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Thread: Extreme Makeover Foreclosure

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  1. #1
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    Extreme Makeover Foreclosure

    http://news.yahoo.com/s/ap/20080728/...er_foreclosure

    Saw this in the news and was thinking about the issue of debt with the TV thread. I always wondered how effective Extreme Home Makeover was given that they take a family in need with little and build them a half million dollar home (in the same run down neighborhood). Apparently this family still had financial trouble after the new home (shocking) and now are probably in even worse shape after borrowing 450K against the home that was given them.

    There is much to be said about the virtues of earning it yourself as opposed to having it given to you. I think the scholarships and work-related training that this show sometimes gives are great but I have a feeling that the home makeover, while it looks great on TV, does not always end up being a blessing.

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    2009: Fail Ltlabner's Avatar
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    Re: Extreme Makeover Foreclosure

    Quote Originally Posted by joshnky View Post
    Apparently this family still had financial trouble after the new home (shocking) and now are probably in even worse shape after borrowing 450K against the home that was given them.
    This is why I advise anyone who asks to never borrow against their home for anything short of a life-threatening emergency (unless it's to fund a project to actually *add* value to the home).

    Borrowing against your home to pay off credit card debt is just a horrable idea. Not sure of the details of the family in question so I'm not really commenting about them specifically.

    But whether it's borrowing against your home to pay off debt, or borrowing against a home that was gifted to you, unless and until you change the underlying bad habits that got you into hotwater, you are only delaying the inevitable.
    a super volcano of ridonkulous suckitude.

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    Rally Onion! Chip R's Avatar
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    Re: Extreme Makeover Foreclosure

    Yeah, I read this. I can understand some of the bitterness people feel towards this family. They volunteered their effort and time to that house and the family ends up getting foreclosed on. But there were no preconditions on their volunteering. They did it because they wanted to help out. It doesn't make their help any less valid. They did a good thing and no matter what happens, they should be proud of themselves.

    As for the family, I don't know all the details but it seems to me that a responsible bank wouldn't loan someone with their financial history that kind of money. It'd be one thing if they used that loan to buy a bunch of crap they didn't need. They used it to start a construction company and if it worked, they could be self-sufficient and all that good stuff. It just didn't work out. It's sad but lots of start-up companies don't work out.
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    Joe Oliver love-child Blimpie's Avatar
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    Re: Extreme Makeover Foreclosure

    Quote Originally Posted by Chip R View Post
    Yeah, I read this. I can understand some of the bitterness people feel towards this family. They volunteered their effort and time to that house and the family ends up getting foreclosed on. But there were no preconditions on their volunteering. They did it because they wanted to help out. It doesn't make their help any less valid. They did a good thing and no matter what happens, they should be proud of themselves.
    Exactly...and the same goes for Sears and the manufacturing suppliers who donated items to the home.

    If there were any "conditions" issued by those companies, they probably all related to how their individual product logos or mentions of their companies would be staged throughout the television episode.

    In my opinion, the shows demonstrate a calculated risk by all parties concerned.
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    Rally Onion! Chip R's Avatar
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    Re: Extreme Makeover Foreclosure

    Quote Originally Posted by Blimpie View Post
    Exactly...and the same goes for Sears and the manufacturing suppliers who donated items to the home.

    If there were any "conditions" issued by those companies, they probably all related to how their individual product logos or mentions of their companies would be staged throughout the television episode.

    In my opinion, the shows demonstrate a calculated risk by all parties concerned.

    Exactly. I was mainly referring to the folks who volunteered to help build the new house.

    Of course these companies didn't do this out of the goodness of their hearts. Maybe it was a bit of a feel-good moment for them but they were paying for advertising their products. It's over and done with and there's not a thing they can do about it.
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    Re: Extreme Makeover Foreclosure

    I read somewhere that EMHO has an "after-care" department, just to make sure that the new house doesn't leave the family worse off than it was before, what with increased property taxes, utility bills, maintenance etc. But there's not much they can do about something like that.

    I saw the builder had raised money for scholarships for the kids. Hope that money was in something the parents couldn't raid.
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    Harry Chiti Fan registerthis's Avatar
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    Re: Extreme Makeover Foreclosure

    "As for the family, I don't know all the details but it seems to me that a responsible bank wouldn't loan someone with their financial history that kind of money."

    Ding-ding-ding.

    Which does not in any way remove the "personal responsibility" that one has over his or her own financial affairs. If you can't be bothered to budget appropriately and educate yourself on the potential ramifications and consequences of your decision(s), then certainly you bear a significant portion of responsibility for what may come. In most circumstances, that is.

    But these banks that doled out loans for individuals that were so out of proportion to said individual's financial status as to be laughable shoulder a significant portion of the burden as well. Case in point: a few years back, when the real estate industry was a bloated gold mine, I briefly considered buying a condo out here in DC and got pre-qualified for a mortgage. The amount I was pre-qualified for was mind-boggling, and I thought the loan officer surely must have been pulling my leg.

    Fortunately, my better judgment prevailed and I elected not to pursue anything at that time. It's downright frightening to think of the dire straits my personal finances would be in had I elected to purchase a property for the amount I had been pre-qualified for. Lot's of dinners of Kraft Mac'n Cheese and Ramen noodles would be my guess...
    We'll burn that bridge when we get to it.

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    2009: Fail Ltlabner's Avatar
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    Re: Extreme Makeover Foreclosure

    Quote Originally Posted by registerthis View Post
    Which does not in any way remove the "personal responsibility" that one has over his or her own financial affairs.

    But these banks that doled out loans for individuals that were so out of proportion to said individual's financial status as to be laughable shoulder a significant portion of the burden as well.
    I couldn't agree more.

    It's pretty obvious I'm big on personal responsibility when it comes to finances, but the current "mortgage crisis" (hate that term) is equal parts people taking out dumb loans and banks making dumb loans.

    As far as I'm concerned if you took out a loan you knew (or should have known) you couldn't afford I don't have much pitty when the sherrif is escorting you off the property. However, if you made a bunch of loans you knew the borrowers likely couldn't afford I don't have any pitty when the corporate earnings take a body blow. You make bad business decisions, you pay the price somewhere down the road.
    a super volcano of ridonkulous suckitude.

    I simply don't have access to a "cares about RBI" place in my psyche. There is a "mildly curious about OBI%" alcove just before the acid filled lake guarded by robot snipers with lasers which leads to the "cares about RBI" antechamber though. - Nate

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    Rally Onion! Chip R's Avatar
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    Re: Extreme Makeover Foreclosure

    Quote Originally Posted by registerthis View Post
    "As for the family, I don't know all the details but it seems to me that a responsible bank wouldn't loan someone with their financial history that kind of money."

    Ding-ding-ding.

    Which does not in any way remove the "personal responsibility" that one has over his or her own financial affairs. If you can't be bothered to budget appropriately and educate yourself on the potential ramifications and consequences of your decision(s), then certainly you bear a significant portion of responsibility for what may come. In most circumstances, that is.

    Oh, absolutely. Just because a bank is stupid enough to loan you money doesn't mean you have to spend it like a drunken sailor on shore leave.

    I don't watch the show so I have no idea what this family is like but it seems to me that their intentions were honorable. They were trying to start a business and (hopefully) not trying to bilk anyone. In hindsight, perhaps what they should have done is sell the house and move into something worth about half of what their new house was worth. Although, I'm sure that the folks who run the show wouldn't have appreciated that too much.
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  10. #10
    My clutch is broken RichRed's Avatar
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    Re: Extreme Makeover Foreclosure

    Quote Originally Posted by registerthis View Post
    Case in point: a few years back, when the real estate industry was a bloated gold mine, I briefly considered buying a condo out here in DC and got pre-qualified for a mortgage. The amount I was pre-qualified for was mind-boggling, and I thought the loan officer surely must have been pulling my leg.

    Fortunately, my better judgment prevailed and I elected not to pursue anything at that time. It's downright frightening to think of the dire straits my personal finances would be in had I elected to purchase a property for the amount I had been pre-qualified for. Lot's of dinners of Kraft Mac'n Cheese and Ramen noodles would be my guess...
    When my wife and I were in the process of getting the loan for the house we bought, we were told we could've probably qualified for twice the purchase price of the house if we wanted to. We just looked at each other and shook our heads. We budgeted to within an inch of our lives so we knew exactly what we could comfortably afford and it sure as hell wasn't twice as much as what we paid for that house.

    I think people thought that qualifying for a certain figure meant they could automatically afford that amount without actually doing the calculations on it for themselves. Foolish on their part and irresponsible on the banks' part.
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    Re: Extreme Makeover Foreclosure

    Quote Originally Posted by RichRed View Post
    I think people thought that qualifying for a certain figure meant they could automatically afford that amount without actually doing the calculations on it for themselves. Foolish on their part and irresponsible on the banks' part.
    Sure. But if you believed that the rise in home prices, circa 2004-2007, was sustainable, then taking out a big loan for a big house isn't so stupid. Stupid is buying into the hype. And most people did.

    I've got friends, intelligent people, who gave me all kinds of reasons why buying an overpriced house in those years was a good move, "Bay Area real estate is always a good investment", "a house is always going to be worth something" and the classic, "they're not making any more land".

    How's that looking?
    The widow is gathering nettles for her children's dinner; a perfumed seigneur, delicately lounging in the Oeil de Boeuf, hath an alchemy whereby he will extract the third nettle and call it rent. ~ Carlyle

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    Harry Chiti Fan registerthis's Avatar
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    Re: Extreme Makeover Foreclosure

    Quote Originally Posted by Rojo View Post
    How's that looking?
    Not good.
    We'll burn that bridge when we get to it.

  13. #13
    My clutch is broken RichRed's Avatar
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    Re: Extreme Makeover Foreclosure

    Quote Originally Posted by Rojo View Post
    Sure. But if you believed that the rise in home prices, circa 2004-2007, was sustainable, then taking out a big loan for a big house isn't so stupid. Stupid is buying into the hype. And most people did.

    I've got friends, intelligent people, who gave me all kinds of reasons why buying an overpriced house in those years was a good move, "Bay Area real estate is always a good investment", "a house is always going to be worth something" and the classic, "they're not making any more land".

    How's that looking?
    Don't forget, "Buy now or be priced out forever!"
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    Churlish Johnny Footstool's Avatar
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    Re: Extreme Makeover Foreclosure

    A $450K house, plus $250K in the form of scholarships, a home maintenance fund, etc.

    That's a lot of money wasted.
    "I prefer books and movies where the conflict isn't of the extreme cannibal apocalypse variety I guess." Redsfaithful

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    Rally Onion! Chip R's Avatar
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    Re: Extreme Makeover Foreclosure

    Quote Originally Posted by Johnny Footstool View Post
    A $450K house, plus $250K in the form of scholarships, a home maintenance fund, etc.

    That's a lot of money wasted.

    Pocket change for the Mouse.
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