Facing huge debts, investors ponder next steps

Facing huge debts, investors ponder next steps

As lenders begin to seize houses that were purchased in an unusual series of transactions two years ago, investors are attempting to arrange complicated sales and several are beginning to struggle with difficult decisions on whether to file for bankruptcy.

Nurses and other middle-class investors bought more than 100 Murrieta-area houses in 2004 and 2005 through Stonewood Consulting Inc., a Murrieta mortgage brokerage that the California Department of Real Estate is now seeking to bar from the industry. The first of those houses fell into the foreclosure process last fall, and the owners began filing lawsuits in January. Stonewood clients often paid far more for their houses than did buyers of comparable houses nearby and, according to numerous neighbors and real estate agents who followed the purchases, $50,000 to $120,000 more than the original asking prices —- a pattern that raised eyebrows in the slackening market.