"‘Where will we go, where are we going to live?’" Petterson recollects one of his son’s asking him recently.

Petterson is one of the millions nationwide that is on the brink of losing his home to foreclosure. In fact, only a court appearance last week to halt a Sheriff’s sale on Nov. 14 is enabling him and his family; a wife, three kids and dog; to have a roof over their head a little longer. The fact is, however, the home isn’t even his anymore, it belongs to Wells Fargo Bank, but Petterson is fighting to get his home back. He contends his home was stolen from him through an elaborate home foreclosure rescue plan.

Petterson’s problems have long been coming. In 2005, he went on disability from his job at Yellow Freight in Carlstadt. Soon after, he began falling behind on over $6,000 in mortgage payments to California-based Aames Home Loan on his $369,000 mortgage after the company raised his monthly rate from $2,800 to $3,900. His wife Jean’s part-time salary at UPS would not suffice in regaining leverage on the payments and Aames, according to Petterson, wouldn’t budge on the rate. He began getting initial notices of foreclosure.

Foreclosure rescue?

A ray of hope came by way of mail, a flyer from Elite Financial Solutions, a Scotch Plains company, that had retrieved the Petterson’s address through public foreclosure records, as many "foreclosure rescue" companies do. The company promised to clear the Petterson’s debt while in the same token saving their home.

"At this point, my back was against the wall," said Petterson. "I said, we’re about to lose our home, so taking this deal, what did we have to lose? In hindsight, I deeply regret it."

The situation seemed simple enough. Elite representative Mike Martino sat down with the Jean and Kevin and proposed what is known as a lease buyback proposal, which Kevin and Jean later signed onto. By April 2006, Elite had set up a straw buyer, a Scotch Plains man named Shannon Garretson who retained the deed and was able to refinance the home, this time for $525,000. With those funds, $409,000 was used to pay off the Pettersons' old mortgage, clearing their outstanding debt; $10,000 went to Garretson for his services; Elite retained $15,000 and $16,500 went to the mortgage broker. The rest went into escrow that would be used to offset monthly rental payments to Garretson. After 24 months, time for the Pettersons to get their credit back on track, they would be able to buy the house back. The problem, however, is the monthly "rent" payments had to cover Garretson’s mortgage, a mortgage that was what Petterson said was based off an appraisal that he never saw and a mortgage that was acquired by a company that’s no longer in existence.

Kevin and Jean Petterson and their three sons, (left to right) David, Dylan and Kevin, Jr. stand outside their Rutherford home, which they are on the brink of losing. After facing foreclosure in 2005, the Pettersons turned to a foreclosure rescue company. Their problems only got worse.

"Take a look at the house, it’s a small Cape Cod, three bedroom, one bath. This house was not worth $525,000 at the height of the market," said Petterson. "I think once we saw everything on the table, I just said this is a scam and started calling the FBI and then got a lawyer. I told them [Elite] they’d have to evict me."

The monthly payment as per the contract was now $4,893, nearly $1,000 more than the payments Petterson could not make when he went into foreclosure with Aames. A statement sheet shows that Elite was making payments from June 2006 to the middle of 2007, drawn directly from the $61,000 in escrow.

Company claims legitimacy

But Elite couldn’t evict the Pettersons. They didn’t retain the mortgage and didn’t own the home, Garretson did, whom the Pettersons said they have never met. Soon after the escrow ran out, Petterson said he started getting the foreclosure proceedings addressed to Garretson in his mailbox.

Stev French, president and CEO of Elite Financial Solutions, said the blame needs to be put on Petterson, not his company for the situation. He said before even approaching Petterson with the lease to purchase option, a last resort, he presented five other alternatives ranging from filing for bankruptcy to offering a short sale of the house that could recoup costs due on the mortgage. He said after Petterson chose the buyback option, he made one payment and then payments ceased. French said, pointing to the deed on the home, that Petterson was reckless with non-payments on his mortgages before Elite entered the picture and the same trend just carried through.

"The chain of title shows that this man bought a house, then refinanced multiple times because he never made his payments," said French. "He wasn’t doing what he was supposed to do then or with us. He wasn’t paying, so to say I’m the bad guy, he’s the problem. I tried to help this man. In hindsight, I’m kicking myself in the butt. I say damn, maybe I was wrong."

French calls Garretson the victim, a hopeful investor that was given a raw deal and now has his credit tarnished due to the stop payments by the Pettersons. He says Garretson walked away with a $10,000 check and now has a foreclosure sitting under his belt.

"Mr. Garretson was a person wanting to make a few thousand, he didn’t ask for all this," said French. "Was he greedy? You can maybe call him that, but he didn’t deserve all of this."

The legal battle ahead

According to both the New Jersey Division of Consumer Affairs and Better Business Bureau, there are no complaints filed to date pertaining to Elite Financial Solutions. Marshall McKnight, a spokesman for the state’s Division of Banking and Insurance says Elite is not licensed with them. Foreclosure "consultants" are not required to be licensed with his division, unlike actual mortgage companies.

After filing a complaint with the division, Petterson got a letter back stating it was not a "regulatory" matter, but a contractual dispute and the division could not intervene.

Howard Kaplan, Petterson’s attorney who is fighting to stave off the foreclosure, said he is trying to clear Garretson from the home’s title and have it reverted back to Petterson. He said he has spoken to Garretson and Garretson has discussed giving back the $10,000 plus interest in exchange for getting his name released from the title.

"It hurts me to think I will see Jean, Kevin and the kids thrown out on the street because they were not bright enough to recognize a scam," said Kaplan. "They are terrified of losing their home, the kids are unbelievably distraught. That’s the human consequence of this."

Late last month, state attorney general Anne Milgram announced the state was filing suit against 37 mortgage loan providers and employees for bogus "foreclosure rescue" schemes, ones similar to the way the Petterson deal was transacted. French maintains that he is not part of any investigation to his knowledge.

"These defendants preyed on people who were facing foreclosure and searching for a lifeline that would enable them to get back on their feet and remain in their homes," said Milgram.

In the meantime, Petterson is looking at two plans. The first, wondering where he would look for a new apartment. The other is banking on being able to work with credit bureaus enough to somehow salvage a new mortgage if the home is reverted back to him. In May, the FBI sent letters to credit bureaus announcing that Petterson’s situation was under investigation for a scam and advised them to work with Petterson on restoring his credit relative to the foreclosure.

"I have to start looking for something in town," said Petterson. "My nerves are shot over this. My house has been taken from underneath my nose. Elite walked away with $15,000 from the deal and in the process screwed two people."