Ok I'm just going to play Devil's Advocate, just to stir the pot a little.
Read the article carefully, or better yet, read some others that provide more details.
The problem here is not that they didn't pay the mortgage or just wasted all the money given to them. Rather, the original mortgage was actually paid already, and a fund setup to help covert he utilities etc. That isn't the problem.
What's happened is that they took a second mortgage, a loan, to get cash to cover a a business investment. Because they had the house as an asset, they coudl use it as backin gfor teh loan. Well, the investment didn't pan out - so now they're havin ga hard time paying back the loan taken. hadt he investment paid out as expected, that wouldn't happen and everything would be hunky-dory...
Hundred of thousands of people make risky investments every year, and many (most?) use their home for the collateral. This isn't any different. I know damn well a large number of people on this very board have their own businesses and have had to do similar things... and also a handful at least that have had them crash on them. That's the risk you take.
I say, props to them for taking advantage of the opportunity they had, and using the house to try and make things better for themselves. The folks in these situations have 2 choices: (1) - keep doing as they were before the Extreme Makeover ordeal, or (2) take the opportunity given them and make the most of it, and run with it.
Soudns to me like they took Door #2.
all I'm saying is, i'm not throwing stones until I see proof thatt he money was just plain wasted. If you want to criticise, fine - but keep in mind the logic follows for ANYBODY who has used theiir home for collateral for an investment.
Now, where I WOULD criticise 'em is for takeing such a HUGe risk on it - who knows what the market value of that place is, but I'd have at most kep the loan to about 1/4 of it (instead of close to max) just in case of dire results. That's just poor financial planning.
STIR POT, STIR