Title insurance saves Blue Springs family from foreclosure
10:29 PM, Aug 19, 2013
BLUE SPRINGS, Mo. - A Blue Springs family scheduled to lose their home Friday was told Monday their title insurance policy would save them from foreclosure.
Michael Nichols, his wife Erica Hotson and their two daughters are finally enjoying a little family time after a year-long nightmare.
"(It's been) every worse feeling a parent could have," Nichols said. "Your house is going to be taken from you for no reason."
They purchased the home from their landlord Kent Fritz of Cardinal Investments LLC.
"It kind of was odd. He knew everyone to send us to. He knew, 'Hey go to this person. They'll help you get the title. Go to this person, they'll help get the credit,'" Hotson said.
Although leery of Fritz's advice, the first-time home buyers went through with the deal.
They made all their payments on time but eventually received "notice of sale" letter in the mail, saying the bank planned to auction off their home this Friday.
"It was a sickening feeling in my stomach," Nichols said. "I was blindsided."
41 Action News followed the paper trail, and found that Nichols took out a loan to buy the home from Fritz. However, First United Title Agency LLC, which Fritz referred them to, missed Fritz's outstanding lien.
Fritz had taken out a $419,000 loan with Excel Bank for several properties including the one he sold to Nichols.
Because the title company missed the outstanding lien, Nichols' lender paid Fritz instead of Excel Bank.
Since Excel Bank was never paid, they threatened to foreclose on Nichols' home.
"We sold our gold for cash. We went to pawn shops," Hotson said. "We just got rid of all our materialist things to keep a roof over our children's head."
Eventually they ran out of money and options.
But just four days before they were going to lose their home, the family got a call from the bank.
"Since we purchased title insurance, our title insurance company was going to step in and pay the lien off since they had missed the search that they were suppose to find," Hotson said.
When they first entered the agreement, Nichols and Hotson purchased title insurance for $250. It's that purchase that saved their home.
Excel Bank's attorney Stanley Cox said West Cor Land Title Insurance, a parent company to First United, has entered an agreement to pay off the outstanding lien.
"It's the greatest feeling in my life," Nichols said. "We get to keep our home. We get to keep our home. That's all that really matters."
41 Action News reached out to Fritz via phone and made a visit to his Leawood home, but he was unable to be reached and no comment was given on what ever happened to the money that went to him instead of Excel Bank.
County records show Fritz owns several other properties in the area, and The Jackson County Sheriff's office says it has opened a fraud investigation to see if any other families might be in the same situation.