Builder's Troubles Put Buyers in a Bind

The Fairfax County Police Department is investigating customers' complaints about the loss of their deposits. "I am unaware of any investigation and have not been contacted by the police," West said.

Korfonta did not return repeated calls for comment, but West said Seville encountered engineering and zoning issues on several projects that become nearly impossible to overcome when the housing market turned down and banks began to tighten borrowing standards in 2006. At the same time, some buyers began to cancel their contracts because they could not get a loan or sell, West said. "That has been a significant issue for us," he said.

"Even when things became difficult in the market, [Seville] continued to work with the banks to attempt to complete the projects and did complete them to a substantial extent prior to the foreclosures occurring," West said.

Three of Korfonta's properties did not fall into foreclosure, and he plans to continue work on them, West said. That includes some houses in a new subdivision known as Evergreen Estates in Annandale, which has been held up by a zoning dispute, he said. "Korfonta is intent on continuing work on the projects but is willing to return the deposits of any customers who no longer want to purchase the homes," West said.

Asked how Korfonta would be able to pay back those clients given the firm's financial problems, West said: "Seville is working through its problems and as the market firms up, it is hopeful that it will be able to meet all of its obligations."

The effects of Seville's troubles are being felt by doctors, real estate agents, and contractors throughout Northern Virginia.

Among them is Omar Anwarzai, a Seville customer and also a subcontractor.

Last year, Anwarzai submitted a $210,000 deposit for a $2.1 million Seville home. At the same time his firm, Floors USA, was working on several other Seville projects, accumulating a bill of about $100,000.

As Seville houses that his firm has worked on fell into foreclosure, Anwarzai said, he has been able to recoup some of the outstanding bills from the banks that took over -- but usually just a portion of the full debt.

He is having less success holding on to his investment in the home in Vienna. Anwarzai attempted to buy it at a foreclosure auction in hopes of recouping some of his investment, but was outbid.

"They started at $700,000 and then went up to $800,000," Anwarzai said. "My intention was to buy it at a cheaper price at least."

Korfonta founded Seville in the mid-1990s and over the next decade built a reputation as a luxury custom home builder, constructing some eye-catching houses throughout Northern Virginia, including in Annandale, Great Falls and Vienna. Customers say they were attracted to the high ceilings, high-quality materials and the ability to personalize a Seville home. According to West, Korfonta's company has built 75 homes worth more than $1 million and has been featured in several local real estate magazines.

In 2004, Korfonta helped make Fairfax County history when he agreed to help preserve a late-Georgian style house built in 1760. The county paid Seville $760,000 and granted the firm some tax benefits in the deal, the county's first easement to preserve property.

Korfonta has been active in local Republican politics and thrown fundraisers at his home, West said. Last year, Korfonta hosted a charity fundraiser at his home that was attended by Rep. Tom Davis (R-Va.).

The privately held firm had eight employees and $900,000 in revenue by April of this year, according to Dun & Bradstreet, a credit agency for businesses.

But by then, Lisa Wyatt, a Virginia public relations executive, had already grown increasingly concerned about Seville's financial stability. Wyatt and her husband had put down more than $100,000 as a deposit for a home in 2003, expecting it to be completed in a year. The project faced repeated delays, including clearing the land.

Once, Korfonta told the family that the new house would be completed in 90 days and that they should sell their current home, Wyatt said. But when the delays continued, Wyatt and her family were forced to move in with friends and put their belongings in storage. "The delays cost us almost $100,000," including storage fees and other expenses, she said.

Last year, with months of work still to go, Wyatt said Korfonta asked her to pay some of the subcontractors directly, including the one delivering the fireplace for the family room. "I did that because we were trying to get this house finished, and I knew he didn't have the money," she said.

West, Korfonta's lawyer, said he was not aware of any instance when a purchaser paid a subcontractor directly to finish a house, although it is not unusual for buyers to pay subcontractors for upgrades.

In September, Wyatt and her family moved in, completing an experience they would not repeat despite the ultimate result. "The house, it is magnificent, the design is beautiful," she said. But the experience has soured her on working with custom home builders.

Some Seville customers whose homes have not been delivered are still hoping for their money back.

Jeewon Kim, a Fairfax anesthesiologist, heard the news about the foreclosure of her five-bedroom house in Annandale from a friend. Kim immediately called Korfonta, who she said agreed to return her $50,000 deposit. She did not receive the first payment, which was due in May. But another is due in September. "We have to find a way to make him pay us the money back," she said.

West denied that Korfonta is in default on any agreements to return deposits.