Dorothy and Roy want to Subdivide

I got a call yesterday from my BIL Roy. He has approached a bank about a loan and is having them look at subdividing out a couple acres of land from the familiy farm. They currently have their mobile home on the land and have been living there for 15 years or so.

My biggest concern with Roy’s plan is that he stands a good chance of not being able to meet the loan payments. He is trying to borrow $55,900. Approximately $22K is to pay off the house. The rest will be used to pay off credit cards and do some window/ roof repairs on the house. He will still have payments on both cars and the Harley.

He mentioned to me that the money owed on the house contains some "penalties". I think this means that he is behind on the payments again. We bailed them out with $7K several years ago so I can’t imagine them owing this much unless they got behind again.

This means that they have a negative net worth. The bank is only willing to loan them money against some collateral. They have none except for their share in the land.They have been gradually getting deeper into debt and they see the way out as borrowing against the land.

Roy is the type of person who can’t manage money. He spends impulsively and it drives my sister crazy. This has been a major source of conflict in their marriage. If he is allowed to go ahead with this plan then it will probably just result in him going on another spending spree. The last time I was there they had catalogs for campers around the house.

Well, I sent an email to my youngest brother, Scott, who is just being deployed to Kuwait. I told him that was opposed to the plan. He agreed with me. I need to have some follow up discussions with my oldest brothers and also with my sister.

More to follow.