I've got yet another question about titles...

A friend has a car and he's going to make his last payment this week. He will get a Notice of Lien Satisfied. However, someone told him that the lien will always be shown on the vehicle title even though he submits it to the DMV.

Is this true? Or does he have to get a NEW clear title and have the old satisfied lien holder completely removed? Is this even possible?

 

The lien holder releases the lien and he gets the title. The title is clear at that point he does not need to do anything. The title will have a lien holders section and the former lien holder will have signed the lien off. some states require it to be notarized and it will be.

 

The lien SHOULD clear, but I would do a credit check just to be sure the lien is cleared. Also, your friend should receive the title free and clear.

 

He will receive the title and it will show the lien on the vehicle; however, the release of that lien will be signed off on. Now if he lost the title, the dept of motor vehicles would still show the lien existing. It may not be a bad idea to file for a duplicate title that will not have a lien. That way the dept of motor vehicles will have their file updated.

 

In theory it should be that way.

However, I looked back at my '99 F150 and it still showed a lien holder against it even though I knew it was payed off.

What I'm saying is that since the lien has been paid in full, there shouldn't be any record of a lien holders listed? Right?

Say in this circumstance: I bought the truck with the help from a bank. I pay the truck off. I get the nifty Mv-901 from the bank which declares to the DMV that the truck is now totally mine. So the truck is totally mine. Why does the DMV say that there is still a lien? Do I need to get a new title? Or do I need to clear it by using legal (brute force) means?

In reality, the DMV has no right keeping a past lien on record of the vehicle if it has been fully satisfied by submitting a Mv-901 from the bank.

Added more:


How to Remove a Lienholder from a Title Certificate
How do I get a title certificate that does not list a lien?
When you get a loan for a vehicle, the loan company normally gets a lien against the title certificate. The loan company becomes a lienholder, and the name and the address of the lienholder are listed on the certificate and the DMV records.

To remove a lien, you must pay the loan and get proof from the lienholder that the lien is satisfied. You must send the original title certificate and the proof to the DMV Title Services Bureau, or apply at a DMV office. There are two acceptable proofs that you can provide:

The lienholder can send you form MV-901 (Notice of Recorded Lien). An authorized officer of the lienholder must sign the form and indicate that the lien is satisfied.

The lienholder can prepare a letter. The lienholder must print the letter on the official letterhead of the loan company, and an authorized officer must sign the letter. The letter must identify the vehicle and indicate that the lien is satisfied. If the lienholder is a person and not a loan company, the letter must be notarized.

There is a fee of $20 to remove a lien from a NYS title certificate.

Send your current title certificate, the original proof that the lien was satisfied, and a check or money order for $20 payable to "Commissioner of Motor Vehicles" to the address below. The DMV does not accept a photocopy of the proof that the lien was satisfied. In approximately 60 to 90 days, the DMV sends you in the mail a title certificate that does not list the lien. The title certificate must be mailed to you; a DMV office cannot give you the title certificate.

Lien Release
NYSDMV Title Services
Department of Motor Vehicles
6 Empire State Plaza
Albany, NY 12228-0331

Secondly... can I make the bank pay the $20 fee to remove the lien from the title certificate? Or have it exempted?

Why? --

That is considered a penalty in my mind for using a bank to finance an automobile.

My justification is the fact that the bank had the lien put against the vehicle, it should be their responsibility to pay any necessary fees to have THEIR name removed from MY title. Espeically as they got their payment in interest already. For example.

 

I guess we are lucky here in Texas. I just got my title. It is the original with a signature from Bank of America releasing the lien. It took 3 days.

 

In MO, you get a title right away and it has the lien holder listed on the title under "Liens". Once it's paid off, you get a certified & notarized letter from the bank stating it's been paid off. No new title unless you send off for one, which costs money.

 

Why do you feel it's necessary to have this completely removed? With the MV-901, he shouldn't have any problem selling the vehicle.

 

As in most states, the lien will remain on the DMV's records until it is cleared with them and a new title is issued. That said, there really shouldn't be a big deal as long as you don't lose the title or documentation the lien is released.

A long time ago I bought a car from a buddy of mine that lost the title to the vehicle. We had to contact the lienholder to get a letter indicating the vehicle was paid in full and the lien was satisified. Then we had to file for him to get a a replacement title. Then I was able to get the new title.

I guess you are paying the $20 to have a clean title and the record updated with the DMV. Just the cost of not paying cash for the vehicle I guess.

 

He's got a new Mustang and now he's regretting that he financed around $5,000 of it and paid it off in 8 months.

He will never sell the vehicle. In fact, if he could, he'd rip the title up just so he couldn't.

Well here's the thing... does the bank still have a copy of the vehicle title with a lien listed?

Does the DMV have a copy of the title with a lien listed -- even if it is cleared?

I guess the fact of the matter is that he doesn't want to have any trace records back to a bank or what is known as a "lien holder". Is there a way to legally clear this up?

Mind you, he can lawyer up quick.

He just doesn't want to look like an idiot -- which I don't blame him.

 

I assume you're talking about NY. Can't answer for NY, they'll have to speak for themselves, but in Cal. it's pretty simple. Once paid off, it's signed off by the bank as the lien holder and generally stamped as such also. If you want the lien off the title once it's paid off, gonna cost you at least $20. to run it through Sacramento and get a new title with no lienholder showing. State doesn't give a rats patoot, if the paperwork and signature are there showing it's been paid off, they give you a clear title as though it never had a lien on it. I generally pay cash for my vehicle purchases but I did finance the minimum twice to take advantage of the rebates for financing with Ford Credit. As soon as the 2 months , or whatever were up so that the dealer didn't get gigged, paid them off and cleared the title by ordering a new clear title from Sacramento. I can't imagine a reason in the world why the state would want to keep the lienholder on the title when it's been paid off. Unless in NY they use a LOT of drugs and that seems logical to them.

 

That's exactly what my friend did.

He did talk to his lawyer, and the DMV does keep a record that the vehicle did have a lien at one point or another. He can get a so-called "clear" title for $20, but if you do a CarFax or AutoCheck, it will still show that it had a lien and what bank he used to finance it. He said the only way to fight it is if he can get he bank to basically say that he really didn't finance it. Which I have no clue how the heck he'd go about doing that.

Why the heck does the NYSDMV care about "past lien holders" on titles so much?

 

Manual- Maybe the last sentence in my post wasn't so much "tongue-in-cheek" after all. Also was no big deal for me, can't even imagine why it is for him. Why in the world would anyone even look at the lien holder info even if it is on the Carfax? Have no life would be my 1st guess, and probably my 2nd and 3rd also! That person's world has to be about the size of a pea.