HUD REO Cloudy Title - Won't Release Deposit

[Brit Hale]

None of my local title companies will insure a particular title issue (BOA foreclosure and loan modification done improperly). I'm not terribly concerned about the $500 they won't return even though I view this as seller default. I take issue with them not providing "marketable title." I could still acquire the property and make a "lifetime" rental without likelihood of being able to provide marketable title and resell in the future- what would YOU do?