extreme makeover house in foreclosure

[emmababy]

I think the $450K was a loan they took out AGAINST the house to start a business. The house was the collatoral for the loan. So, the house was worth at least that and they gambled it and lost.

I realize that, but they would have to had qualify somehow. So taxes and insurance costs are not what did these people in. Getting greedy and taking out a loan they couldn't afford is what did it.

 

[2poohbears]

I realize that, but they would have to had qualify somehow. So taxes and insurance costs are not what did these people in. Getting greedy and taking out a loan they couldn't afford is what did it.

Yes, on THIS particular house - they took out a business loan against their house. Not a smart move.

But, on other homes, there were families who ended up selling the homes because they could not afford the increased property taxes, insurance, electricity, etc. At least the others seemed to realize there was a problem, and put the house for sale instead of allowing the bills to just pile up and create more problems. Sometimes, I think people see the big beautiful house, and don't think about the other expenses that go along with it. The houses they build on that show certainly are dreamy!

 

[leagirl12]

But, on other homes, there were families who ended up selling the homes because they could not afford the increased property taxes, insurance, electricity, etc. At least the others seemed to realize there was a problem, and put the house for sale instead of allowing the bills to just pile up and create more problems. Sometimes, I think people see the big beautiful house, and don't think about the other expenses that go along with it. The houses they build on that show certainly are dreamy!

But aren't the people still better off than they were...if they sell the EM home and use the money from that to buy a smaller home that they can afford then they are still doing better than if they had stayed in the situation they were in before EM came along.

Without EM they would have been stuck in a house that was falling apart with no hopes of every selling it and getting a better place.....JMO.

 

[jmillan]

I think the show would be more helpful to people if they didn't go so overboard, and really looked at the entire situation, then fit the home to the family's realistic needs/ability to keep up with. That might not get great ratings, though.

It sounds like this particular family made a huge mistake.

LOTS of Americans are not educated enough about dealing with their finances. Schools have taught very little in the way of investing, saving, loans, retirement plans, insurance, etc. It's sad. And, we have to start realizing individually that we must live within our means---sometimes that means you cannot afford a brand new car, or the best house in the neighborhood, etc... It's one of the reasons we are in the financial mess we are in right now in this country.

I agree with you 100%

 

[Del]

I read that all families are encouraged or offered to meet with a financial advisor so that they don't run into problems in the future. Also, wouldn't it be hard to sell in a neighborhood that doesn't look like the house next door because EM made a mansion next to a small home?
Del

 

[mpls_mm]

As someone who has worked and donated materials for one of the houses, I can tell you the house is paid off and all liens satisfied. There is an escrow set up to help with utilities, taxes, insurance etc for the next few years. They are completely covered. The next thing is that they pride themselves on building energy efficient homes with the best of everything. They may have more footage but with the insulation, windows, new appliances etc, I was told many people find their bills go down, not up. The other thing is that many local businesses want their piece of the marketing pie when EHM comes to town and they team up with local media to ride that marketing horse. Remember, no one knows what scholarships or additional help they will get on camera so many efforts are duplicated. On the show we worked on, the woman got new vehicles, scholarships etc. The local news show showed a local ford dealership giving her a new truck and her teenager a new car, other businesses got together to give her an additional 50k on top of what EMH gave her. She was doing all kinds of appearances, each one would show the EMH footage and then someone would giver her one more thing and then another show would do something else, the local college gave this scholarship, everyone wanted their 15 minutes out of her. She happened to have a business so I am sure she got lots of mileage out of that too. I don't feel that they are taken advantage of at all. As a matter of fact this lady knew what she was supposed to get and demanded more from every person that donated, do I feel sorry for her having a big power bill that was paid and an extra tax bill 5 years from now? The show helps the local economy and stimulates the local economy, but don't feel bad for these people. A lot goes on off camera.

 

[Not so Dumbo]

So even if the homeowners couldn't afford the new bills, and had to sell the $450,000 mansion, they may not get $450,000 for it b/c it's in the "wrong" neighborhood, but surely they could get $300,000 for it and then they would be $300,000 richer than they were before EM moved into town. I don't see where EM has done any harm.

The people in the article though, IMHO, made a very foolish mistake. I'll stop short of saying "they got what they deserved" but part of being an adult is being responsible and obviously they weren't.

 

[srwarden1928]

They may have had to take out the mortgage. The winners have to pay federal income tax on the value of what they receive from the show. In many states they have to pay state income tax as well. No wonder they have to take out a mortgage on it.

 

[gaelic grace]

A friend of mine worked on a house that was built in Jackson, MS and they echoed what some of the others have said. Alot of money was put in savings for the family. The loan was paid off and a substantial sum was given that more than covered any tax liability. Even though upkeep expenses were going to be more if the mortgage amount they were paying was applied to those costs the families should be OK. I agree with alot of others that in theory it would be nice if instead of doing an "extreme makeover" on one family they spread the wealth and helped four families with a regular makeover but it is a tv show, it's for entertainment and for a network to ulimately make money.

At least in this shows case it does something to improve someones life which is more than we can say for some shows. It's unfortunate that everyone doesn't live happily ever after but it does seem that at least in some cases poor decision making or maybe even bad luck has taken it's toll. I don't think we can lay that at the feet of EH.