Helping family with undervalued house isn't good idea for friends

DEAR BRUCE: Some family friends bought a house several years ago, when the housing market balloon was about to pop. Needless to say, they way overpaid for the house. They were able to pay for a couple of years, then, unfortunately, one of them lost their job. Now they are in dire straits and may lose their house.

Because we have a great pension and a lot saved, we are thinking of helping them out. I would hate to see them lose their house. Would it be wise to help the family make their house payments in hopes that they can find work? If they are unable to find jobs equivalent to what they were paid, might the house be refinanced at a later date at a lower rate of interest? — Trying to Help, via email

DEAR TRYING TO HELP: While I commend you for considering such a generous offer, if my suppositions are correct, it probably would not be a smart move.

If the family purchased the house a few years ago at the height of the market and now that market has softened, essentially they have no equity in the home, and little prospect of having equity for a long time. If you choose to help them, you would have to go in with the idea of never seeing the money again. If you are OK with that, I applaud you.

I would not continue to pay the mortgage on a house that is undervalued and has little chance of recovery for a considerable time. A voluntary repossession would likely be in your friends' best interest. Helping them get into a rental property would be very generous.

DEAR BRUCE: I need to make a change in my will. Instead of going to my attorney for this simple change, can I just make it myself, get the change notarized and leave it at that? — T.V., via email

DEAR T.V.: Very simple reply: Never monkey with a will. Never, never, never write in the margins or try to add a codicil of your own. If you make any change, notarized or otherwise, you are likely to invalidate the entire document.

You would never know if what you did was right or not because, unfortunately, these things don't come to light until after your demise. And at that point, you no longer can speak to your intentions.

If you wish to make a change, see the attorney who drew up the will or, if he or she is no longer in the picture, find another attorney. It might be easier to redraft the entire document. That is up to the attorney.

Send questions to or to Smart Money, P.O. Box 7150, Hudson, FL 34674. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.

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