If you’ve heard about this you knew it was coming.First a brief introduction to Extreme Makeover: Home Edition.  The concept is simple.  A struggling family with a torn up house gets a new one.  Not only is it new, but its the best of the best and they don’t pay for a dime.  ABC picks up the tab along with the 200 product placements and in-show ads they do.  Its a great deal for everyone actually.

Its like a needle in a haystack chances of getting picked for a new house.  Thousands of families submit themselves or are nominated.  Often times the family suffers but still makes great contributions to their own community, at their personal expense.  The stories would bring some of the more emotional of those among us to tears.

Well not only are they award a wonderful home, but they’ll even pay off the existing mortgage.  For our friends featured today, they paid off the mortgage, collected enough money for property taxes for a couple of decades, gather still more funds for home maintenance, and still had enough left over to give all the children scholarships.  Truly a life-changing event for anyone.  It certainly was for Patricia and Milton Harper.

The credit melt-down shouldn’t have affected someone with no payments.  Unless of course you have payments.  As is expected when you throw a ton of money at someone who has never had it, they don’t know what to do with it.  The next step is all the greedy bankers that immediately come after you.  I should know, I work with them.

So of course some commission chasing banker from JP Morgan was the lucky guy/girl/worm to get the banking relationship and exploit their wildest dreams.  I can imagine the conversation going something like:

Banker:  So what have you always wanted to do if you ever came into some money?

Harpers:  We always wanted to start a business, but we don’t really have money, just a house.

Banker:  Oh that’s no problem, we can actually loan you money using your house as collateral.

And that’s exactly what they did.  I couldn’t confirm what the Harper’s used their money for, but what else are you going to do with $450,000.  The banker got his fat commission and JP Morgan got a big loan at probably an outrageous rate (this was 2005 mind you, good times for real estate).  The Harper’s get screwed.

So whatever they used the money for was a waste, and now the house is being foreclosed.  Surprise, Surprise, Surprise!  ABC’s official stance is they recommend their recipients of houses to seek sound financial advice to help them deal with their new status, but of course most people don’t know where to go.  I think it would have been a good idea to throw in a financial planner for a couple years of additional help, but no one has to make ABC do that.

Alright, so who gets the Weaky?  The Harpers of course.  JP Morgan was just doing what they do, and the banker has the same excuse.  There is no excuse for putting up a GIFT as collateral to borrow money.  If you put up you HOME, where you raise your family, as collateral just to start a business then you are a failure as a parent.  This is absolutely tragic, I just hope those scholarships were put into separate trusts, because otherwise those parents would have raided those funds to make their payments.  They let the community down, that helped construct that house.  It was a gift from the community and ABC.  Despicable and pathetic, they truly did not deserve the house.

I’ll end with a quote from the Mayor of Lake City, GA where the house was, who helped work on the house:

“It’s aggravating,” said (Mayor Willie) Oswalt. “It just makes you mad. You do that much work, and they just squander it.”

Access Atlanta Via LA Times Blog

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