Buying 4R with a lien on it.

The bank does not own the vehicle either. They just keep the legal rights of deciding what to do with the vehicle in the events that payments are not made (breach of contract). If they owned the vehicle they could, by definition, do whatever they want with it, including driving it or selling it for no apparent reasons

 

a lien is created as soon as you finance a car. In most states that means the lender holds the car's title and is considered the vehicle's legal owner until the loan is paid in full. The lien protects the lender and allows them to repossess the car if the borrower stops making payments.

Legally, the lienholder listed on your car title is the owner of the vehicle

 

A lien grants legal rights to the lender (such as repossessing the car in case of breach of contract, like I said). In no way does that translates to ownership. The owner remains the person that is financing the car (unless there is breach of contract then lienholder becomes the owner)

 

So 2 actual questions..... Financing sounds different than a lien from an unpaid repair shop bill. I'm not in anyway in the banking industry and know the difference.

Why does the financer hold the title then until paid off? ( Like the deed to your house)

Why does the insurance pay the financer if you wreck your vehicle instead if they are not the owner?

 

Yes that called a mechanics lien. A lot of shops will try to enforce that for unpaid repairs.

Title/insurance payoff: the financing bank owns the vehicle not the driver of it when its still being financed. They are named loss payee in that scenario. You dont legally “own” (free and clear title)your car outright until its paid off with the bank.

a lot of people confuse being the owner of the car vs the registered owner of the the car. You only own the car when your name is on the title.

 

That doesn’t disprove anything I said.

With a lien, you are not the owner.

If you were, you could take the property regardless of whether the loan was performing.

You’re actually proving my point, because you are agreeing that the lien holder can only take possession of the property in conjunction with a breach of contract.

Your numbers are off when it comes to timing, at least when it comes to homes. For a home, when you are 60 days past due, you will receive a notice of default. Once you hit 180 days, the entity servicing the loan can begin the proceedings to foreclose, absent any requirements by the investor or regulations to engage in loss mitigation efforts. That process may or may not go through the court system. Only after the process is done has title (ownership) of the property passed out of the hands of the borrower.

What’s more, you are not totally correct about being able to pursue for deficiency judgements. For example, mortgage debt in the state of California is non-recourse if the debt was incurred for the purposes of purchasing a home.

At any rate, none of this changes the fact that a lien is a distinct legal concept from ownership.

 

Mechanics liens and liens coming from financing have the same impact - they result in an encumbered title, which means that you need to clear them in order to have good and merchantable title.

Lenders will often hold the paper title as a way to protect against fraud. In some states, title is handled totally electronically which makes this a non issue.

You are not 100% correct on insurance paying the lender. If I get into a wreck, I can work directly with my insurance on payment for repairs. The check will get sent directly to your lender if the car is totaled, but that’s because the insurance company is buying the car from you.

In the case of a house, your homeowners insurance will put your mortgage servicer’s name on the check as well. This is something you agree to as a borrower.

What this means is that the insurance payment for your roof will often get impounded by your lender so that they can make sure the repairs are actually done.

But not always.

If you have enough equity, you can sometimes get the check endorsed by your lender(s) so that you don’t have to deal with a servicer (or subservicer) to get the repairs paid for.

 

And yet my name is on the title while there is a lien.

I know this because I have received paper copies of my title when I have extinguished the lien and is the original document issued.

 

I’m not off in my timing, when your contract goes into default you receive a default notice. from my bank you have 10 days to cure the default once the demand is made. we can also take your car for not having proper insurance coverage which has nothing to do if you’re paying your car on time or not.

Foreclosure proceedings can start as early 120 days past due

do me a favor call your bank up and ask them who has legal ownership of the vehicle while you are financing a contract.

in short they’ll tell you when you are financing a vehicle, the lender or finance company holds legal ownership of the car until you have fully paid off the loan, meaning they are considered the legal owner until the contract is completely settled; you are only considered the registered “owner” while making payments.

it’s been fun talking about this, but it’s time to watch some football and drink some beer. Enjoy the rest of your day, fellas and gals.

 

I mean, you’re legally wrong.

If you were right, you would need the bank’s permission to mod your vehicle.

If you were right, the a secured loan would be the same thing as a lease.

If you were right, the bank would include your vehicle on its balance sheet as an asset, and take depreciation for it.

But you’re absolutely wrong.

 

Yep youre right, i guess ive been doing things wrong for the past 28 yrs and the hundreds of successful arbs and trials i’ve testified obo my financing bank. Dont leak this out to the judges.

 

I won’t.

 

just curious, whats your occupation.

 

It’s complicated, but let’s call it a few decades in finance with a lot of it focused on everything that ends up going wrong.

I’m one of the few people that looks back fondly on the Great Recession as it did wonders for my career.

I’ve run the gamut from arguing over a single loan where the difference was whether there was negligence or misrepresentation, all the way up to submitting a wire request for over $250 million to settle things out.

I’m one of the few people I know that willingly reads contracts and regulations. The devil is in the details, and the black letter writing is always more important than how it should work.

My hobbies include making it a pain in the ass when companies don’t work with me on things related to my own personal situation!

 

Nice, sounds like you have a lot of seat time in the court room as well…. Thats the great thing about commerical/consumer lending, the banks are not obligated to work with you. A lot of people and companies forget that they owe the bank the money and the bank makes the rules, not the other way around. This also applies in the court room. Love watching a defendent or opposing counsel try to tell a judge how to do their job. Usually doesnt end well for that side.

 

Ok, I’m a moron

 

You can edit the title to avoid any more scrutiny. Or, leave it up for the jokes.

 

I appreciate it but I was distracted and used the wrong word. ‍♂️ I’ll take the heat.
Unfortunately going to the credit union together isn’t a practical option, the seller moved from Wyoming and the credit union, the one with the LIEN on the vehicle, is in Laramie, WY and we’re in the Florida Panhandle. But I called the credit union, using a number I got from their website, was directed to a nice lady that was aware of the situation, whose name is also on their website. I believe we got it figured out.
I appreciate everyone’s input but feel free to keep arguing about the definition of lien and roast away at my use of lean instead of lien. I’d love to know a fix for a 4Runner lien to either the driver’s or passenger’s side and more about the legal ins and outs of a lean on my vehicle.

 

for the lean, Bilstein 6112 set at #6 clip on driver and 4 on passenger side. For the other lien, the retainer on this matter is used up. Lol!

 

I’ve managed to avoid having to go to court, as much of what I’ve done has been with an eye to avoiding that.

I mean, external counsel still makes a boatload either way. My favorite was being on a conference call where you couldn’t hear the top dog because the wind was blowing too hard while he was on his yacht.

 

I'm not an attorney, but I watched a couple of seasons of better call Saul, and that sounds right.

 

As far as the ongoing debate about whether or not a lien holder actually owns the house, car, etc:

I'm not going to argue either way. But, if the bank technically owns my car, how is it possible for me to sell it without their permission?

 

technically you do need their permission and that permission is a buyout quote provided by the bank that is usually good for 30 days and their OK to sell. If you dont get that it could be viewed a breach of the terms and conditions of the contract. And if the payoff amount is short paid, seen that happen plenty of times, the title is not released and you and the 3rd party buyer is responsible to sort out the short pay before any title is released. It protects the bank.

 

I would not equate a buyout quote to permission. That's just the bank telling me how much I have to pay them to satisfy the loan. They have no say in whether or not I choose to sell it.

 

you missed the part where I said “and their OK to sell”.

you don’t want it to be viewed as a sale out of trust by the lender. Which means you don’t use the proceeds to pay off the loan. You’d be surprised how many people do that in a private sale.

 

I didn't miss that. Having to satisfy a debt in order to sell something isn't the same as needing permission.

 

All I know, if I don’t pay my loan, the place I borrowed my money from can take my shit.

 

some lenders require it and some dont. My bank is one that does

 

So, you are saying that if somebody has a mortgage or auto loan through your bank, they are not allowed to sell their home or vehicle without the bank's permission? I have never heard of such a thing.

 

Correct, thats what i said.

People should reach out to their lender before attempting to sell a financed car to understand their specific procedures for title transfer and payoff requirements.

just because you haven’t heard of something doesn’t mean it doesn’t exist