Monday, July 28, 2008

The Mortgage Mess Hits a New Low

How low? One of the free houses ABC's Extreme Makeover: Home Edition gave away is being foreclosed on.

But maybe the government can bail them out, too!


Anonymous said...

This is not at all surprising. The problem with Extreme Makeover Home Edition is the tax implications (federal income tax, as well as state and local property taxes) of taking a shack and turning it into a mansion. ABC finds people in extreme need, which is the point of the show; however, once they leave these people with the mansion they cannot afford to maintain it.

That is the dark side of this show.

Anonymous said...

It would appear that you guys did not actually read the story. The house is being repossessed due to the fact that the homeowners borrowed $400k against it to start a construction business. The business failed. So, if you want to say that the slow down caused the construction business to fail, and there are facts to show that, maybe you have a point. The show actually set up a trust to pay for the taxes on the house.

Anonymous said...

Hey anon 1:55:

I did read this story and you are correct, they did borrow $450K on the house and they blew it; however, for many of these receipents of Extreme Home Makeover, they run into tax implications on a federal, state and local level. The tax prof blog has written a lot about it here:

Anonymous said...

#2's excellent point notwithstanding, I've talked to a number of homebuilders who are disgusted with EMHE for the reasons in #1's post. The families are literally being set up to fall.

- Brian Moore