I don't think we can do everything for someone; you lent the money AND they had an opportunity to learn the principal of sowing and reaping (by his continuing to not work and spend money recklessly) when they lost the house anyway. Taking them in right away would not have given that opportunity, that moment to think about one's actions. Especially if you had taken them in, after having already bailed them out; they would have seen you as a safety net, perhaps always there.