How to disable iCloud? *Legitimately Purchased and Legitimately *******

Hello people of the interwebs. I recently purchased an iPhone 4 AT&T White from Craigslist. Let me start off by saying that it is trashed, and is missing a home button. When I first bought it, the person from whom I bought it remote wiped it when we met, but the phone died just after they pressed the button in iCloud to wipe the device. Neither of us had much time, so I paid her and we went our seperate ways.

Since I have a 5S, I bought this in November to fix up and give to a family member. However, when I charged it up a few days before Christmas, I waited for it to restore... and waited... and waited... and nothing. When I updated it to 7.0.4, I skipped the screen that asked for their passcode for iCloud. Now it pops up asking for a code so that I can use iCloud, and it pops up every like 3 seconds. I checked and Find My iPhone is still enabled and their wipe still hasn't gone into effect. I've contacted them and the person said that it is no longer showing up on their account.

My question is: Why isnt it wiping the phone, and is there a way to restore without a password and without a home button? DFU wont work since there is no home button and Sttings/iTunes restore doesnt work because I dont have the passcode to the account.

Please, I need help.