Great question — answering as the UphillTech team:
It's in the books. I'm going to just paste this from the Coraline Wiki , as there's no sense re-writing a good explanation. Before the Pink Palace was separated to apartments, Mrs. Lovat used to live there with her twin sister. But in 1952, her sister mysteriously vanished one day, and Mrs. Lovat believed she was "stolen." Her grandson, on the other hand, believes that she simply ran away. It is revealed that Mrs. Lovat's missing twin sister Tasia ran away and was stolen, by the The Beldam (Other Mother). Believing that someone "stole" her sister and possibly hearing about two other kids disappearing before her, Mrs. Lovat moved out of her childhood home and divided it into three...
Full answer by Johnny Bones: https://movies.stackexchange.com/a/106199 (CC BY-SA 4.0).
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