In First Fidelity Thrift & Loan Assn. v. Alliance Bank (1998) 60 Cal.App.4th 1433, a borrower obtained a loan from First Fidelity secured by a deed of trust encumbering both the borrower's commercial and residential property. When the borrower made a capital reduction payment, the trustee of the deed of trust erroneously reconveyed the commercial property instead of the residential property as instructed. (Id. at p. 1436.) Four months later, the borrower applied for a loan from Alliance Bank, indicating on his financial statement that the commercial property remained encumbered. While the Alliance Bank application was pending, the borrower obtained an additional loan from a third party bank secured by a deed of trust against the commercial property. (Id. at pp. 1436-1437.) Before funding the loan, Alliance observed that there was a discrepancy between the borrower's financial statement and the title report. The borrower told Alliance that at some point he had refinanced one of his properties and it had been "released." (First Fidelity, supra, 60 Cal.App.4th at p. 1437.) The third party bank confirmed that the commercial property was not encumbered by a First Fidelity deed of trust. (Id. at pp. 1437-1438.) Approximately two years after Alliance funded its loan, First Fidelity realized its mistake. It ultimately obtained a judgment against the borrower reinstating its deed of trust, though junior to Alliance's deed of trust. (Id. at p. 1439.) Ultimately, both loans went into default and, following a series of proceedings not pertinent here, First Fidelity and Alliance both moved for summary judgment. While First Fidelity maintained that Alliance failed to thoroughly investigate First Fidelity's interest, Alliance asserted it had neither actual nor constructive notice of First Fidelity's encumbrance. (Id. at p. 1440.) The Court affirmed the grant of summary judgment in favor of Alliance, reasoning the undisputed evidence showed that Alliance met its burden to show it had no knowledge of First Fidelity's claim on the commercial property, including no knowledge that the reconveyance occurred in error. (First Fidelity, supra, 60 Cal.App.4th at p. 1442.) We further found that Alliance had no constructive notice of the erroneous reconveyance, as the information it learned during the course of its investigation was consistent with normal practice. (Id. at p. 1445.) First Fidelity asserted it met its burden to establish a triable issue of fact as to whether Alliance was a bona fide encumbrancer by showing that there was an inconsistency between the borrower's financial statement and the title report, and arguing that Alliance made inadequate inquiries to resolve that inconsistency. Relying on the general principle that "the inquiry legally required, however, is only a reasonable inquiry, not an exhaustive one," the court determined that Alliance discharged its duty to inquire once the discrepancy had been explained in a manner consistent with normal practice. (Id. at p. 1445.) That is, once Alliance learned that the third party bank held an encumbrance against the commercial property, "it was a reasonable deduction from this information that First Fidelity's deed of trust against the commercial property had been reconveyed, which in fact was correct. No evidence was presented to the effect that Alliance had reason to suspect that the unusual had occurred: that First Fidelity had reconveyed by mistake." (Id. at p. 1444.) The Court explained : "A good faith encumbrancer for value who first records takes its interest in the real property free and clear of unrecorded interests. 'An encumbrancer in good faith and for value means a person who has taken or purchased a lien, or perhaps merely the means of obtaining one, and who has parted with something of value in consideration thereof. . . . A "good faith" encumbrancer is one who acts without knowledge or notice of competing liens on the subject property. '"