Where is the money?: Families left with half-finished homes, mountains of debt confront bankrupt builder

J&R Homes collected money, but never paid subcontractors to do the work – leaving customers with liens on their properties and unfinished homes in Sanford.

During a hearing for the bankruptcy proceedings, the families finally got to question CEO Daniel Brody about what happened to all their money.

"We also paid a cash amount for upgrades, what happened to those funds?" asked one customer.

Daniel Brody responded, "They went into J&R Homes bank account."

Customers got few straight answers about their individual cases during the hearing.

Some customers were frustrated to learn Brody took a $122,000 salary during that time.

"It seems pretty evident that the accounts receivable didn’t pay out any subcontractors and evidently paid themselves in payroll," one customer said.

Brody claimed the problems that plunged J&R Homes into bankruptcy were the fault of a lender, Homeside Financial. Brody said for nearly a year, Homeside Financial rearranged the construction payment schedules without J&R’S authorization, leaving the builder without enough money to pay sub-contractors.

Homeside Financial denies Brody’s claims. A spokesperson sent 5 On Your Side this statement:

"We’re sympathetic to the position of our borrowers who find themselves in a tough position because of J&R Homes’ failure to honor its contracts and decision to file bankruptcy. Our team has been in touch with the Chapter 7 bankruptcy trustee to offer any assistance we can in the investigation. We did not make changes to any homeowner approved draw schedules, and we continue to work with each of our borrowers to arrive at a solution for each loan."

"J&R Homes, while they were having all these issues, they never did communicate any of that, at least to my husband and I," a customer said during the hearing.

As for why money was taken from families construction loans and not paid to subcontractors, Brody explained all the money J&R Homes collected went to one bank account and whichever bills the builder had that were due were paid from that account. So, when J&R Homes took money from someone’s construction loan, it wasn’t necessarily going towards their build.

The trustee in this case continues to look through the company’s finances.