The Eye of the Warlock — P.W. Catanese

When a stranger knocks on his door and promises to lead him to hidden treasure, twelve-year-old Rudi is skeptical. And he's even more suspicious when the stranger proclaims that the jewels belonged to the legendary Hansel. Sure, Rudi's heard stories: the witch, the oven, the sister named Gretel. But he never fully believed they were real. Until now...

Life has been unkind to Rudi -- and to Lucie and Elsebeth, the two little girls he looks after. So when this stranger announces he needs Rudi's help to uncover Hansel's treasure, Rudi sees a way out.
And so an incredible journey -- one filled with mist-covered castles, a treehouse-dwelling outsider, and creatures called murglins -- begins. But as Rudi, the girls, and the stranger weave their way through the rambling woods, Rudi notices the clouds blackening and a thick fog descending. He wonders, Has the forest always been this...creepy? And those shadows between the trees -- is their tiny group being followed?
Then the unthinkable happens: Lucie and Elsebeth are stolen! Who would take them? Rudi gets his answer in the shape of a warlock. And his ransom price is steep: Bring me Hansel and the children will be returned. Is a simple woodcutter like Rudi any match for a thousand-year-old villain?