DOT recorded in wrong county!

[Larry Bowers]

New here to BP and note investing, and getting baptized by fire. What a pickle I am in. I need advice!

I am the lender on a $50K note that began in early 2017. The note listed a property in its text, but it was not secured. I know that was not wise, but I did correct course: about three months ago, the amount was secured by a deed of trust, but the title company recorded the DOT in the WRONG COUNTY. I just found this out yesterday. I suppose I am not secured after all.

In the meantime, things have gone sour with my borrower; he hasn’t paid me in four months. He is ducking me and being intentionally obtuse. I suspect bad faith on his part if I don’t take action.

As far as he knows, the deed is recorded and he is on the hook to eventually pay me. But if I want to foreclose, I assume the deed of trust must be recorded in the correct county. However, the request to sign a new DOT would alert him that I don't have any leverage. I expect with that knowledge that he would then disappear entirely.

If it matters, the deed was supposed to be a second lien and this is in Missouri. If I could foreclose, yes, there is enough room for me to made whole, even as second lien.  

Is there anyway that I can either get this recorded in the correct county without alerting the borrower? Or is there an E & O insurance the title company has to cover me for their mistake? It’s not my fault the title company recorded the deed in the wrong county.

I haven’t started firing salvos at the borrower or the title company yet. I am coming here first for wisdom. Thanks!