Image via WikipediaThe show has helped over 140 American families by building a brand new home for them. These homes are completely furnished. So how can such a good gesture turn into a nightmare for so many families? We have four families that ran into trouble financially.
Eric Herbert of Sandpoint, Idaho.
Mr. Herbert, a bachelor, took custody of his sister's two children after she died from cancer.
As of February 2009 he owed the bank $396,145. He had tried to sell the house in 2008. It was listed for $529,000. In 2009 the asking price was only $449,000. A notice of default was filed on January 2009 and the foreclosure was completed in October 2009.
Victor Marrero of New Jersey.
Mr. Marrero is a single father of five sons. He has serious heart problems and has suffered several heart attacks. In spite of his health problems he has managed to keep his family together. In a neighborhood that is plagued with gangs, none of the Marrero kids are gang members.
However the family is strapped for cash. Mr. Marrero is on a disability pension of about $1,000 a month but this is not enough to meet his financial obligations. So when Extreme Makeover offered a house, it was like winning the lottery. The situation turned sour when the family moved into the house. The gas bill soared to $700 a month, the electric bill was around $1,200, and property taxes were about $12,000 a year. These expenses floored the family.
In addition, companies that were owed money years ago, saw the Marreros' good fortune and wanted their money. The bills were from the heart attacks that Mr. Morreno had suffered in the past, as far back as 1994. They hounded him for money. In May 2008 he listed the house for sale at $500,000. But the next day he took the house off the market. The house was too expensive for that particular neighborhood. Eventually the house was sold to Urban Promise Ministries for $275,000. The market value was $449,000.
Milton and Patricia Harper of Atlanta.
The biggest winners in this "house lottery" were the Harpers. Not only were they given a house worth $450,000, they received a college fund for each of their children. And the cherry, the property taxes on the house were paid for 25 years.
So how can anyone with a brain lose on a deal like this. Mr. Harper decided that he wanted to be in construction. He had no experience, but he went ahead and started a construction company. For start up funds he took out a loan of $450,000 using the house as collateral.
The housing market is still in a downturn. Mr. Harper overlooked this fact. The business didn't fare well. After two foreclosure reprieves, Mr. Harper filed for bankruptcy in 2010.
Brian and Michelle Hassall of Kentucky.
The Hassalls received a house valued at $349,900 in 2006. They both suffered from health problems. Brian, a police officer was shot while on duty and the injury has left him with severe migraines. Michelle, a teacher, has cancer and also has a rare blood disease. One of their two children is a special needs child. Three years after they moved in the Hassalls decided to sell the house. They had a mortgage balance of about $100,000 and the high cost of maintaining a 3,298 square feet mansion, sitting on five acres, was too much stress on the family.
I like the show. I watch it with my wife occasionally. However the TV company has an obligation to the community, to the hundreds of volunteers and to the homeowners to provide a house that the family can afford. What's the point in giving someone a house that they will keep for three or four years? Sure, the TV rating are good, but is tis the goal of the show? This appears to be the case.
The TV show should interview the families to determine if the proposed house is affordable. A housing costs formula should be used. They should take 30% of the family's gross income. If the expenses can fit into this figure, then go ahead and complete the deal.
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