The Expert Podcast

Today in an ongoing series about vehicle lien releases We're going to look at some documents and instructions on how to obtain a lien release for motor vehicle, including some. Specific scenarios where the lien holder may be out of business may not be able to be contacted And what are your responsibilities as a vehicle owner? First let's take a look at an example of instructions for lien release This happens to come from the New York department of motor vehicles. How to obtain the lien release on a vehicle Pretty straightforward That's the question on everybody's mind is how do you get in lean release? we know what a lien is We're not gonna get into, the definition of lean, how to obtain the lean release Well first you have to satisfy the terms of a loan by paying the balance of the loan back to the lender Now. This is assuming the loan is paid off If the loan is not paid off, there are still some methods that can be used to get a lien release And we'll talk about those. a little bit later in this video. But the most common method is you have to pay back the balance However if you notice. This is only step one, just because you paid off the loan does not automatically make the lien go away from the title Here's why, when you pay your last payment to that lender, what they normally do is they mark your account paid. Just like any other loan account. They stamp your title paid and they mail it to you or maybe they'll mail you a lien release document. They normally do not notify the titling authority like department motor vehicles So that's lien is still in their records. The department of motor vehicles or the title agency in your state whatever it's called normally does not know your lien is paid off when you pay off the last payment only you know it and the bank knows it So now you have to get that information to the DMV. So. Normally what will happen is the lender. We'll…give you a lien release document. Which is an official document Here's what one looks like It's an application for removal of lien. This happens to come from North Carolina We'll come back to this one month. The next thing you need to do is if you don't receive the lien release, submit a request to the lender. This is a very common scenario. A lot of times the lien holder will either not send it to you or might get lost. If that's the case, you want to get another one as soon as possible Now it's important how you request that you don't do want to do it by phone You don't want to call them up. You don't want to do it by email. You don't want to do it through their website. The only way you want to do it is in writing. And there's a very specific way of doing it. Let's jump to that right now before we get to the other steps. If you are needing a lien release. Get the form That's the official lien release form for your state Here's the one for North Carolina. It's an application for removal rule of lean. What you do is you fill it out year make body style model VIN number. Owner. Lienholder information. And. prepare this on behalf of the lender…And…send it to the lender. Don't trust that they're going to do the work because here's why all the people working at that bank are doing other jobs If you just call them and say Hey get me a lien release First of all they have to find this form. Did you know about this form Well they don't either. So they're going to maybe try to find it And as soon as they run into difficulty if they're going to go back to their other job so do the work for them. You may not think you have to it's not fair to do it, but if you want your lean release, this is what we recommend doing. Send it to them by mail. In addition. To sending it to them, put a return on envelope. Already filled out with your name and address and the stamp. You want to make it as easy as possible for that lien holder to send it back. Because if there's any work involved with that person at the bank have to do any kind of work. They might just throw it in the trash. And not deal with it…So then what you do once you get that lien release You want to go to the DMV and submit it to them and verify that the liens are removed…Okay. You don't want to take it…Take their word for it that you just mailed it to them And it's done You want to verify that it's done because if you find out three or four years later the lien still on your car it's going to be harder to take it off Then sometimes you might have to provide a copy of the title along with the lien release however…Norm most states this is New York Don't give you a title If there's a lien now, what are the responsibilities of the lien holder This is where you might actually have some leverage. Upon satisfaction of a security interest a lien, the lien holder…shall immediately. Execute a release of security interest. And mail the release to the owner…The department of motor vehicles. Encourages. Lien holders to cooperate. By mail. or delivering lien release immediately. To the lien holder. And if not you might be subject to action. All regulated financial institutions shall release liens and deliver lien release no later than three business days after clearance Now lienholders break this rule all the time. But. In most states there's a requirement under the law that they deliver to you a lien release document within a certain period of time. Three days is kind of quick. Most states require 30 days or a month and a half whatever. But they have requirements and that's leverage you can use. To do that. Here's another question that comes up obtaining a lien release from a close or failed bank This is where it gets tricky. If a bank has been closed or they're not operating anymore. You still have to get a signed lien release They're not going to take your word for it at the DMV that this form is okay without their signature. So what do you do? You have to look up. Who's on. to sign on behalf of that close lender, the FDAC might have information. National credit union secretary of state. When we do this. We do a full research on that lien holder We find out who's the registered agent who was there. Admitted carrier. Who maybe is the merged entity. And we will prepare this document. And we'll send it out to all the different. Potential authorized signers because all you need is one. But you're gonna have to do some research to find out who is the authorized party that can sign on behalf, because if the DMV gets this form and it's not signed or not signed by the right person and has to be notarized to. They're not going to accept it. They're just going to kick it back. So you want to make sure that you do the research and find out where that lien holders authorized agent is just because they shut down doesn't mean that the lien goes away And here's the other thing. Most financial institution. When they stop operating as a lien holder, they don't just disappear They don't just shut the door turn off the lights and walk away their assets go to some other entity another bank another lender because they're worth money. Even the mailing list of that bank is worth money So some other bank or institution has a right. To the assets and activity of that lender So they can sign that lien release. You have to find out who that is That's the tricky part And that's where…the research comes in And, usually we average about an hour or two worth of research to find out who those lienholders are And you can do the same thing yourself If you need that lien release Now one last thing about this document make sure that you get the proper document. Every state has an official lien release form. Like this one however, sometimes a bank or lien holder is not comfortable signing a lien release because they don't know the lien is released If it's an older loan, it's charged off written off they're out of business. They might not know. that lien being released They don't see it in their system. So instead of a lien release, you might offer them the option of signing What's called a letter of non-interest It's another official form. That is an alternative document to a lien release where the lender can sign that instead to clear the lien off of the title. Hopefully that gives you information You can reach our website car titles.com has more information about how to get a lien release. We have all the forms We have all the instructions. there's also title services available. The main thing is though if you have a lien on the vehicle that you want to title you want to get it off as soon as possible. So you don't run into problems where the vehicle is not legally yours.