CLARKSVILLE, Tenn. -- A scandal involving one of the biggest developers in Clarksville could serve as a cautionary tale for residents.

Video: Builder's Bankruptcy May Cost Homeowners

The Channel 4 I-Team reported how people fear they could lose their homes after their builder, Bill Mace Homes, was sued on fraud allegations.

What happened to the residents could happen to anyone looking to build a new home.

The I-Team on Friday set out to find out how homeowners can avoid what's happened in Clarksville and found that what applies to old homes doesn't apply to new homes when it comes to making sure that the bank doesn’t the home.

One of the perks of owning a new house is the knowledge of being its first owner, but for some Clarksville residents, there is also trepidation.

"We are hoping there is no lien on the house," said homeowner Maria Wenger.

"But you don't know?" asked reporter Jeremy Finley.

"No," she said.

Mace is accused of taking part in a scheme in which checks homeowners wrote intending to pay off Mace's construction loans were instead used to fund his other developments.

An employee of a title company is accused of working with Mace in the scheme.

Mace has also filed for bankruptcy, which means there could be a lien on the residents' houses in addition to their mortgages.

Title insurance would have saved them, an expert said. Title insurance protects people if an unpaid lien shows up on the house from a previous owner. But because the residents bought new homes, they said they didn't think they needed it.

"They are the ones that are in trouble," said columnist and Realtor Richard Courtney.

Courtney writes a weekly real estate column and advises people buying new construction to get title insurance.

"If a person doesn't have a clear title to their house, they don't own anything. Therefore, they can't sell it, they can't do improvements on it. Really, they'll be improving someone else's house," Courtney said.

When a resident buys an older home, the seller pays for the title insurance.

People who buy new homes are "forced to pay for that title insurance, which is a hefty sum," Courtney said.

On a $150,000 home, the price for title insurance would be about $850.

Mace's attorney told a Clarksville newspaper that his client has filed bankruptcy but has enough assets to cover his debts.

It is not clear if that means the liens are lifted on the residents’ homes.