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$250 title insurance saves Mo. family's home from foreclosure

By Mike Headrick | Posted - Aug 22nd, 2013 @ 10:37am


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BLUE SPRINGS, Mo. — Just days before a Missouri couple faced being kicked out of their home, they won the battle to keep the house.

The Nichols family had made all their payments on time, but were still facing foreclosure. And it took awhile to figure out why.

Michael Nichols, his wife Erica Hotson and their two daughters are finally able to enjoy family time after a year-long nightmare.

"Every worst feeling a parent could have," Nichols said. "Your house is going to be taken from you for no reason."

A year ago, they bought their home directly from their landlord, a real estate investor.

"It kind of was odd. He knew everyone to send us to," Hotson said. "He knew, 'Hey go to this person they'll help you get the title. Go to this person, they'll help get the credit.' "

They were leery, but the first-time home buyers went through with the deal. For 12 months, they made all of their payments on time and then got slammed with the truth.


Every worst feeling a parent could have. Your house is going to be taken from you for no reason.

–Michael Nichols


A notice of sale sign went up on their house that said the bank planned to auction off their home Friday.

"It was a sickening feeling in my stomach," Nichols said.

A look at the paper trail revealed what happened.

Michael Nichols took out a loan to buy the home from Kent Fritz, but the title company Fritz referred him to didn't notice there was an outstanding lien on the home with Excel Bank. The money from the Nichols' loan went to Fritz when it should have gone to Excel Bank. And because Excel Bank was never paid, they threatened to foreclose.

"We sold our gold for cash. We went to pawn shops. We just got rid of all our materialist things to keep a roof over our children's head," Hotson said.


We sold our gold for cash. We went to pawn shops. We just got rid of all our materialist things to keep a roof over our children's head.

–Erica Hotson


The Nichols quickly ran out of money and options but had one last lifeline — the $250 they spent on title Insurance when they closed on their home.

"Since we purchased title insurance, that our title insurance company was going to step in and pay the lien off, since they had missed the search that they were supposed to find," Hotson said.

That title insurance saved their house.

"It's the greatest feeling in my life," Nichols said. "I mean, we get to keep our home. We get to keep our home. That's all that really matters."

But what happened to the the money that went to their former landlord instead of his bank?

No one seems to know exactly where it is, although Kent Fritz also owns several other properties. Missouri authorities are now investigating to see if anyone else is in the same situation.

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