Lienholder never put on vehicle title; clear title sent to me by mistake. What are my rights?
Question Details:
I bought my car through dealer credit, and a couple of years later refinanced with a bank. The bank never put their name on the title, the dealer sent the state a payoff letter, and the state sent the title to me. I have been paying on the loan for 3 years and they just called me saying they need the title to secure their interest in the vehicle. Should I send them the title even though they are not on it and it shows clear and in my name? Do I legally have to keep repaying the loan when they technically have no collateral And/or can I legally sell the vehicle?
The still have an equitable lien. Don't take advantage of a person's mistake. Do the right thing and send them the title and keep paying the loan.
Keith Kanouse, Boca Raton, FL
The bottom line here depends on the loan agreement for your refinance, whether it requires the lien or not; I'd be very surprised if it doesn't (usually, law firms that work for banks don't miss basics like this, or they don't work for banks for very long).
You do have to keep repaying the loan. If you stop before it's paid off, the bank will go to court to get their lien on the car and ultimately repossess it. They can probably go to court to force you to give them the lien, anyway, even before default. Without reading your loan papers, I can't tell you that there's nothing the bank can do; it's possible that refusing to cooperate with putting the lien on the title could be seen as a default under the loan, which is someplace you don't want to go.
