Efforts by T.H. Properties L.P. (THP) to resume home building while it navigates U.S. Bankruptcy Court may depend on Michael C. and Evelyn Foisy.

The couple, who put a $21,375 deposit down in December on a house in the Harleysville company's Westport Farm development in Hatfield, are trying to recover their money or buy the property - even though they were rejected for a home loan by a THP subsidiary, Hendricks Mortgage.

Until either occurs, the Foisys and their attorney, David L. Marshall of Eastburn & Gray P.C., of Blue Bell, will press their objection to THP's motion to sell six more homes in its developments under cash-collateral stipulations set by two lenders, Susquehanna and Continental Banks.

That motion, and a host of others related to the builder's Chapter 11 filing April 30, are to be considered at a hearing today at 10 a.m. in U.S. Bankruptcy Court in Philadelphia.

At issue is the apparent failure of THP to escrow the Foisys' deposit, as required by Pennsylvania's Planned Community Act.

When they were denied a loan, the Foisys decided to terminate the agreement of sale and submitted the document to THP on April 14. THP sold the house again.

When Marshall first raised the objection at a June 11 bankruptcy hearing, he received from the builder's attorneys a copy of the termination agreement, signed by a THP official, stating that the builder would refund the Foisys' deposit in seven days. The agreement states that the $21,375 was "held in escrow."

THP's attorney, Natalie Ramsey, told Bankruptcy Judge Stephen Raslavich that the builder did not have the money and that it had been placed in operating funds, rather than in escrow.

Marshall maintains that because the deposit did not belong to THP, it is not part of the bankruptcy filing. If the judge agrees, it would mean the Foisys would not have to stand in line behind banks and THP's other creditors to get their money.

Until the deposit is returned, the agreement to cancel the sales contract is "void for lack of consideration," legal experts say, because the money or value has not again changed hands.

In the meantime, according to this argument, the Foisys continue to be "equitable owners" of the property, meaning the lot cannot be resold.

Failure to place a deposit in escrow violates state law, but no builder has been prosecuted for a violation since it took effect in 1997.

"There is no stated penalty," said Marshal Granor, a lawyer and principal in Granor Price Homes, of Horsham, who teaches classes on the subject statewide. "There are requirements of good faith, and the right for a grievance to go to the state attorney general, however."

The state Attorney General's Office has been fielding complaints about THP since the company shut down its operations in April, but it did not return requests yesterday for more information.

Marshall declined to comment, saying he preferred to wait until after the court rules.

THP buyers and homeowners, though, are watching the Foisys' efforts and talking.

"I'm hopeful," said John Clancy, who gave THP $5,000 he and his wife, Nicole, had received as wedding gifts last year as a deposit on a house in the Northgate development in Pennsburg. "But I am also using common sense, because their assets are property and construction equipment. I just want to buy a house, but I don't want THP involved in it. I don't trust them. Not [THP co-owner] Todd Hendricks personally, but the company."

Ed Crotty, who maintains the online forum Wheresbuilder.com, said buyers had been submitting material about escrow procedures THP had given them.

Crotty, who moved into his house three weeks before the bankruptcy filing, said many THP homeowners had been critical of his forum and buyers posting complaints, saying that "we were devaluing their property."

But lately, he said, "a growing number of them have been concerned that THP has not been doing 'six-month walk-throughs' " - post-settlement procedures to fix problems.

Rob Eckenrod, who bought in THP's Biltmore Estates, has been living in a hotel with his family because their house still is unfinished and uninhabitable.

"It's not going to do very much for us," he said. "We only have a couple of options: to stay in the hotel; to try to get a short-term rental, which isn't easy with three kids and pets, or to walk away from our money and try it again.

"They aren't very good options."