WSJ – Two for One: Foreclosed Townhome Mistakenly Sold Twice

Two home buyers and an investor both say they fairly purchased a foreclosed townhome. Now they’re fighting to see who gets to stay.

This saga starts back in March, when Douglas Garhartt and Brandon Lively closed on an ocean-view unit in San Clemente, Calif. It was a great deal: three-bedrooms for $365,000, well below the $712,552 owed on the loan, according to the Orange County Register in California.

Less than a week later, Saint John Trust, an investment group, purchased the home for $346,896 at a foreclosure auction. The same bank–OneWest–was involved in both deals. Both parties have deeds, which has forced the situation into the courts.

As the foreclosure crisis drags on – one in every 381 U.S. housing units received a foreclosure filing in August, according to RealtyTrac – mistakes are inevitable. Angela Iannelli had to rescue her beloved parrot after her home was padlocked and her utilities cut.

Mr. Garhartt told the paper he first learned of the auction the day it happened, when a neighbor said someone had come by to the change the locks.

“We’re in probably the most difficult spot,” Scott Haushalter, a principal with Saint John Trust, is quoted as saying. “We bought this property and found out it was sold, which we had no idea, and now we don’t have our property and we don’t have our money. We’re in a no man’s land.”

No one has stepped forward to take the blame.

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