Very often the subject comes up about an open title or a jumping title. What that means is if you have a title certificate like this one, it’ll have all the information on the front about the vehicle, and on the back it has a place where the owner can sign their name as the seller to the new buyer. If the owner just signs their name and leaves the buyer blank, that’s called title jumping or title skipping.
Scenario of Title JumpingWhat happens is many times a buyer will want the title to be open so they can flip the vehicle. So let’s say somebody’s selling a car on Craigslist or Facebook and the buyer comes to you and says, “Hey, I want to buy your car. Just sign the back of the title. I don’t know what name I’m going to put it in yet, so just leave it blank. I’ll fill it in later.” Well, if you do that, you may be guilty of title jumping.
Consequences for SellersTitle jumping: right on the back of the title, it says do not sign a blank title. There are many reasons why this can create problems. You might not think as a seller it’s any problem for you because you don’t care who buys the car, right, as long as you get your money. But what happens is if you sign an open title, you have no idea who you sold it to. You have no idea if they’re actually going to put it into their name right away, which means you’re liable for things that could happen with the vehicle.
Legal Implications for SellersYou also don’t know if they’re avoiding taxes and evading taxes, and if you help them do that, you could be liable as well. In most states, there’s fines, penalties, and imprisonment if you are caught jumping titles, and as the seller, you could be just as liable. On the back of that title, it has language that says violation could be a criminal offense.
Specific Risks and PenaltiesAnd what it spells out is if someone sells a car to another person, they only sign their name but not fill out any additional information about the sale, such as the price or mileage. That’s another problem that can come up. If you don’t fill in the back of the title, you don’t put in the mileage, somebody could roll back the odometer and have a vehicle with an illegal odometer reading. You could also change the price where if somebody gives you 3,000 for it and they say I only gave you a thousand, they pay less tax, right, and that could be title or tax fraud, tax evasion.
Legal Standing of Title JumpingAnd according to this article, and this is a little bit of exaggeration, title jumping is considered a felony and highly illegal in 50 states. It’s not a felony in all 50 states. It’s a crime in almost every state, but if you’re caught doing it intentionally, the penalties can be pretty severe.
Buyer Precautions and SolutionsAs a buyer, if you have purchased a vehicle with an open title, sometimes you walk into the DMV with that title not filled in, they’ll seize it from you. They will impound the title and sometimes the vehicle. If you have that happen to you, you may be able to do a bonded title, you may be able to do a court order title, and you may be able to do some type of magistrate title.
Title Bond Costs and State VariationsOne of the things to keep in mind is if you get a title bond, remember it only is going to cost you about a hundred dollars for the title bond. Many people think it’s going to cost you thousands of dollars for a title bond, but there are some states where you can’t get a bonded title. Here’s a list of those states. There’s about 10 states that you can’t, but you can do a court order title.
Conclusion and ResourcesAnd all the information on bonded titles, court order titles, jump titles are all available on our website at cartitles.com. Just make sure that you know when you’re buying a vehicle, get a good certified title transfer to your name. If for some reason the seller doesn’t have it, think twice about giving them your hard-earned money unless they’re going to give you a valid legal title.
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Why VIN Verification is Required by DMVMany times a client asks us why does the Department of Motor Vehicles or the titling Authority require a VIN verification or VIN inspection on a vehicle when they’re transferring a title. Well, here’s a good reason why.
Fraud Investigation by FDLEThis is a case that was investigated for many months and there was fraud happening on titles in the State of Florida. The FDLE, which is the Florida Department of Law Enforcement, cracked down and arrested more than 20 people that were fraudulently titling cars. What were they doing? What they were doing is they were buying vehicles from dealerships on credit or with a bad check, and before the loan defaulted or before the check bounced, what they would do is they would change the VIN number on the vehicle and they would get a fraudulent VIN number (vehicle identification number). They used that to apply for a title and transfer it to somebody else so that unsuspecting buyer was actually buying a stolen car. This operation, Gone in 60 Days, netted all these people arrested.
Expansion of the ScamWhat happened was it was so popular as a scam that then they started renting vehicles from airports and other high-end areas and doing the same thing. They were changing the VIN numbers, putting a fake VIN number on, and then reselling the vehicle. Sometimes they would even sell it to an insurance company.
Purpose of VIN InspectionSo the reason for having a VIN inspection or VIN verification is to make sure that the VIN number that’s on your vehicle is actually the correct VIN number for the car. Now, you know it is—you know, are aware that it’s legitimate—but the Department of Motor Vehicles wants to make sure and protect you that you’re not actually titling an illegal vehicle or a stolen vehicle.
Protecting Innocent BuyersIf the VIN number has been tampered with, removed, altered, changed, sometimes people will buy these vehicles from Copart or IAA with junk titles or parts-only titles and slap another VIN number on from a salvage vehicle, and that’s a way to sell a car or truck to an unsuspecting innocent buyer. So they’re trying to protect the owner, meaning you, or even the next buyer from having a vehicle that’s ineligible.
Simple Process of VIN VerificationNow, it’s real simple. Usually, a notary or any local agent can inspect the VIN number. Really, all they have to do is look at the VIN number, make sure it’s the same as what’s on your title paperwork, and then also verify that that’s the actual identifier for that vehicle, that it hasn’t been tampered with, it hasn’t been altered in any kind of way.
Importance Despite InconvenienceA VIN inspection, VIN verification is inconvenient, it’s annoying, but there’s a reason that they do it. They’re not just trying to make your life miserable and make you jump through hoops or be inconvenient. They want to make sure that that vehicle is eligible, legitimate, because once they issue that title, that’s a legal government document. They’re putting their trust and faith behind it that you are now the owner, that’s a legitimate vehicle.
One-Time RequirementSo now when you go to sell it, you can represent to your buyer everything’s legit. So it is a one-time thing. You don’t have to do it every year; you don’t have to do it every month. It’s a one-time event that you have to get a VIN verification performed to make sure that that vehicle is legitimate.
Understanding Bonded TitlesSo how does a bonded title work and how can it help you get a title for a vehicle? Well, most states—42 to be, I’m sorry, 38 to be exact (there are 12 states where you can’t get a bonded title)—will allow you to get a legal title for a vehicle that you have no paperwork on using a surety bond process.
Importance of Bonded TitlesThe reason this can help you is you can see this picture here there’s a barn find, right? If you find an old car abandoned on the side of the road, you may be able to use the bonded title process. Even though you see in this article the word abandoned, do not use “abandoned vehicle” as an application for a title in almost every scenario. What’s going to happen is if you declare the vehicle to be abandoned, what’s going to happen is you’re not going to get to keep it because what happens if it’s declared abandoned? The police will ask an authorized towing company to remove it, take it to storage, and then they will sell it at a public auction. Abandoned vehicles are not “finders keepers.”
Applying for a Bonded TitleHowever, if you file for a bonded title, a surety bond title, it’s basically you going to the licensing title authority and saying, “Look, I legitimately am authorized to have this vehicle. I bought it, it was left on my property, I gave somebody money for it, I traded for it, but I don’t have the old title, I don’t have the transfer of ownership.” Obviously, if you have the title, it would be easy. You know, a title is a certificate that looks like this; it’s got all the official government printing on it. If you have that, you have no problem. But if you have purchased a vehicle, acquired a vehicle, traded a vehicle, or somebody left you a vehicle that has no legal title, now you have to do something different.
Misconceptions About Bonded TitlesOne of the things that many people are misinformed about on a bonded title is you have to pay thousands of dollars to get a surety bond. That’s actually not true. What you have to do is you have to purchase a surety bond in an amount that’s equal to the value of the vehicle, but that surety bond is probably only going to cost you a hundred dollars for the actual surety bond. And once you get that surety bond, you have to sign some affidavits, fill out some forms, make sure everything is all I’s dotted, T’s crossed. You submit it to the DMV, and as long as the vehicle is not stolen, doesn’t have any large open liens on it, and it’s not reported as parts only, they’ll give you a title, and you can own that vehicle.
Avoiding the Abandoned Vehicle DesignationNow remember, if you say “abandon” instead of “title” in an article, let’s say this right here: if you find an abandoned vehicle in your barn, that’s not yours to keep. You have to call the police, and the boys in blue will get that relic from you, right? So don’t say it’s abandoned because if it truly is abandoned, it’s probably not yours to keep unless you go through some other processes.
Mechanics Liens and AlternativesOne of the processes they talk about is you can put a lien on the car for a storage fee, but that’s actually not completely accurate. The reason why is, in order to do that, you have to be a licensed automotive shop, and you have to have signed repair orders saying somebody brought this car in for service. In fact, there’s so much attempted fraud with that process that the state of Oregon says you need a twenty thousand dollar bond before applying for a mechanics lien. Body shops and other auto repairs will have to obtain a twenty thousand dollar bond in order to be able to assert a lien on a vehicle for non-payment. So most states are going to this model or already have, for that matter. You have to be a licensed automotive facility, you have to have a signed repair order, and you have to post a twenty thousand dollar bond.
Avoiding Fraudulent Mechanics LiensThere’s many easier ways to do it. Even if you have a buddy of yours that has a repair shop that wants to put in a fake mechanics lien, don’t do it because they’re going to audit that lien. They’re going to audit all of these mechanics liens processes. If you don’t have all the documents from the owner and when the ownership is changed, they’re going to send a letter to that prior owner that says, “Look, somebody filed for a mechanics lien on your vehicle to change the ownership. Did you bring your car in for service somewhere?” And if that person says, “No, I sold it on Craigslist,” or “I traded it in,” or “I left it in some field,” they’re going to revoke that mechanics lien, and they’re going to probably seize the vehicle. So don’t put in a fake mechanics lien. What you want to do is do a bonded title.
Court Order Titles as an AlternativeAnother thing you can do is a court order title, and this article goes on to talk about it. There might be another way by getting a judgment of ownership. They might ask the applicant to make some efforts to contact the owner, and you have to file it with the court in the county where you reside. If you file a claim of ownership with the court and an affidavit, the court can give you a judgment. You bring that to the DMV to get a title. You can do that without getting a surety bond.
ConclusionSo get more information on both the surety bond and a court order title. Those are definitely good ways to go. They’re much better than even the Vermont loophole that people do all the time because Vermont’s going to charge you big-time sales tax. We’ll talk about that in another video. But check out bonded title and court order title as options to solve your problem.
Thank you for your order from cartitles.com. Your package for the court order title documentation has a number of different documents in it, so here’s some basic information to get you started.
Checklist and Signing RequirementsFirst of all, look for on the top page of your package a checklist of the steps you need to go through for the court order title. First of all, there are several forms that you will need to sign. The one thing we can’t do is we can’t sign your name for you. You have to sign your name, and almost every county in the country requires an ink-on-paper signature to submit the package to the county clerk, the court clerk, to start the court order title process.
Variations in Court RequirementsNow, keep in mind that every court is going to be a little bit different, and even from week to week, month to month, the exact requirements of the court may change. This is why it’s very important to get your package filed with the court as soon as possible. There may be some other steps you need to do, for example, file a vehicle history request with your DMV. The DPPA form that’s included in your package, you may be required to send out notices to prior owners that may be in your package. But if you start that petition filing with the court as soon as possible, it’ll start the clock ticking on getting your file in front of the judge or magistrate.
Legal Advice DisclaimerNow remember, we’re not attorneys, we’re not giving you legal advice. The court will advise you what they’re going to need and what they don’t need. We recommend that you file the petition and the affidavit without a great deal of supporting documents. Let the court ask you for supporting documents. At some point, you may need to submit the prior history report that you get from the DMV, but wait until they ask for it to submit it.
Filing the PetitionFile the petition as soon as possible. At the same time, file the request for the DMV to get that prior owner report back to you. Don’t wait until you get that back to submit to the court. Here’s why: most counties in the country will have a week or so lag time to give you a hearing date, to give you a response date. You want to get them started on scheduling you on the docket, on the court calendar, on the schedule as soon as you can. That way, while they’re doing their end, maybe they’re going to do some research on the vehicle, maybe they’re going to do some other backgrounding, you can do things like request a history report, pull together documentation, get that court filing started as soon as you can.
Mailing the DocumentsNow, how do you do that? In your package, there will be an address for your court. We recommend mailing it to that address. Don’t go in person. Don’t, you know, go to the courthouse. They want as few people in the courthouse as possible. And if you do it by mail, maybe that’s a day of bringing it in person. But that way, if they do need something, they can contact you rather than confusing them with information if you walk in the door.
General InformationAgain, this is general information. There are 3,611 counties in the country. Every county is a little different. What you want to do is get that thing filed. That way, they can tell you how they prefer to do it. In fact, different magistrates in the same county may have different preferences on how they want to proceed with your case. So get it filed, let them tell you what they need.
VIN Verification and Additional RequirementsBe prepared for a few things. They may require you to do a VIN verification, have a police officer come look at the vehicle and verify the VIN number. They may also require you to take a picture of the VIN number to prove you’re in possession of the vehicle. So take a photo of your VIN number as soon as you can. Make sure you have a valid ID. If your driver’s license is expired, get that renewed because you may need that.
Post-Judgment StepsRemember, once you get that judgment of ownership from the court, if they give it to you, you’re going to need to file that with the DMV, and there’s also paperwork in your package for the DMV title application as well. Get that form filed.
Contacting Us for AssistanceIf you do have questions that aren’t answered in this video or in your package, email our help desk. [email protected] is the email; you see that on the screen. You can call us up too, but remember, our title processors are on hold all the time with the DMV. So if you email, a lot of times they can answer you back much quicker by email than if you call in and wait for them to be off the phone with the DMV. You can usually get a faster answer by email because while they’re on hold with the DMV, which they are all day, they can still answer emails. It’s harder for them to answer a phone call. So use the email. If you do request a phone call, put that in your message, and we’ll get back to you.
Final EncouragementBut get that paperwork started. We’re glad to be of assistance. We know how hard it is to get titles, and we’d like to eliminate the bureaucracy as much as we can.
Welcome to another episode at car titles.com. One of the most common questions that comes to us has to do with vehicle liens. It could be removing a lien from a vehicle title record, for example, an old paid off car loan or a charged off car loan or a loan that shouldn’t even be on the car.
Common Lien QuestionsAnother lien question that comes up is a mechanics lien. Can you use a mechanics lien to get a title? There are some very important misconceptions that people have that at the very least could keep you from getting a title and have you be rejected on your title transfer. At the worst, it could create legal problems. Look, most people don’t intend to do anything illegal or get in trouble, but a lot of times there are urban legends or online forums that tell you you can do certain things that might end up getting you into trouble.
Vehicle Liens and TitlesSo let’s first talk about a vehicle lien and a vehicle title with a lien on the record and figure out what that is. First of all, a vehicle title, as you know, is a legal document. Here’s what it looks like. This is a title for a vehicle, and it’s a certificate that’s issued by a government agency. Most states call it the Department of Motor Vehicles or DMV, something like that, and that state agency keeps track of and issues vehicle titles.
Lien on Vehicle TitlesNow, if you purchase that vehicle and when you bought it, you got a car loan from either the dealership, a manufacturer, or a bank or somebody like that. Let’s say you got a car loan from Chase or from Toyota Motor Credit. That lender is going to put that lien record on your official title history. It’s going to go into the government agency record system so that your title will say right on it, lien: Toyota Motor Credit. In fact, in most cases, they won’t even give you the title because that’s being held by the lien holder in most states. So as long as that lien is on the record, you can’t sell it, transfer it; sometimes you can’t even get the title because the bank owns it.
Removing a Paid-Off or Charged-Off LienWell, what happens when you pay that off or it’s a charge off and now you have to get it removed from the title record? Well, in most cases, let me back up, in some cases, the bank or the lien holder will actually take action to remove that lien from the title record. They’ll either send a document, they’ll do it electronically, or they’ll sign an affidavit that the DMV will use to take it off the title. Sometimes they give that document to you and then leave it up to you to remove it from the title. Sometimes all they’ll do is they’ll take that title certificate, sign it, stamp it paid, and send it to you, but they’ll never clear it off the title record. That’s a problem because if you lose that one single piece of paper, now you’re out of luck.
Process of Removing a LienSo how do you take it off? Well, in almost every state, the process goes like this. Some lenders have a direct electronic connection to the official DMV records where they can electronically type it in, hit enter, and it clears it. Sometimes they require a piece of paper, and that’s more common. That piece of paper is called a lien release document. It’s an official form from the DMV that releases that lien from the title record, which clears your title, and now you can sell it, trade it, do whatever you want.
Obtaining a Lien Release DocumentHow do you get one of those? Well, we’ve talked about it before, and don’t forget, in a minute, we’re going to talk about mechanics liens and what that means and how to do a mechanics lien if you can because the mechanics lien can also result in a bank loan being removed from a title, right? That can happen. So how do you get a lien release? Well, the first thing you do is you see if you already have it from the lien holder. If you don’t have it, you need to get it from the lien holder. The lien holder, bank, financial institution, whoever, they have to sign that form. You can’t just print it out yourself and submit it. It has to be signed by somebody who’s verified from the lender.
Contacting the Lien HolderSo what we recommend is don’t just call up your bank and say, “Hey, give me a lien release.” Don’t email them, don’t fax them, don’t text them, don’t send them a Facebook message because in most cases, that ain’t gonna work. The bank is either gonna forget about it, they won’t do it, the whoever you talk to on the phone, that’s not their job, and it’ll get lost in the shuffle, fall through the cracks. So what should you do? What you should do is you get that document, that form, print it out. It’s a one-page form. Fill everything in you can. What you can’t do is you can’t sign it. Mail it to the lien holder with a little arrow sticker saying, “Hey, sign here.”
Proper Procedure for Lien ReleaseWe’ve talked about this before, but we’ll go through this again. Put a return envelope so that they have a place to send it back to. They don’t have to do any work. Put a stamp on that envelope to mail it back to you. That way, somebody gets it, all they literally have to do is sign it, lick the envelope, boom, it goes back to you. If they have to do any more work than that, it’s possible and likely that that employee at that bank, at that financial institution, is just going to say, “Well, maybe I’ll do it later, maybe I’ll throw it away, or maybe I’ll pass the buck to somebody else because I don’t feel like doing it,” because all these people are doing some other job. They’re not a lien release department just sitting around waiting to do this.
Handling Charge-OffsWhat about a charge off? Well, if you do that same thing, many times what happens is that employee pulls it up, they get the VIN number, they type it in, “Yep, charge off, sign it, send it back,” now your lien is released because the charge off technically means it’s off their books, so it should be released. They’re not going to take it off the DMV record unless they have an easy way of doing it, so charge off takes it off.
Mailing Method and CautionsIn fact, one of the things you want to do, sometimes people ask us, “Well, should I send a certified mail?” Don’t send a certified mail because that’s going to probably end up going to the legal department of that lender, which means there may be higher scrutiny. It’s going to go to some higher level executive, higher scrutiny. If you just send a regular mail, it’ll go to some clerk, they look at it, charge off, yup, sign it, boom, you’re good. That’s how you do it. That’s how we do it. We send out a couple hundred of these a week for clients. That’s how you do it.
Mechanics Liens OverviewNow, what about a mechanics lien? Change the subject, change gears. Well, a mechanics lien, for those who don’t know, most of you do who watch our channel, is a process where a licensed garage, repair shop, storage yard can file a lien on a vehicle that’s been brought in for repairs, brought in for towing, brought in for storage, and somebody didn’t pay the bill. And that mechanics lien allows them to sell the car to pay the bill, right? And it also clears off any prior liens, even if those liens aren’t paid. So if there’s a lien that’s paid that’s still open with Toyota Motor Credit, somebody owes ten thousand. If the mechanic does it the right way, it removes that.
Fraud in Mechanics LiensHowever, here’s the thing. There’s a lot of fraud that goes on with that, and it’s not something which the powers that be don’t know about. In fact, here, look on the screen. This is from the AAMVA, American Association of Motor Vehicle Administrators. This is the quasi-government authority. A lot of law enforcement works in this organization that works with the DMVs to prevent fraud, and that’s exactly what this is: prevention of an abandoned vehicle, a mechanics lien fraud. Look, they’re not stupid. They know that some auto repair shops will file fake mechanics liens. Why would they do that? Well, what if your buddy owns a body shop and you say, “Hey man, I got this 2020 Toyota Camry I owe $15,000 on. I don’t want to pay my loan anymore, so do this: file a fake mechanics lien, sell it back to me, I’ll give you a couple hundred bucks, and then I get a free car. I don’t have to pay my loan.” Well, on paper that all sounds good, and the auto shop can file the right paperwork, they can do everything and try to get you a clear title, but here’s what’s going to happen.
Best Practices and Identifying FraudLook, this best practices for preventing fraud, this came out in March 2020. That’s more than three years ago. They’ve been on to this for a while. What they’re going to do anytime a mechanics lien shows up at a DMV, they’re going to look and see if any of it fits this profile of mechanics lien fraud because they know this happens and the banks are on to this too. A lot of times people will try to send, because one of the steps you have to do for a mechanics lien is send a notice to the bank and prove that you sent them a notice. A lot of these scammers will put a letter to the bank with blank paper in it so they don’t really get a notice, but they can show certified mail, “Look, we mailed it to them, they signed for it.” Well, that ain’t going to work because they’re onto that. So the mechanics lien fraud is something you don’t want to get caught up in because even if you file the paperwork and you get your title clear, if they come after you, look at this: evidence of crime rings using mechanics lien fraud. Do you want to be part of that? Do you want to be part of a crime ring, even though you’re not trying to do that?
Legal ImplicationsIf your name shows up on the title and you get caught with a fake mechanics lien, you may get pulled into this. So it’s not something you want to do. So I know we get questions, “Hey, can we use a mechanics lien for that?” The answer is, technically, can you? Yeah, you could file the paperwork, but I wouldn’t recommend doing that because they’re onto it. It’s something which is more common than you think. Look, every year millions of titles change hands in the US, millions. Every week there’s probably 20 or 30 mechanics liens done in some states. Well, they’re not stupid. They know what’s happening. So do the lien release if you can. If not, there’s other ways to get a title and it’s not something which is recommended to do.
Contact Information and SupportIf you have questions, give us a call. We’re glad to help. We can walk you through the proper ways of getting a title, how to remove a lien, what to do with a charged off lien, how to get the paperwork signed. And by the way, if you have a lien from a bank that went out of business, right, we get this all the time. “Hey, what if a lien holder went out of business?” Same thing. You get that document, fill it out, and you send it to the successor, and we can help you find who that is. If it was from back in the financial crisis of 2008, a lot of banks went out of business. If you need help, give us a call. We’re glad to help you with any vehicle lien questions or title problems you have, and we can give you the right answer for how to do it and not get in trouble.
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