Extreme Makeover House Faces Foreclosure

More than 1,800 people showed up to help ABC’s “Extreme Makeover” team demolish a family’s decrepit home and replace it with a sparkling, four-bedroom mini-mansion in 2005.

Three years later, the reality TV show’s most ambitious project at the time has become the latest victim of the foreclosure crisis.

After the Harper family used the two-story home as collateral for a $450,000 loan, it’s set to go to auction on the steps of the Clayton County Courthouse Aug. 5. The couple did not return phone calls Monday, but told WSB-TV they received the loan for a construction business that failed.

The house was built in January 2005, after Atlanta-based Beazer Homes USA and ABC’s “Extreme Makeover” demolished their old home and its faulty septic system. Within six days, construction crews and hoards of volunteers had completed work on the largest home that the television program had yet built.

The finished product was a four-bedroom house with decorative rock walls and a three-car garage that towered over ranch and split-level homes in their Clayton County neighborhood. The home’s door opened into a lobby that featured four fireplaces, a solarium, a music room and a plush new office.

Materials and labor were donated for the home, which would have cost about $450,000 to build. Beazer Homes’ employees and company partners also raised $250,000 in contributions for the family, including scholarships for the couple’s three children and a home maintenance fund.

ABC said in a statement that it advises each family to consult a financial planner after they get their new home. “Ultimately, financial matters are personal, and we work to respect the privacy of the families,” the network said.

Some of the volunteers who helped build the home were less than thrilled about the family’s financial decisions.

“It’s aggravating. It just makes you mad. You do that much work, and they just squander it,” Lake City Mayor Willie Oswalt, who helped vault a massive beam into place in the Harper’s living room, told The Atlanta Journal-Constitution.

0 responses to “Extreme Makeover House Faces Foreclosure”

  1. That’s embarrassing.. man.. nice house too…

    Who advised them on the business deal? Almost a half mill is a pretty penny for a start up..

    Sis. Kia

  2. The house was paid for but the family went to the bank to get a loan and used the house as collateral. I understand the need to start a buisness but why CONSTRUCTION in this market? Now the buisness is defunked and they are about to be homeless.

  3. This story is incredible. I think they have their hand out again to milk the system. If you were give an free home and a large sum of money, why did you need a loan. I guess they need to live in a low income housing apartment. This family does not know how to manage a home nor money. Why would the TV show build such an expensive home for people who doesn’t know the value of a dollar.

  4. Firstly, how is it that a bank can give them that type of cash for the alledge value of the joint without any advisement recognizing their previous situation. Second, do they know what financial planning is? and who helped them or are they just stupid !

    I hope their kids graduate and learn the error of their parents in such a way that they buy that house back. Its just plain dumb and makes “uneducated” black people look foolhearty! (I wont say our people cause that was clearly a personal choice and most, I hope, got more sense than this). Yes, they need a low income apartment for sure !

    Construction – I doubt it, call it consumerism and all that TV shit goin’ to their head.

  5. This story is sad and tells us how important financial literacy is… as blacks there are more of us that consume/spend like crazy then those that are disciplined to save…This is a CLASSIC example of eyes too wide…since the couple did not WORK and buy this big house with their own money the fact that almost a mill was invested in their family was lost in space/they most likely appreciated it but had NO CLUE how to handle it… it sounds like they had NO house payment… just taxes and upkeep but they were not used to having anything with that much value and got caught up in all the hype surrounding the housing boom .. They most likely found out how much the house was worth and went NUTS thinking they could start a business with the home equity. We have a GANG of people in America who have done that, every state in the usa have FORECLOSURE HELL.this family was foolish to say the least having no real clue on how to turn the biz into a multi million dollar investment to finance the house and all that they wanted to do.. we as black often were not taught money management and even though there are tons of tv shows, books, magazines, seminars, internet websites etc, SOMEHOW we still miss out, WE over consume everything, many of the capitalists in America KNOW we are their path to riches…but not because they respect us and want to do business with us… noooo they DONT respect us and think WE ARE DUMMIES AND MAN O MAN WE RARELY DISAPPOINT THEM…this family from the hood into a beverly hills type house with no mortgage to pay is a perfect example… but there are several more examples… we all know that song “Pass the courvoisier” from Busta Rhymes.. How many of us know that is was FRONT PAGE on the wall st journal saying how the makers of courvoiser were nearly bankrupt, their 100+ yr biz was failing, people were NOT buying their product on a large scale any more, then some marketing campaign that THEY THEMSELVES RESISTED when they heard it would be marketed to blacks…was presented to them.. They used the words urban youth..or something in the article but a room full for all white uppity, what do you think they called us? so they were presented with this last ditch marketing strategy, one that the founders who were long dead would not have done no matter what the outcome, one who the current makers resisted the whole way up until the result was more revenue from this ONE ploy then the HISTORY of the beverage.. let me repeat, AFTER BUSTA’S SONG, THE COMPANY MADE MORE MONEY IN LIKE A 3 YEAR PERIOD AND THEREAFTER THEN ALL THE YEARS COMBINED IN THE HISTORY OF THE COMPANY…did i mention they hated marketing to us when it was 1st presented…
    take another time with the Koreans and hair care in America ..same concept, a race that really has little respect and value for us, gets wealthy off of us… lets not even get into the other types of restaurants they have in our neighborhoods. just focusing on the hair care part they dominant in almost every state and every hood… sometimes there are multiple stores within a block or few blocks radius.. that make millions off of us, the Koreans admit they cannot get these same results in white neighborhoods, whites dont buy fake hair and other products at the volumes we do…

    Lets please remember the end of the Spike Lee JOINT..school dazes WAAAAAKE UUUUUUP!!!!

  6. “Jessica wrote: Why would the TV show build such an expensive home for people who doesn’t know the value of a dollar.”

    To answer this question all we have to do is look at the media, watch the evening news for 30 days, write down the race of people who most often is reported as having committed a crime… They are black or hispanic mostly( though not always), are we suppose to believe whites and all the other races commit no crimes? ITS NEWSWORTHY when we do something dumb…it must be broadcast….This was an experiment the lab rats were this couple and their family, the study area was the gigantic house that they didnt have to pay for . There’s NO DOUBT in my mind if a trailer park couple or any other race you pick with the same poverty hardships these people have were put in the same scenario THEY TOO would have failed miserably… its just more “entertaining with blacks”… according to white America…VH1 made more money off the Flava Flav show and its spinoffs then the other white shows combined.. The bachelor, the bachelorette, some white rockstars, i forget the names…. all these shows did well but cant touch the Flavor of LOVE and I Love New York shows in ratings and revenue. We are a joke to everyone else. They prove this by giving us the rope to hang ourselves on a regular basis

  7. They took out a loan against the house to try to get even more money!

    They still were not satisfied and, honestly, if I were in their shoes without financial knowledge then I wouldn’t be satisfied either. Think about it for a sec… if someone came along and took you from a shack to sugar, no matter how much money they also gave you to put away on the side to maintain the house, your LIFESTYLE will change!

    Now the pressure to live the lifestyle of people who WORKED to afford homes like that has taken over your life. You’re now getting enticed and tempted by relatives and friends who want to host parties at your house, people asking for loans, business “deals” are offered to make more money, and you are flat out “comfortable” because the common goal for parents has now been fulfilled: paying for your kids college education. At this point you are eager to take risks because you feel like you have nothing to lose.

    I hope for ABC’s sake that in future shows they start to pay for a financial planner to assist the people they are attempting to help. This is just more proof that being poor is mostly a mindstate.

  8. Was on Google reading other blogs about this and one person made a very good point in that they (The Harpers) didn’t take out the money to buy a yatch, they used it to start a business which is the American dream. Unfortunately, they either didn’t do enough research on the business, made poor decisions managing the business and/or obviously bit off a little more than they could chew, which a lot of us do…….hence not being able to afford to pay for our kids to go to college, buy a home, etc.

    Hopefully, they have some of that money left and are able to get back on their feet. When a person loses their home, it means they stopped making payments to the lender. In some cases, the people are not necessarily “broke”, but decide they don’t want to pay that high mortgage anymore or since the market has turned and homes may not be worth what they paid, they simply stop paying the mortgage and let the bank take it.

    I also read an article recently where people were buying less expensive homes while their credit was still good and then let their more expensive home go into foreclosure to get from under that high mortgage. So see there could be more to this story than meets the eye.

  9. Hey, are you guys delusional.. they are bloody silly.

    Diana and Kendrick – you guys need to review your thoughts a bit and check yourselves! I think they foolhearty out the box !

    Dont sugarcoat the dumbness, please! These people didnt have a mortgage and all they had to do was pay the taxes, water, basic all arounds – finished!

    Even if you dont know shit go get people to help you find out – thats rule one and it applies to 8th graders too!…..pick up a book, something, a black enterprise, what ?! Sure nice things we all like but there are enough examples of what not to do…. think “Hammer”!

    Construction?!? – what gimme a break even if the numbskull got a group of Mexicans in Clayton County to help’em cut lawns as a business- that would’ve been admirable and made him money.

    Let me tell you guys something, I live in Africa and even here people know better than that! Houses have been given away to super poor people on TV programs here and they continue to do their, little but honourable, job and KEEP THE HOUSE looking after it… and definitely not losing it by any stretch or overblown scheme.

    Let me tell you something else. The other day a buddy of mine was telling me over dinner about an Indian colleague that said something to him about coming to America and what they often plan to do. And yes, Im talking Indians, yeah India indians, he noted that they said when talking amongst themselves, they are clear in that in coming to America and their focus is to often setup a Quickee Marrt, etc, in a black neighborhood (to get started) and charge 200% or more on items (like Milk, Cookies – cause we love sugar, etc) to make money cause its the easiest target. In other words your typical “Bodega” is simply planning to rip you!

    Enough said – please extend your hands to educate our own and if they still dont listen than I dont wanna know what happens to them.

  10. I fault the lender too. This is predatory lending at its hightest. Rules of thumb for lending is that CASHFLOW repays the loan NOT collateral and not PROJECTED income. $450K for a start-up is outrageous, usless the borrower has a sizeable net worth that is somewhat liguid. Construction is one of the riskiest types of business, known for cost overruns and high failure rates. Yes, the family was trying to make something of their new found equity but they were very ill advised. The lender should have NEVER made the loan. If they couldn’t afford the upkept of the first house 3 yrs ago what changed significantly in the income that they can now afford a $450K loan??? My opinion is that the banker saw naive folks, and saw the house too and felt that if things got rough they can always sell the house. Very poor judgement for the family, and very greedy judgment for the lender. This, my friends, is why Countrywide, Indy Mac, Bear Stearns et al are all underwater taking the millions of homeowners with them. Greed!

  11. That was my first thought too… almost HALF A MILL? That is a lot for a start up? I was wondering if whoever advised them on the deal would suffer the same embarrassment?

    Sis. Kia

  12. Lenders will loan money to almost anyone who has collateral. I live in Los Angeles where a lot of people have tons of equity in their homes that they can pull out even if they’re not working. A person could be retired, disabled, self-employed, anything. Just because a person IS working doesn’t necessarily mean they’re going to pay their bills, that’s why so many people have bad credit, so we can’t make that assumption. We don’t know what they told the lender their means of backing back the loan would be, all we can do is speculate. Plus, the lender doesn’t make a profit when a home goes into foreclosure, THEY LOSE MONEY.

  13. Yes,precisely my point! Bankers lose all the time on collateral based loans when loan to value (LTV) is high, but most often in foreclosures they are able to recoup all (principal, interest and legal fees) if the the LTV is low.

    The premise remains that CASHFLOW pays the loan. However, we see that the brokers or lending officers really push a loan through because THEY get an immediate commission or they need to meet targets. In some instances CF was inflated, not by the borrowers but the lender in order to book a loan. In other instances, the lenders would tell borrowers, this is what you can afford! In a good market they relaxed standards because the demand was so high! They, in fact, were relying on speculation in housing values to repay the loan. This is why due diligence in underwriting is crucial! We see all the time how executives (in other industries) cut corners on critical maintenance, just so they can get targeted bonuses at end of the year. It is all greed. Everybody was trying to get paid in this housing market.

    On the LA housing market: If people are not working and can pull cash out of their houses is normally means that they have (or should have) other streams of income or more liquid assets(cash, annuities etc) that banks can rely on to pay the money back. If borrowerers do have the necessary income streams, they then look at credit history and character to ensure that the “promise to repary” has some validity. If banks are using just the equity in homes, this is highly irresponsible and against most prudent lending policies. We see the fruit of this imprudent lending practice, because housing values and overall RE demand have plummeted and lenders can’t sell collateral to pay back principal -thus the domino effect an the international credit crisis.

  14. Are there things we are not considering? Are we too quick to call OUR brothers and sisters fools? Have we asked questions before passing judgment? …when was the loan taken out and when did they begin the construction business? How well did the business do before the collapse of the housing market?

    From 2000 to very recently, the real estate/construction market was booming (especially in Atlanta) and warnings from “conservative” financial analysts were being drowned out by infomercials, TV shows like flip that house, spotlights in investment magazines, and here in Atlanta the highly publicized success of industries related to real estate, like the now hurting Home Depot and Lowes.

    Had the housing/construction market continued moving as it has been from 2005 to the end of 2007 would we be calling them fools or “very smart people”? Better yet, had the family been interviewed in 2006 or 2007 would we be “impressed” with their use of opportunity or would we still be calling them “uneducated stereo-typical ignorant greedy unappreciative black folk”?

    When people have very little, those with more contend that they should pull themselves up by their boot straps and make something of themselves. We all know that it takes money to make money, they thought they finally had bootstraps to pull themselves up by. They didn’t sit in the house, eat themselves to death, throw parties every night and “bling bling” themselves into foreclosure. Their business failed. If any of you have ever tried to start a business or have a small business you can understand that there is more to this story than “stupidity and foolishness.”

    Those who have not thrown themselves into Entrepreneurship may not understand that most small businesses WILL FAIL in the first 5 years. Any new business will have to ride out the highs and lows of their industry, sometimes only by the skin of their teeth, in order to be successful. Did they know this and just wanted to try anyway? I don’t know. Neither do the other readers. I’m not saying that they made the best decisions with their business or personal finances; I’m just saying that we need not be so mean and judgmental. I know people who were not necessarily educated or smart in the construction/real estate business here in Atlanta who were lucky enough to surround themselves with the right people and the right contracts to move their money around in, I also know of people (smart people) who are closing shop because they couldn’t move their money or contracts into the city where the market is actually still afloat because they didn’t have the right contacts.

    We need to be careful of what we say about OUR brothers and sisters. We need to be supportive and not try to prove how stupid the other guy is to show how smart we are

  15. Having so much information about the Harpers due to the TV show, just puts a face on a growing problem in America. What a shame, yes, but no less a shame for anyone facing foreclosure. Just last week I heard about a wife who took care of all of the family finances, committing suicide on the day the foreclosure was due to occur. She sent a note to the company doing the foreclosure warning of her emotional state.

    I am more interested at the moment in knowing who did the lending and why is it in foreclosure. My mother-in-law is surviving leukemia, with expensive chemo treatments that amounts to more than my mortgage payment per treatment given. She has to pay this cost out of pocket. She and her husband were very successful professionals and health issues for both is declining. She is faced with the realization that she is tilting over the tightrope between her life saving treatments and the outrageous mortgage payment she has accrued under some shady business practices of a well know mortgage company (now under the watchful eye of the District Attorney).

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