The Expert Podcast

…Many many times the inquiry we get has to do with a vehicle that's been paid off A loan has been paid, but there's still a lien holder showing on the vehicle title This happens. A hundred 200 times a day We hear the same story where a client has purchased a vehicle Many years ago, they had a car loan they paid off all their payments and then. Later they don't have their title and there's still a lien on the title record We'll get into how that happens But yeah this type of story even makes the news At some cases this is out of North Carolina where. A person did not. Have the ability to drive their car because they couldn't get a title. Because the lien holder did not clear the lien notes per title for more than a year kept car parked. For triangle travel and neuro this is an out of North Carolina but the car came from California. Let's take a look at what happened. Well it starts out where she moved from North Carolina to California because she moved for a nursing job. The North Carolina DMV rep said. that the title was forwarded to California. Once you checked with California they told her that they sent it to North Carolina So they basically went back and forth Look, This happens a lot with department of motor vehicles It's not that the employees are trying to mislead you or incompetent or inept it's just that. You know government agencies are very overworked understaffed under budgeted. So a lot of times there's difference. differences of procedures from one agency to another So once you start going back and forth between different states, you can run into a lot of problems. In fact the California DMV says it does not receive or send timely documents to DMVs and other states it's up to the register owner to do that…So. She went back to North Carolina and they say yeah you're right We sent it to California but it was returned as unclaimed. So how does this happen How do titles get messed up for paid off leans Well here's the mechanics of how a lien release has done. If you have a loan on your vehicle. And you pay all your payments You pay your last payment to the bank. And what they do is they take your vehicle title that they have in their drawer. Or to file cabinet. They stamp it pay they sign it and they mail it to you. What they don't do. It's clear the lien from the title record. And you might think well shouldn't that happen automatically Well, not really because the lender and the DMV or the tiling authority are two different agencies. Your lender is not the person who issues a title. The department of motor vehicles or whatever the name of the agency in your state. That issue's titles. They're the ones who actually update title records. So the bank knows that you have a zero balance on your loan That's fine. But the DMV does not know that you paid off your loan until the bank tells them. The bank normally doesn't tell the DMV They tell you they signed the title stamp it paid. Sometimes we'll give you a lien. document a separate form. That tells you your loan is paid and you might think, well that's great My loan is paid. Not so fast. The DMV who is holding your title record. Does not know this event happened yet. The department the bank normally doesn't tell them Here's why, because in order to do that, you have to pay a fee You have to file some forms and you have to update the records. It's not an excessive amount of money but it might take 30 40 $50 to change the title. It also takes some labor to fill out the forms and file it with the DMV. Now let me ask you this. Do you like dealing with the DMV? Do you know how long it takes to work with that bureaucracy? Well imagine you're a bank and you have to do a thousand of those a day. So instead of allocating extra resources and employees to do all this, they just stamp the title paid sign it mail it to you. Now, as long as you have that title in your hands, You're good. If you need to sell it, you're good. But what if you lose that title What if it never gets to you now? You're in limbo because you noted loan is paid Bank knows the loan is paid. DMV does not loan No the loan is paid. So what we recommend doing is as soon as you get that lien release or that title, take it right down to your titling authority. Change the title record to reflect There is no more loan on that vehicle There's no more lien on that vehicle. That way, no matter what happens in the future your title is clear…If you're in a position where. Too late. You lost a title you didn't get the paperwork from the bank And now you're trying to sell your car Maybe move to another state Maybe you already moved to another state and that state doesn't have your updated title record. Well now you have a problem Now you have to go back to that lien holder. To get a new document showing that they say the loan is clear because. The DMV is not going to take your word for it. Even though it might be 10 years old. That car, the loan might be 10 or 15 years old. The DMV is not allowed by law to remove a lien claim on a vehicle. Just based on the owner saying there's no more lien, because if that was the case then any owner who didn't want to pay their car loan could just call the DMV and say Hey, my loan is paid off, take it off my title record. So they can't do that. They have to leave it on there until they get a formal written document from the lien holder. And we're dealing with this. Every day dozens of times per day. I have a case of working on right now. Where a major auto manufacturer lien. holder. Is, having difficulty coming up with a lien release And in fact this case may have to go to court. I may have to do a court order title. Because there's a lot of errors on that lien record. There's probably even two liens on the vehicle. So. If you're watching this. And you are. In a position where you have a vehicle maybe you have a loan Maybe you bought it from somebody with a loan and you need to clear that lane. It's very important that you do it a certain way. Don't call up the bank or the lien holder to ask them to remove it because it won't get done They might say they'll do it but then they won't Or they might just say we can't do it Go Go to the website. Whatever. Did they just want to get you out of their hair? The reason why is because banks don't have staff. That is dedicated to removing liens from…title records they don't have staff for that. So what you have to do is you have to do it. Most of the work for them, you fill out the forms you prepare them. And mail it to them. Certified mail registered mail, priority mail something with tracking so that you know that they got it…Because there's an employee there that can at least sign something. There's probably not a staff at that bank that can fill out all the forms find the right forms First of all every state has a different form, so they have to find it. So you might have to do some of the legwork so that it makes it easy for you…If you need more assistance on this we have some videos that will give you instructions But…the most important thing to keep in mind is. Lien releases do not happen automatically when you pay your last payment. The bank doesn't clear it from the title records. In some states on newer vehicles there might be an electronic lane that gets clear but even that a lot of times we find there's errors. If you've moved to a different state, That throws it. Out of whack too. If you got. A loan one year before you paid off you moved to a different state. Now both states have conflicting records, so you're going to run into problems. It's something that is very common Their solutions for this video is not really. The instructional part our other videos give you the instructions on how to do that. This is to tell you why it happens, how it happens, and the fact that it's not an uncommon thing that. They're singling you out This happens all the time.