Larry Thomas Dominguez, 65, was arrested for suspicion of murder after being interviewed by detectives.
The new homeowner discovered a human skull and bones buried in a shallow grave in the 2500 block of Hesperian Street on Sunday.
"Larry had told us, the guy that lived there before, that he had a dog buried there," said the homeowner, who did not want to be identified. "We were afraid of working in that area so we left it for last."
The homeowner said there was a blanket and a pillow next to the body.
"We had somebody bring over a tractor and they just put it underneath and they lifted it and a skull just fell over," the homeowner said.
Police said the homeowners were not suspected of wrongdoing. The homeowner said she bought the house from her next door neighbor after it burned down in 2006. It was recently rebuilt and her adult children are now living in the home.
Investigators questioned Dominguez, particularly because of the suspicious comments he allegedly made regarding the buried dog. According to the homeowner, Dominguez, who had lived in the house for more than 20 years, had asked her family not to dig in the area where the remains were found.
"He told my husband that he had a dog and puppies buried in the back, that when we were ready to let him know, because he wanted to come and get the dog for his sister," the homeowner said.
Neighborhood residents also described Dominguez as a recluse.
"I just used to see the man come out of the house, very strange," said neighbor Tina Gutierrez. "The house was a mess. A lot of overgrown plants in the front yard."
Dominguez reportedly moved to a mobile home park in Santa Ana. His new neighbors described him as a quiet, but kind person.
The Santa Ana Police Department backed off the investigation Sunday awaiting the arrival of a forensic anthropologist Monday. The anthropologists were called to uncover the remaining bones, determine the cause of death and identify if the bones are from a male or female. They arrived early Monday armed with shovels and buckets, set up a blue tent above the backyard, and began sifting through the area. Authorities said the process could take days and anthropologists might have to excavate other parts of the backyard.
Phillip Mendez, who owns the home with his wife, said his relatives were the ones to make the discovery.
"They come running out like somebody scared them," Mendez said. "My son-in-law said his skin went up like somebody scared him. His brother said he wasn't coming back here."