I bought what I thought was a 1st due to the fact that it was an option ARM(Which were never 2nd?s) and insured as a 1st however according to recording dates it is in 2ndposition. The reason for the recording error is the loan I bought which was handled through Placer Title did not properly close out the 2nd and no recon or subordination agreement was recorded. They were instructed to pay off and close per the escrow instructions the HSBC 1st and 2nd but instead just paid off the 2nd and did not close it nor was any recon recorded. It was an obvious error on Placers Title part. I thought since it was clearly their error they would issue a title policy and clear this true 2nd with HSBC or Indemnify another title company. But Instead they?ll declined to insuredit and stated the following ?We have declined to insure because of a pending claim on the property, It?s not appropriate for me to comment further on the matter.? I tried to inquire further but got nowhere. It gets a bit more complicated as well. The former owners apparently continued to use the checks on this LOC in question and drew tens of thousands of dollars out. Knowing of course that was fraudulent since they were suppose to close it. I have not confirmed the dollar amount of the balance yet because I have not received a pay off. However the realtor that was trying to handle a short sale for them confirmed that their son got hold of the checks and racked it up near the max of $80K. The good news if any is I bought the property for ~$530K and the property?s value is in the low 700?s. So if indeed I have to pay off this $80K loan with HSBC there?s still room in it to make a few dollars. However I would prefer not to pay for somebody else?s mistake. Referring to Placer, HSBC for allowing the checks to clear and the former owner for knowingly writing checks for a loan that was closed.