Family member with home debt - is my 401k a way out?

I have a family member, an in-law, that lost their job for medical reasons. They own a home with low interest rate that has significantly appreciated since mid 2010’s. Unbeknownst to us, they stopped paying their mortgage for several months racking up 10’s of thousands of dollars in missed payments plus late fees. In addition, with no income, they took out a home equity line of credit to survive which has racked up an additional $100k in debt.

They need to sell the property to pay all of this off and not let the house go to foreclosure. Their living situation is stable now as they are no longer in the home living with other family. But apparently in order to sell it, they need to settle the late payments to make it current (as well as the HELOC); almost $200000 in total.

I have about $500000 in a 401k (in my mid 30’s). What issues would I run in to if I took out a loan in my 401k, paid my family member enough to cover their missed payments+late fees+HELOC balance, then had them list the property, sell it, and pay be back a few months later? We have verified through a trusted realtor there is a high probability the property would sell for enough to pay off their debts, with room to spare.

Any advice would be appreciated!