your prepaid card?


it's covered just like a regular card is ,PROBABLY EASIER to get a new replacement from a local walmart .The main reason to not have a bank issued card is I don't use banks to tell me how to use my money and record my every transaction and where I've been . I pay cash or I don't buy it ! Why would anyone think a credit card with the fees and payments/interest helps you ? All they do is allow you to spend money before you make it .Banks and card companies love to keep the rat on the wheel so to speak .:bash:


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## po boy (Jul 12, 2010)

Grumpy old man said:


> Why would anyone think a credit card with the *fees and payments/interest* helps you ? *All they do is allow you to spend money before you make it *.Banks and card companies love to keep the rat on the wheel so to speak .:bash:


 I use a credit card monthly, have no fees or interest as i pay it off monthly. In fact, I have used credit cards for over 40 years and never paid a fee. 
For me, it lets me use the bank/credit card's money for 30 days or so for free.

Some of us do manage our money.


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## Ann-NWIowa (Sep 28, 2002)

We also use credit cards monthly and pay them off monthly so no fees. We keep a strict budget so KNOW we have the money to pay before we use the card. At the moment I have around $150 on a couple of cards. The expenditures have already been entered into this month's budget although payments will not be made until November. 

We may use a cc for an emergency BUT the cc is not the emergency fund. The emergency fund is set aside for emergencies and would be used to pay the cc should it be used for emergency purposes.

Cc's are a tool not evil in itself. If you do not manage them properly, use them for "extra" income or as an emergency fund, you should not have one.


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## coolrunnin (Aug 28, 2010)

Grumpy old man said:


> it's covered just like a regular card is ,PROBABLY EASIER to get a new replacement from a local walmart .The main reason to not have a bank issued card is I don't use banks to tell me how to use my money and record my every transaction and where I've been . I pay cash or I don't buy it ! Why would anyone think a credit card with the fees and payments/interest helps you ? All they do is allow you to spend money before you make it .Banks and card companies love to keep the rat on the wheel so to speak .:bash:


Your paying more in fees than I am with a bank issued card using the prepay. they dont issue them for free and charge to load them. My work card is no fee and paid off monthly no fees and no interest and I get points to use for fun or whatever.


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## po boy (Jul 12, 2010)

coolrunnin said:


> Your paying more in fees than I am with a bank issued card using the prepay. they dont issue them for free and charge to load them. My work card is no fee and paid off monthly no fees and no interest and I get points to use for fun or whatever.


In addition, I get 1 or 2% back, one year of additional extended warranty on larger purchases, Free Rental Car Insurance and purchase protection.

Several years ago I had my septic lines replaced and the contractor made an absolute mess of my yard. Her refused to fix. I used the credit card for the repairs and they reversed the charges after hearing my side. The contractor did the repairs to my yard and I agreed to release the funds.

It's wise to use a credit card if you do it the right way.


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## terri9630 (Mar 12, 2012)

po boy said:


> What if you lose your prepaid card?


You call the card company, they cancel the old card and reload the funds onto a new card. Just write down the information on the card so you have it. We use them quite frequently for our daughter. Between band, 4-h and shooting competitions she travels frequently. I'm not getting a credit card for, or giving a credit card to a teen.


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## ChristieAcres (Apr 11, 2009)

I worked as a Loan Officer for a Mtg Broker for 5 years. When a Borrower had a bad credit score or no score, I would offer free advice. In addition, I would assist in helping them clean up their Credit Reports of duplicates and errors. "No credit" was an easy one, but the process took a year. I would recommend prepaid credit cards, revolving credit line, store credit, etc... They would need at least (4) revolving lines of credit reporting to all (3) credit bureaus. When I was told the Borrower paid cash for everything, I then simply advised the only use for the credit cards was to pay for food, fuel, and regular budget expenses, NOTHING extra. Each month to pay off the credit cards one month, let a small amount carry to the next one, pay it off again, etc... The ratio was to be kept under 35% of the limit at all times. This process took one year (I insured they met every Borrower condition before I issued them a Pre-Approval). One can easily find out the basic loan requirements by contacting a local Loan Officer. 

Your Buyers were very irresponsible, considering they had five entire years to insure they would qualify for a loan, knowing full well they would have to pay off the balloon!


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## farmerj (Aug 20, 2011)

terri9630 said:


> Theres not much wrong with them, until you loose one, or someone gets your information, or you loose your ability to pay for whatever reason.
> 
> When we travel we estimate our fuel usage one way and put that much on a prepaid card. My dad used his credit card to buy gas on a trip and when he got his statement there were $600 worth of charges that weren't his. Cops said one of the pumps he used had a skimmer in it. I've lost a card and had to wait for a new one. A huge hassle when you are traveling.



I drive a semi-truck and am self-employed. I go just about anywhere except canada (which I could if I wanted to) or california. When I started doing this, my card got shut off on me 5 times in as many weeks. My company keeps track of it that well. They have learned my patterns and locations well enough that I have not had it shut-off on me since then.

If people are that ignorant (yes, I WILL use that word) and paranoid about WHAT is kept on them, you really should go online sometime and check out Family Tree Maker. And you can most likely thank the mormons for that creation too.


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## farmerj (Aug 20, 2011)

coolrunnin said:


> Your paying more in fees than I am with a bank issued card using the prepay. they dont issue them for free and charge to load them. My work card is no fee and paid off monthly no fees and no interest and I get points to use for fun or whatever.


That is why you only spend on it what it is you are able to pay off each month.


It's a tool that used properly can be extremely beneficial to people.


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## terri9630 (Mar 12, 2012)

farmerj said:


> I drive a semi-truck and am self-employed. I go just about anywhere except canada (which I could if I wanted to) or california. When I started doing this, my card got shut off on me 5 times in as many weeks. My company keeps track of it that well. They have learned my patterns and locations well enough that I have not had it shut-off on me since then.
> 
> If people are that ignorant (yes, I WILL use that word) and paranoid about WHAT is kept on them, you really should go online sometime and check out Family Tree Maker. And you can most likely thank the mormons for that creation too.


 Call me ignorant if you'd like, I don't care. I personally think your last sentence is ignorant. Blame the actions of a few on a whole group especially since you aren't even sure. 

I'm not worried about the card being shut off. Thats easily fixable and has happened before. I'm more concerned with theft and loss. It's no fun being stuck in a strange place while traveling only to find out someone else skimmed your card and emptied your account.


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## farmerj (Aug 20, 2011)

terri9630 said:


> Call me ignorant if you'd like, I don't care. I personally think your last sentence is ignorant. Blame the actions of a few on a whole group especially since you aren't even sure.
> 
> I'm not worried about the card being shut off. Thats easily fixable and has happened before. I'm more concerned with theft and loss. It's no fun being stuck in a strange place while traveling only to find out someone else skimmed your card and emptied your account.


Then you are not following where it was intended.

Namely there are people that think they can try and lay low in society and not have a record on themselves.

You do. Dad's work in familytree maker is showing us just how much of a mark every person leaves in society.

If you think you can beat that, THAT is the part that makes people ignorant.


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## Maura (Jun 6, 2004)

Getting off the issue of credit cards for just a moment...

What has happened?


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