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House accidentally sold to 2 buyers in O.C.

September 16, 2010 12:00:00 AM PDT
The real estate market may be suffering, but that didn't stop one Orange County home from selling - twice.Dough Garhartt and his partner Brandon Lively bought the foreclosed townhouse in San Clemente last March. They moved in and started renovations, but a week later, Garhartt said, the nightmare started.

"I came home from work and found an eviction notice on my door that said you have three days to move out of your home," he said.

Through a series of mistakes, the townhouse they had purchased at an auction for $365,000 had also been sold to an investment group, which had paid more than $345,000 in cash.

"We're kind of in no man's land," said Garhartt. "We bought a property but we don't have the property or the money, so we don't know what's going on at this point."

Both of the buyers have the deed to the property. One West Bank handled both deals and Point Break Escrow closed them.

"Who's to blame?" asked Scott Haushalter, a representative of St. John Trust, the investment group that bought the property.

Garhartt alleged the bank was at fault.

"They just simply forgot to cancel the foreclosure. It was a mistake. The right hand didn't know what the left hand was doing," he said.

According to court documents, the bank said the escrow company closed the sale by mistake. The bank said it did not receive a required form before closing. The escrow company denied this and said it had property delivered all documents to the bank.

While the case is sorted out in court, the investment group has allowed Garhartt and Lively to remain living in the home. However, if the investment group wins the two will owe them back rent in addition to the mortgage.

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