The Government Can Help Regulate Your Car Loan Balance

Understanding Excessive Automotive Charges
So, what are some things that you can do to combat excessive automotive charges? If you’ve purchased a vehicle from a dealer, many times there were add-ons and things tacked on to your loan that were not proper. Maybe added on by the dealer, maybe added on by the lender. Where did that put you? That may have put you in a position where you owe more on that car than it’s worth. You have negative equity. You have upside down, underwater—they call it different things. Basically, what it means is you owe more on that car than it’s actually worth. End of story. And it makes you buried in that car where you can’t get out of it. You can’t sell it. You can’t trade it in. The way dealers refer to it, they say you have a firm grip on that car. You can’t let go of that car. And that could be a problem for you. Maybe your payment’s too high. Maybe that car no longer suits your needs. Maybe you need a truck to haul things and you have a car. Maybe you have a sedan and you need a van because now you have kids. There are a lot of reasons why you need to get out of that car.

FTC’s Role in Car Purchase Protection
So, what does the FTC say about this? The FTC is a government agency called the Federal Trade Commission. They have a cars rule that requires certain things to happen on a purchase. And if it didn’t happen, you may have some recourse. And this is one of the things that we look at when we do a car short sale. You can take a look at the link below for more information about doing car short sale services and the instructions. But basically, this is from the FTC. This is a bulletin that’s a guide for car dealers. It tells dealers what to do and what not to do. And it has that in the guide. So remember, this is an insider internal guide for car dealers to know what they have to do. And a lot of times they don’t do this. It lays out principles to protect people shopping for cars and trucks—practices that are already business as usual for honest dealers.

Dealer Conduct and FTC Guidelines
Here are the practices. It prohibits misrepresentations. It requires dealers to clearly disclose the price, the actual price you can pay to get the car. It’s illegal—this is important—to charge consumers for add-ons that don’t provide a benefit. You probably have add-ons on your finance contract that didn’t provide you any benefit. You also have to get express informed consent before charging for anything. There are probably things you were charged for that you did not give consent for, especially informed consent. They may have put something in front of you.

Examples of Violations That Could Offer Recourse
So, let’s take a look at a couple of basic examples of what these types of problems could be for the dealer that could give you recourse. So, here is a more detailed breakdown of those four things. It prohibits misrepresentation. It makes it illegal for a dealer to make misrepresentations about topics that would affect consumers’ buying choices. So, when you bought your vehicle, were you misrepresented about things that were important for you to know about your buying choice? Deceptive claims about price, financing, or add-ons are examples. What add-ons did you get? Were you given proper information?

Add-Ons and Lack of Benefit
We’ll skip number two because that’s more about pricing. It makes it illegal for dealers to charge consumers for add-ons that don’t provide a benefit. If the consumer, meaning you, won’t benefit from an add-on, the dealer can’t charge for it. There are probably a lot of things on your vehicle that were add-ons. You have to get, as a dealer, consent before charging for anything. No surprise fees, no hidden charges. Dealers must get a clear and informed yes to what they’re buying and how much they’re being charged for.

Loan Balance and Improper Charges
I’m pretty sure that part of your loan balance that you owe on that car that’s upside down or out of equity are things that were charged improperly. Don’t you think? Remember, this is a federal government rule. This is a big win for consumers. You can expect established standards of truth and transparency. That’s what this is all about. This comes from the federal government.

Disclosure Requirements
And here’s the key. These add-ons that are put on top of vehicle price are not required. And the dealer has to tell you they’re not required. So, if they put on any kind of protection package or service contract, sometimes they’ll tell you it’s required. When making any representation, the dealer must clearly disclose it’s not required and the customer can buy or lease the vehicle without the add-on. The disclosure must be in writing. So, this is a big deal. Sometimes your loan amount might be 10 or 15% of it could be from these add-ons. In some cases, things like gap insurance.

Informed Consent and Documentation
When they charge you an amount of money, so if your vehicle is totaled, you don’t have to pay the negative equity, it would be illegal to charge that if there are certain exclusions built into it that don’t benefit you. This is a very important factor that a lot of people don’t know about. And here’s the big one. They have to get your informed consent about these add-ons, what the charge is for, how much it is, and how it benefits you. All the fees and costs will be charged over the period of repayment, meaning that if there’s interest on this add-on, they have to tell you about that, too.

Illegal Conduct and FTC Standards
There’s a lot of illegal conduct according to the FTC, meaning that if the document has a pre-checked box or if it distracts you from knowing what you’re getting into, if they’re talking to you or they show you something else while you have to sign it, you have to have a fully informed yes before the business can charge you. And they have to keep records of that. So, if they don’t have the records, it’s invalid.

Clear Language and Visual Requirements
Visual disclosures, fine print, dense blocks of text, or language hidden where consumers aren’t likely to see it, won’t meet the FTC’s clear and conspicuous standard. So, if you have contracts with fine print that tells you your limitations that’s smaller than where it tells you what’s good about it, it doesn’t work. And they’re going to look at things like how big the text is. Does it contrast with the background? Is it the same color as the background? Is it located where consumers will easily see it? And if it doesn’t, it doesn’t qualify.

Plain Language and No Jargon
Most importantly, it has to be in plain language. It must use words and grammar understandable to ordinary consumers. They can’t rely on the fact that you don’t understand it. So if they use industry jargon, double talk, it does not meet that standard. So let’s take a look at your paperwork to see how they worded the disclosures. Is it valid?

Waiving Rights is Prohibited
And you might think, well, the dealership made me waive my rights. They answer that question. What if a car buyer agrees to waive their protections? The rule expressly prohibits that. It’s a violation of the rule for anyone to even attempt to obtain a waiver of these protections. So, if the car dealer says, “Well, you waived your rights,” they can’t do that. They have to keep records. They have to keep records that they did all this in writing, documented for at least 24 months, probably longer depending on your state. They also have to keep records that the add-ons meet the requirements, copies of all service contracts, gap insurance, loan-to-value ratios. They have to keep everything. And if they don’t keep it, again, it’s void.

Conclusion and Consumer Action Steps
So, this is right from the horse’s mouth from the Federal Trade Commission. These are all things you need to know about when it comes to looking at methods to try to get out of your car loan. Look, you’re not going to get the car for free, right? But if you do have a vehicle you need to get rid of and maybe you owe more on it than it’s worth, these are ways you can reduce some of your principal, maybe work on getting some bids on the car that are higher. And we can work on both of those to help you get out of your car loan, sell the car to a retail buyer, or pay it off with a reduced principal and be able to get that excessive high car loan off of your monthly payment.

Final Note and Related Videos
Again, it’s no magic bullet. It doesn’t get you a free car. It doesn’t magically get your payment erased, but you have to do a little bit of work, request things, do some due diligence, file some documents, and you can attempt to make your vehicle balance be reduced so that it’s closer to what the car might be worth.

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What Is A Court Ordered Title?

What Is a Court-Ordered Title?
So, what exactly is a court-ordered title? A court-ordered title is a process in order to get a vehicle title certificate. Let’s say you bought a vehicle maybe on Craigslist or Facebook somewhere and you didn’t get the title. Maybe the seller didn’t have a certificate to give you and you try to go to the Department of Motor Vehicles or your titling agency in your state and they tell you, “No, you don’t have the right paperwork. You can’t get a title because you don’t have the last title signed over to you.” Or maybe you have it, but there’s something wrong with it.

What Is the Process Like?
What you can do is what’s called a court order title. Now, some states and counties call it a different name. They might call it a declaratory judgment or a mandamus or some other methods. And it’s a process where you file a petition in the county court where you live to have the court declare you to be the owner of the vehicle by court order. Then you bring that to the DMV and they give you a title. Now, this is an example of a document that’s created.

County-Specific Documents
For one particular county in Florida. The only bad news is the counties and the government agencies don’t have pre-made forms, right? There are three counties in the country that have some forms in Ohio. Everything else you have to do it from scratch. So you have to know how to structure this document. But the courts do know how to do these. But the problem is they can’t help you. If you go into the court and say, “Hey, I want to do a court order title.” First of all, the clerk at the window, they’re not going to know what you’re talking about because that clerk handles thousands of cases every month. And every case is different: court order titles, dog bite lawsuits, you know, my fence is too high, the divorce case, small claims court, all these different cases. So, they don’t have specific knowledge of every single type of case that comes across their desk. The clerk doesn’t do that. So you have to tell them what you want. You have to write the words.

Example Form Breakdown
And if you look at this form, it says, “Complaint for judgment.” It says that this is an action requesting a judgment involving the acquisition of a clear title for a [blank]. The plaintiff is a resident of county and so and so. And every county will have a different format for this. You’ll have to put the VIN. Look at number six. The VIN number is this. Number five, you say on this date I purchased a vehicle. And number eight, you have to tell them what actions you’ve taken to secure the title. So, you’re going to have to figure out how to put together these words. This works for certain counties the way this is structured. Other places have different requirements. But that’s what a court order title is.

Why Use a Court Order Title?
It’s like going over the head of the DMV, kind of going over their authority because the DMV, even if they wanted to give you a title, unless you bring them the old title, they’re not allowed to. But by using this process, going to their authority figure, which is the court, you can get a declaratory judgment that the court will provide to you to help the DMV give you what you want. Now, when you hear this, a lot of people think, well, is this going to be a big deal? Do I have to go to court? Is it a big hearing? Look, this is not like what you see on TV, you know, where they have a big court case like My Cousin Vinny, where there’s a judge and a jury and people. It’s not like a big thing.

It’s Not a Big Court Case
In fact, in most cases, you never have to go to court. You mail this in, let the court handle it. It’s an administrative process. They do it in the office and they mail you your documents. Sometimes they’ll even file it with the DMV for you. And there’s a way you can make that more probable.

Submitting Your Documents
Also, when it comes time to submit this document to the court, you do not want to bring it in person. What you want to do is mail it to them. And there’s a lot of reasons why, but you want to mail it to them.

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More Montana LLCs Under Enforcement

Crackdown on Montana LLCs
Breaking news. Keep an eye on this channel. This is an older article from about six months ago where California was cracking down on Montana LLCs.

State Consortium Joins the Crackdown
But there’s some news. There’s a group of states, a consortium of other states that have piggybacked on what California did. California was very successful in cracking down on these illegal Montana LLC titles and registrations.

Illegal Use and State Response
What makes it illegal is people are using it to avoid sales tax, to avoid title requirements, to avoid registration requirements such as emissions, inspections, and a whole number of other things.

Enforcement and Prosecutions
When the states started finding out about this a few years ago, they didn’t know what to do. Well, California figured out what to do. They actually came up with a system to trace these vehicles, trace them back to the owner who lives in their state, and they busted a bunch of people.

Expansion of Enforcement
A group of other states, about 28 states have joined in now, and they’re copying the same thing. So over the next few months, you’re going to see a whole bunch of rollouts of prosecutions, regulation, and enforcement against these plates.

Legal Issues for Non-Residents
A lot of people think it’s legal because it’s legal to get a registration in Montana, which is legal in Montana. The problem is if you are a resident of another state and you title it out of state in Montana through an LLC, you’re more than likely violating your state laws on taxes, on registering a vehicle in your state, and on avoiding different types of requirements.

ALPR and Tracking
How do they find you? Well, there are a number of ways they do, but here’s one of them. They have what’s called ALPR—license plate readers. They’re cameras all over the place. They’re on street signs. They’re in parking lots. They’re on police cars. They’re on taxi cabs. They’re everywhere.

Enforcement Tactics
They’re monitoring every plate that drives by. If they see a Montana plate go by on a regular basis over the course of a few weeks or a few months, they know that’s not just somebody visiting the state from Montana on vacation.

Investigation and Consequences
So if, let’s say, you live in Texas and you have a Montana LLC license plate, they’re going to see that plate go past a certain place on your way to work or at a gas station. Then what they’re going to do is file a request for the records of that license plate in Montana.

State Responses and Future Developments
If they see it’s under an LLC, they’re going to back-trace the LLC and they know where you go because you drive by the same intersection every day. They’re going to have you pulled over and they’re going to do an investigation—this is what they did in California.

Future Developments and Advice
They’re going to charge you with back taxes, penalties, revoke your plate, maybe revoke your title, and in some cases even seize your vehicle. So keep an eye on this channel for some news coming out over the next few weeks or months where these other states—we’re hearing feedback from the DMV commissioners and their offices—other states are following the lead of California and getting rid of this so-called loophole about getting license plates.

Resolution and Further Information
Remember, if you have a vehicle title problem, there are many easier ways than doing the Montana process. It may seem like it’s appealing because you’re doing some kind of backdoor loophole, but it really takes more time and costs more money than just going through a process in your state.

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Court Ordered Title Process Advancements

Court Ordered Title Process Progress
Over the past few years, our efforts in making the court ordered title process more conspicuous with government agencies have paid off. Many states are now having their DMV offices give this information out when the person arrives without proper paperwork. It used to be that if you went to the DMV and you didn’t have the right paperwork—you didn’t have the old title—the DMV would just say, “You’ve got to get out of here. There’s nothing we can do for you.” So, if you don’t have the old title certificate, you have to fix it on your own. Now, the DMVs are more familiar with the court order process.

Court Order in State Law
In fact, some states—like here’s an example from Washington—are starting to put this into their state law. So, this is their statute 30856A-320, transfer by court order. It tells you what information the DMV has to get. They have to get the full name of the person the property’s awarded to, meaning what name is on the new title. A description of the vehicle validation. The court order is filed and then the final judgment. So, this is very good progress. More and more states are starting to do this.

DMV Guidance and Court Order Power
It’ll give you the confidence that your DMV now will guide you in the right direction rather than just giving you the runaround and saying no, you can’t get a title. The court order is what solves all these problems. It’s when you can’t do a bonded title or you don’t want to do a bonded title. It’s a very powerful process. It kind of overrides the DMV, but more and more states and more and more DMV offices are starting to guide and direct their clients to the court order process.

To find out more about the Court Order Title Process, Click here

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Criminal Crackdown On Montana LLC Fraud – Breaking News

BREAKING NEWS ON MONTANA LLC TAX LOOPHOLE
Well, here it is. The big breaking news on the Montana LLC loophole kind of tax evasion. If you’ve been watching our channel for any length of time, you know we’ve been reporting on this Montana LLC title process that’s been used really going back five or six years now. And if you notice, we’ve mentioned that many DMV commissioners have been talking amongst themselves about doing a big crackdown, a big bust of the people that are using this process. And in the internal meetings, they’re mentioning putting together task force operations and starting to do monitoring and enforcement.

CRACKDOWN CONFIRMED BY MAJOR PUBLICATION
Well, big breaking news today out of Car and Driver Magazine, major publication, friends of the channel. We’ve actually been featured in their magazine before that there’s a crackdown on the tax dodging practice by citizens and it’s starting out with a few states. They mentioned Utah and California, although there are seven states right now that are starting to do enforcement and prosecutions and we’re going to get into that a little more in detail here in a minute.

WHAT IS THE MONTANA LLC LOOPHOLE?
But what is the Montana LLC loophole? This is a process where if a person has a vehicle that either has a title or doesn’t have a title that they don’t want to go through their state, they want to avoid their state for whatever reason. Maybe they’re trying to avoid taxes. They’re trying to avoid smog inspection emissions. They’re trying to avoid the title process. They’re going to do a Montana process.

WHY MONTANA? WHY LLC?
Now, why is it called LLC? Well, no state can give a title to a non-resident. You have to be a resident of a state to get a title from that state. That’s always been the case. You can’t just say, “Well, I live in New Jersey. I want to get a title from Colorado.” You have to get a title from the state where your driver’s license is located. So, what people do is they form a company, an LLC corporation in the state of Montana and then put the vehicle in the name of that corporation, right? And technically, that part’s legal. You can put a vehicle in the corporation name. Montana will let you do that.

NO SALES TAX AND MINIMAL REGULATION IN MONTANA
And the reason why people use Montana is Montana is a state that does not have sales tax. So when you register a vehicle, you don’t have to pay sales tax. And they don’t have a lot of inspections and emissions and a lot of the regulations that other states have. So many people will use that loophole for their vehicle.

SIDE NOTE: NOT AS EASY AS IT SEEMS
Now, just a little side note, the process isn’t any easier than just going through your own state. If you have a title problem, you only have a bill of sale, maybe you have missing documents, you’re not going to be able to magically get a title from Montana. You still have to do some process like a bonded title or a court order title in Montana. So that is not really any different from going through your state.

REAL MOTIVE: TAX AND INSPECTION AVOIDANCE
So really, the only difference is you don’t have to pay tax and you don’t have to do emissions. So people think, well, it’s legal, so I’ll do it. Ah, but it’s not really legal. The reason why is the tax is not a sales tax. Taxes for vehicles is a sales and use tax. That’s what the tax is called in the statute.

SALES AND USE TAX MEANS YOU OWE TAXES WHERE YOU LIVE
So if you title your vehicle in Montana and then use it in your state, you’re actually evading taxes. Even companies like FedEx or Amazon when they title vehicles in other states, if they use them primarily in a state where they deliver the packages, they have to pay taxes in that state.

ENFORCEMENT HAS BEGUN
So what is happening now? What’s happening now is the other states besides Montana that have been losing tax revenue are now rolling out the prosecutions doing sting operations. They’re doing all kinds of enforcement.

HOW THEY’RE CATCHING PEOPLE
How are they catching people? Well, one way to do it is if they see a Montana plate driving around, they can run the plate and if it’s LLC, they’ll pull it over and they’ll check who’s driving it, what the ownership is. But more importantly, they’re using, and we’ve talked about this on this channel many times, ALPR, automated license plate readers, where around town, they will have cameras that read license plates that will identify a Montana license plate, the same one, driving by over and over for weeks or months at a time. That’s obviously not somebody just on vacation. That’s somebody who is living there.

PURSUING $100 MILLION IN BACK TAXES
And that’s what they say in this article. The DMV is using plate readers to sniff out Montana plated cars and tracking registrations to catch tax evaders, going after what could be $100 million in back taxes and penalties. So, they’re not playing around.

GOING AFTER LLC MILLS
They’re also going after what they call LLC mills. These are companies that do this Montana process for you. They charge you a fee, and they’re starting to crack down on those. Remember back in the ’90s, there were a few kind of fly by night sketchy car title companies that were using illegal methods to get people titles like fraudulent mechanics liens and some other sketchy methods. And there was one in Nevada. There was one in Tennessee. They all got busted. There are people in prison over that.

NOW TARGETING SERVICE PROVIDERS
So now they’re starting to also crack down on the providers of these services knowing that they’re illegal. And many states have now passed laws closing the loophole.

MULTI-STATE ACTION AGAINST TAX DODGERS
Trickier to dodge the sales tax unless you live in Montana. So that’s obviously if you live there, you can register there, not a problem. And in reality, it’s not new. Back in 2019, a few years ago, Georgia did this. They cracked down, but they were a single state. This is a collection of states that’s doing this, and they’re working together to get the records. They can get the records directly from the Montana LLC Secretary of State to find out who the owners are, who the registered agents of that company are, and if they see you’re out of state, they’ll slap you with tax evasion.

MONTANA’S SKY-HIGH CAR OWNERSHIP RAISES FLAGS
Why is this happening? Well, Montana has the highest car ownership by population in the United States, more than double California. That’s because many people are putting cars in their name in Montana, even though they don’t live there. Again, they’re cracking down on using this to dodge paying taxes.

EVEN IF YOUR INTENT WASN’T TAX EVASION
Even if you did the process for some other reason besides just avoiding taxes, if you didn’t pay the taxes afterwards in your state, they’re still going to say, “Well, you did it for another reason, but since you didn’t pay the taxes, that’s tax evasion.” And they’ll come after you for taxes, penalties, interest. They could even seize your vehicle.

BREAKING STORY CONFIRMED APRIL 30TH
So, this is breaking news. This article came out April 30th. That was yesterday. We’re recording this on the 1st of May. And if you’ve been watching our channel, you’ve seen the prediction of this coming. And it’s not a prediction. We’ve heard from the DMV commissioners. We work with them all the time, the different states’ DMVs, and they’ve told us that it’s just a matter of time. They had to put together the task force, put together the investigative resources, put together the rules for their state, and now they’ve kind of dropped the hammer, and people are going to find their titles will be revoked.

EXPECT VEHICLE SEIZURES AND PROSECUTIONS
There will be penalties and interest. Some people will have their vehicles seized and there will be some people that will be criminally prosecuted. Probably a few people go to jail, especially the ring leaders, people organizing this and doing it on a large-scale basis.

THE REASON WE NEVER OFFERED THIS SERVICE
So, it’s happening now. Now again, once you see it in Car and Driver, that means it’s making the mainstream news. And like I said, we’ve seen it for over a year now where the states have been telling us this is what’s going to happen. And that’s the reason why as a professional certified title company, we never got involved with this. We never did this Montana process.

OUR LONG-TIME CLIENTS ASKED—WE SAID NO
We’ve had clients that we’ve been doing business with for 20 years that said, “Hey, you know, why don’t you do this Montana thing? It seems like a big deal.” We’ve told them this is not going to end well for people who are doing it. Consumers maybe who did it years ago, you might be able to get away with it. But recent registrations will probably get revoked.

DIFFERENCE BETWEEN MONTANA AND VERMONT LOOPHOLE
And a lot of people ask, well, what’s different between this and the Vermont loophole, the Vermont registration loophole? Because we did those. The difference is this. There was no tax evasion. People who did the Vermont loophole paid taxes and it wasn’t designed to leave the Vermont plate on the vehicle and drive around with, right?

VERMONT LOOPHOLE WASN’T TAX EVASION
You would actually use the process to get something with your name on it as an owner and then transfer to your state. That’s different. That’s not evading anything. You’re still going through the process of your state. You’re still paying your tax. You’re still abiding by all the rules of your state. It’s just that it’s one step to help you get some documents that’ll allow you to be eligible to register in your state. So, that’s a whole different thing.

MONTANA CASE WILL BE MUCH WORSE
That one still got shut down eventually because some states didn’t like the fact that people weren’t primarily using like a bonded title or a court ordered title. But even something as innocent as that got shut down. This Montana thing is really going to be bad. Mark my words.

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