I think he's saying he has the MSO sheet (Manufacturers Statement of Origin). This is one of the items you take in to the DMV when you apply for a title and register for plates. So, I don't see how he could have legit plates and NOT have a title in his name.

I see at least two possibilities -

1) He has a loan out on the bike, so the title has been issued to him but the bank is physically holding it and is listed as a lien holder (so he doesn't have "clear" title)

2) He never did actually title the bike, which means the plates aren't legit

Either way, it doesn't pass the smell test. If you have either the VIN or the plate number, call the California Highway Patrol and tell them you are considering buying this bike and you want to know if it or it's plates have been reported stolen. They should run the numbers and give you a simple yes or no (though don't expect any additional info).