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Debbie Dujanovic reporting Produced by Anne Forester Home for auction! It's a sign of the times. In fact, the Utah Division of Real Estate expects more and more auctions to pop up as the real estate market fizzles.
Division Director Mark Steinagel tells KSL-TV it's a way for desperate owners to sell their homes. "It is kind of the buzz of a better deal, a better price and drawing more customers to look at properties," says Steinagel.
Herriman resident Carrie Clark says bidding at auction saved her $100,000 on a new home. "It looked like an opportunity," says Clark.
Andy Bunker of Lehi says it saved him $100,000 as well. "I mean, we moved right in," says Bunker. "I was going to retire into this house," he added.
Both families say it was all possible through a Utah County company called Liberty Acceptance. After the auctions the families say they paid the company large sums of money. Bunker says he paid $221,000, while Clark says she put down about half that amount. "I gave them a $100,000, which was all of my savings at that time," says Clark.
Both families figured the more they put down, the less they'd owe. Clark thought the mortgage amount on the home she won would be about $191,000. Andy Bunker figured he would owe around $80,000.
Families were so thrilled to get the great deals they were willing to go along with what came next, the unusual contracts. Before they could actually purchase the homes they had to lease them from Liberty Acceptance. But instead of signing the contracts, families say they wish they would've ripped them up.
KSL has found four families who now face losing the homes they're in. What happened? Families thought the deal was supposed to work like this: they make their monthly payments to Liberty Acceptance, and in turn the company pays the mortgage.
But last fall, Liberty Acceptance suddenly stopped passing the money on. Overnight, the families found the mortgages in default.
What makes their situation worse is unlike a normal real estate deal, they have no title to the homes. According to county records, the titles are held by relatives of the man who manages Liberty Acceptance. Now the Bunkers and the Clarks worry they could lose their homes.
The bad news just got worse when the company called about all the money the families had put down. Carrie Clark's husband, Brian, says the phone call went something like this, "‘Sorry things didn't work out, we invested all your money in another investment opportunity in Texas that didn't work out.'"
Brian Clark is a real estate agent. He says he took one look at the contract, and he knew it was trouble. His wife Carrie got the home before they were married, and now she is suing Liberty Acceptance for breach of contract. In a court hearing last month, Liberty Acceptance manager Mark Craner admitted under oath that Carrie's $100,000 went to other investments and the company now claims it's insolvent.
KSL Investigative Reporter Debbie Dujanovic went to Liberty Acceptance in Provo to get the company's explanation. Craner wasn't in, but responded to Dujanovic's questions by e-mail. Craner pointed out that nothing in the contracts actually required Liberty Acceptance to forward the families' payments to the mortgage companies. He added the payments that didn't go to the mortgage were returned to the families, except for one, which went to attorney's fees.
Liberty Acceptance says it is trying to retrieve all that down payment money it invested and give it back to the families. The company also said it's helping the families buy the homes at reduced prices. But families thought they were already doing that, and now they're hoping state investigators will take a closer look at their cases.
