The Expert Podcast

So if you have a vehicle that has a lean recorded against the title with the DMV, you cannot do a title transfer until you get that lean released from the title record. So how do you do that? What if it's a charge-off? What if it's a write-off? That's going to be one of the most common scenarios for a vehicle's lean to be recorded in an official title record.

If that loan or underlying payment has not been paid for a long period of time, the lender has probably placed it into non-performance or delinquency status, and it becomes a charge-off or write-off. What that means is that the lender does not consider it to be an asset on their balance sheet any longer. It means that the loan can no longer be counted on as a securitized instrument for the leanholder.

So what happens is they do a charge-off, they do a write-off, but they don't go out of their way to remove the lean from the title record. And the reason they don't is because it costs them money to actually do a lean release. So why bother doing it if it's not going to benefit them?

So, how do you get that lean removed? What you want to do is request it from the leanholder. However, it's very important how you go about doing this, and we'll talk about the method and also talk about a backup if, for some reason, you request it and they don't do it, drag their feet, or give you a runaround. What can you do to get a lean release without relying on the lean holder or on the lender?

Step one is to contact the lender in a very specific way. You want to do it in writing. You don't want to do it by phone, email, text message, Facebook, or any electronic means because lean holders do not have a specific lean release department. There aren't people sitting around waiting to sign a lean release. Everybody at the bank, financial institution, dealership, wherever the lean as help has some other job they're doing every day. And for them to drop everything and do a lean release is not going to be beneficial to them.

So what do they do? You call them up and say I need a lean release, and they tell you that they're not going to do it or they can't do it or they can't talk to you because you're not the borrower, or they tell you they will do it, but then they never follow through. So what you do is take the actual lean release document. You can see one here on the screen. This is a lean release. This happens to be from the state of Nevada. Every state has a specific official government lean release form. Nevada is one of the simpler ones. You get this form, and you fill it out 100%. The vehicle identification number, year, make, model, you see all the spaces on the screen, registered owner, printed name of the lean holder, address, and phone number of the lean holder, and you print it and mail it to the lean holder.

Don't try to fax it or email it any other way. If you do that, it won't work. Whether it's a charge-off or write-off, or even if it's paid off, you don't want to do it electronically. Here's why: that lean holder is going to get that email, and now they have to print it, they have to find an envelope, and they have to do everything that is work in their daily routine. If you already have it printed with a little arrow sticker, sign it and put a return envelope in that mailing, so all they have to do is sign it and send it back to you. You don't want them to drag themselves down to the mail room to find a stamp to get an envelope. You don't want to give any excuse to throw it in the trash. In addition to this lean release document, include what's called a letter of non-interest. Sometimes if that leanholder employee pulls it up because that's who's going to get it, just an administrative employee, they look it up and say it's a charge-off. Well, they might not know that that means lean release, but what they do know is that if you have a letter of non-interest, that means I have no longer any interest in this vehicle. As a signed lean holder, they can sign that because a charge-off means they don't have an interest in the vehicle. So include a backup with your mailing that says letter of non-interest; have that form also prepared, printed, and filled in; don't leave anything for work for them to do when you send it; again, put a return envelope with your name already printed on the front and a stamp on it, so all they have to do is sign it, put it in, and mail it to you. Make it easy for them.

The only time that lean holders we see do not send you a lean release is if it's an active loan on a later model vehicle with a lot of money owed. If you have a 2022 vehicle that's owed $50,000 on it, you're probably not going to get a lean release as long as the vehicle is older, even if it has a lot of money on it. If the lean is delinquent, charge it off right away. Many times, the lean holder just signs it. In addition, the way we do it is to send it to multiple locations for that leanholder because all you need is one of them. If you just send it to one place, that person might throw it in the trash. If you send it to four or five places, we send it to up to five. All it takes is for one of them, some secretary clerk administrative person, to sign it and mail it back to you. This increases the probability that you're going to get that lean release because if you don't get that lean release, you're in big trouble because you have to either forget about the car or you have to go to plan B. What is Plan B? Well, here's Plan B.

Plan B is that you have to do a court order title, and here's an example. This happens to be from a county in Ohio. It's a court-ordered certificate of title. You have to fill out an affidavit, a journal entry, a docket request, an affidavit of facts, and a petition that must also be typed up and submitted to the court. Now if there's a lean on it they're going to ask you did you try to contact the lean holder so you can show you already did this you don't want to start with the court order title if there's a lean on it if you know there's a lean at least go out of your way to try to have documentation not that you called or emailed but you actually mailed something to the lean holder if you can have proof of that now the court it's going to be on your side cuz they say well the the bank doesn't want anything to do with it they didn't you know send any reply back so the court will then step in use this as a backup method it's very powerful because if you don't get the lean release from the lean holder the court can override that with the DMV use these as methods you can use to get that lean off the title record the DMV can't do it without having one of these two forms either the lean release from the bank or the court order from the to court without one of those two things the hands are tied of the DMV they're not allowed to remove a lean just based on some receipt you show you paid for it or your verbal statement they can't do that they have to go by what the law says it seems like they're giving you the runaround but in reality they are following their own rules so try to get the lean release maybe wait you know 7 to 10 days if you don't get it back then start your court order process and the court order process is not that bad it's some documents you have to fill out the one thing about court is they're very picky about the documents making sure everything's eyes are dotted te's are crossed everything's done the right way if anything is off they'll just reject it so you want to make sure it's done right and we also recommend don't bring it to the court directly mail it to the court if you bring it directly the clerk might look at this and say well I you know we don't know what to do with this sometimes clerks don't know exactly what's going on behind the scenes and if you bring it in they could turn you away if you mail it there's nobody there for them to argue with right they just file it with the court and let the judge or the magistrate deal with it if you're there they can kind of try to deflect things you know most courts are overloaded so they are told unofficially to not do as many cases as possible nothing wrong with the courts not doing anything wrong they're just trying to keep junk cases from showing up but court ordered title cases are actually good for the court because they're administrative it's not like a big Law and Order Jack McCoy kind of thing where you have to go in and do a big case it's all administrative it's all done with paperwork so those cases the courts are are are comfortable with but the clerk may not know that so don't leave it the Chance by walking in the door and saying here's what I got remember the court can also not help you with any of the paperwork how do we know that well they tell you look right here they say the Court's office is not permitted to give legal advice distribute forms assist in completion of any form submitted to the court so they tell you right there and that's pretty much across the board every state has that they can't assist in the completions of the documents you have to have them all done when you walk in the door you can't come in empty-handed so try your lean release or if it's a um a clear title try your prior owner contact if those fail keep your documentation that you tried and then let the court be on your side this is one example where the court is your friend they're not against you they're not trying to harm you you they're not trying to jam you up the court is trying to help you deal with the bureaucracy of the DMV and if you can get them on your side that's there's no more powerful Ally in the world than the court and you want to have that um that tool in your toolbox because a DMV you know as much as they want to help it's a bureaucracy it's a punch line of jokes on on sitcoms and you don't want to be subject to that if you don't have to you also have the option in some states of doing a bonded title that's a subject for other videos make sure you subscribe to our Channel go through our whole Library we have an extensive video library with videos about many many subjects of getting a title instructions for some of these processes and if you want more information you can check out our website cartitles.com or book of consultation with a certified title agent.