This would be insanity... FAR too much risk for the lender. There are so many problems with this, from a purely financial perspective, that there isn't enough space here to cover all of it.
When you add in the relationship factors, it's a terrible idea. This is a great idea for the borrower if he/she can find a family member gullible enough to go for it, but it's a disaster waiting to happen for the lender. A truly bad idea.
