House Deal Turns Sour

TEHACHAPI, Calif. -- While the economy is in a slump and the housing market is continuing to collapse, many families are facing foreclosure.

The Russos' story is like those of many others facing foreclosure.

It was the first house they bought, and they chose an adjustable rate mortgage. Everything was fine until the rate was adjusted and their mortgage nearly doubled.

They were unable to make their monthly payments and had to decide whether to walk away from their home or do a short sale.

They opted for a short sale and chose to enlist the help of Cliff Johnson, a real estate investor out of Bakersfield, instead of a licensed real estate agent.

Carrie Russo said, “I didn’t want to show the house, so I thought wow, that’d be great if he could just find an investor to sell it to, that’d be perfect. But that wasn’t the case. It was far from it.”

The next few months, the Russos questioned their decision to work with Johnson.

The family first became wary when Johnson asked them to sign over the grant deed to their house to him.

“We didn’t do that because that would put his name on the title of our house, but we would still be responsible for the loan,” Russo said.

According to the family, Johnson promised them plenty of time to move out, but on Oct. 27 he told them their foreclosure date was Nov. 25, giving them less than a month.

“We waited for paperwork to come in the mail, and we never saw anything from the bank. So, I ended up calling the bank and asking them when our foreclosure date was set for, and they said it wasn’t until Feb. 25,” said Russo.

The family was shocked and uncomfortable with the situation and decided to walk away.

"He had an offer in that the bank had accepted, and his expiration date on that offer was Nov. 25. If that were to expire, there is no saying whether the bank would accept it again. He would have to resubmit a new offer, and they may require a higher amount at that point," Russo said.

But Johnson said he did nothing wrong. He was simply buying the house to help the family out.

"I follow every law to the T, because I'm in no way trying to mess somebody over. I've always been successful in the past. All of my other clients who I've tried to work with, or all the other homes I've tried to purchase, I should say, has worked out just fine," Johnson said.

Realtor Barbara Shaw said with many people needing to sell their homes, it’s important for buyers to know who is representing them.

"Do your research; find everything out about them you can. Even real estate agents, they're not all perfect, as we all know, but find out as much as you can about them, even in the community that you live in, find out about them. Do they have a good reputation? Then go with it," Shaw said.