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December 16th, 2009

Update1: Extreme Makeover: Foreclosed-Home Edition

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UPDATE1: Extreme Home Makeover strikes again! According to the Wall Street Journal, another home made over by the popular television series, is nearing default:

Yet another “Extreme Makeover” recipient is in trouble, this one in Encinitas, Calif. Brian Wofford, a widowed father of eight, faces foreclosure five years after his home was transformed for the popular television show, the San Diego Union-Tribune reports.

Back in 2004, the Wofford home – purchased in 1989 for $186,700 – was expanded from 1,212 square feet to 4,337 square feet replete with a gym and hot tub. But, Mr. Wofford now owes $770,000 on the house, including $140,000 in home-equity loans, the paper reports. A local television station, meanwhile, says the family refinanced twice “after getting the home from the show.”

Trouble apparently started after the property was reassessed, leading to higher property taxes. The economic downturn, meanwhile, ate into Mr. Wofford’s chiropractic practice. He has reportedly tried to modify his loan for two years without luck – a problem many troubled homeowners face – so payments were halted this year.

Our conclusion to the original post (below) is still fitting: “Obviously ABC never intended for these homes to become a burden. Yet, ironically or not, the lavish “Extreme” remodels represent the kind of problems that got the country into this housing crisis in the first place.”

Original post published on 6/13/09: It has been going on for years. ABC’s Extreme Makeover: Home Edition has sought out families struggling both personally and financially and has rebuilt their home to better suit their needs. Unfortunately for several recipients, what has started out as a noble and deserving gift has turned into a nightmare. Another “Makeover” home has entered into foreclosure.

Each “Makeover” house that has entered into foreclosure, and there have been several, seems to follow the same pattern. The revamped homes get bigger, a lot bigger, and they’re usually filled with amenities that the homeowners weren’t used to accounting for before the remodel.

Bigger homes equal bigger bills. The heating and cooling bills rise, electric bills escalate, and sometimes so do property taxes. A “Makeover” home in Florida had a $29,000 lien placed against it because of numerous code violations.

This charitable formula seems to be broken. As we mentioned earlier, what starts out as a gift, is quickly turning into a financial burden. We sincerely hope that ABC re-examines the show’s purpose and chooses to provide these homeowners with a practical new home — not one that serves to make their situation even worse.

Obviously ABC never intended for these homes to become a burden. Yet, ironically or not, the lavish “Extreme” remodels represent the kind of problems that got the country into this housing crisis in the first place.

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6 Responses to “Update1: Extreme Makeover: Foreclosed-Home Edition”

  1. Chris Says: June 13th, 2009 at 12:00 pm

    Doesn’t the initial “gift” cost the recipients in taxes? Isn’t the fair market value of the new house and contents taxed as income to the homeowners just like a lottery winner or a game show contestant?

  2. Camila Says: June 13th, 2009 at 7:12 pm

    I have always believe that the home where over done and to much luxurious and that meant to much to keep up with, for some of this homeowners. I believe that the show has good intention put they must keep it real and down to earth… Every thing is going up and and the producer of this show must understand the financial situation everyone has… Please remember small and less expensive is always better… We all need to live with in our means”.
    I still believe this is a great program and I have saw the show since it started. I would love for the show to continue and I would to see less luxurious home and more simple and less costly homes that are meant for rich people….
    Thank you,
    Camila

  3. Tim Manni Says: June 15th, 2009 at 10:29 am

    Chris,

    Off the top of my head I can’t say for sure. Some of the articles stated that their property taxes shot up after the renovation. I’m just not sure if the remodel constitutes as a “gift.”

    I’ll look into your question some more and get back to you.

    Thanks for commenting,
    Tim

  4. Tim Manni Says: June 15th, 2009 at 10:42 am

    Camila,

    You’ve said it all perfectly. You make logical and intelligent points. Luxury isn’t a cure for the problems presented on the show. Granted the homes are usually designed to help with the family’s issues, but strapping these families with higher bills isn’t helping them at all.

    I agree — the intentions are good, but the end result isn’t always. Thanks for commenting,
    Tim

  5. Mary Says: April 7th, 2010 at 9:31 pm

    The children’s bedrooms are another ill-thought out feature of the homes. While over-the-top decorating them for the child’s present interest may seem delightful, in a few years when the child has outgrown that phase and the family does not have the means to redecorate, it will not seem so delightful. Tasteful, practical decorating would be much more in order–something that a child could live with at age 7 and age 17.

  6. Tim Manni Says: April 8th, 2010 at 10:18 am

    Mary,

    Ha, I couldn’t agree more. Just think of how quickly kids change their mind on things…

    Thanks for commenting,
    Tim

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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