How To Remove A Lien From A Title Record – Lien Release

Understanding Vehicle Lien Removal Process
How do you get a lien removed from a vehicle title record? If you have a vehicle that is currently blocked from getting a title because you need to get a lien removed from the official title record, it’s very important to know how to go through that process. First of all, if a lien is on a title record, it doesn’t mean there’s money owed. It doesn’t mean that there’s still a balance owed. It might be owed but also it’s not required. In addition, even if there is money owed, it’s not certain that you can’t get that lien removed.

Examples of Successful Lien Removal
For example, there are many instances where even if there’s money still owed, you can still get the lien removed from the title record. So, you can get the title, you can sell the vehicle, you can process a transfer.

What is a Vehicle Lien?
What is a vehicle lien? A vehicle lien is a claim against a vehicle title for from a bank usually or a lien holder that makes that vehicle collateral for a loan. Now, a lot of people don’t realize this. The lien holder is not the owner of the vehicle. If you finance a vehicle from a bank, the bank is not the owner of that asset. They’re simply a lender or a lien holder.

How Liens Work on Vehicle Titles
What happens is they will place their name on the title to hold their position as a lien holder for collateral and that means the DMV can’t release the title. A vehicle title is a legal document. You’ve seen these before and it has the name of the owner on it as the legal possessor of the vehicle, but if there’s a bank that lent money on it, they’re also going to put their name on it to protect their interest.

The Problem with Paid-Off Loans
Now, if you paid off your loan to the bank, and we’ll talk about if you didn’t pay off the loan here in a minute, but if you did pay off the loan, what they’re supposed to do is sign the title, stamp it paid, mail it to you, and they’re also supposed to remove that record from the DMV database. However, most of the time, they don’t do that second part. They just sign the title, stamp it, and mail it to you. And if you lose it, now you have a problem because that record is still going to be in the database.

The Correct Way to Contact Lien Holders
If that’s the case, you want to contact a lien holder to have them remove it. However, it’s very important how you do this. You can’t do it by phone. You can’t do it by text message, fax, online, internet. You have to do it in writing. And we’ll talk here in a minute why. We have hundreds of clients over and over that contact us and say, “Look, I tried to call the bank. I called the lien holder and they said they couldn’t do it or they said they would do it and they never did.” That’s cuz you did it by phone. If you do it in writing, you’ll get your lien release.

Getting Lien Release When Money is Still Owed
Now, let’s talk about if the money is still owed. Maybe you stopped paying on a car a long time ago. Maybe it’s a charge off. Maybe it’s a write off. Maybe it’s what’s called a short sale. And you can get information on that below. How do you get the lien release? Same way. You do it in writing. What you do, and this is how we do it. You put together a package of documents that is an official lien release.

The Lien Release Package
The package. It’s a lien release, a letter of non-interest, an affidavit of facts, declaration of interest. You put that together in writing, printed, and you send it to the lien holder with a request for them to verify it.

Why Written Requests Are Essential
And it’s important to do it in writing because here’s why. Lien holders don’t have a dedicated lien release department. So if you call them up and say, “Hey, give me a lien release,” somebody’s got to figure out whose job it is to do that. And these are all people that do something else all day that they have a responsibility to get done. So if they drop what they’re doing to put together this package of paperwork, right, it might take them an hour or two to put all this together. It’s not their job. So they’re not going to do it. They either are going to tell you they won’t do it or they won’t do it. You probably are familiar with this because you probably got the runaround from the bank.

Making It Easy for the Lien Holder
But if you put that package together and send it to them, now it’s a different story. All they have to do is sign it and mail it to you. In fact, we put, you can see in this package, there’s envelopes in here. We even give the lien holder an envelope already written out to mail it back to you. In addition, put a stamp on the envelope. Why should you do that? Well, any work that that person at the bank has to do is one more reason they’re not going to do it. If they can’t find a stamp, they’re going to throw it away. If they don’t have an envelope, they’re going to just drop it. You got to do all the work for them. Even if there’s money owed, even if there’s not money owed, this is the way to do it. Getting a lien release to get your title cleared is extremely important.

Backup Option: Court Order Title
Now, if for some reason the bank doesn’t respond or they take their time or they just, you know, forget about it, then you have a backup option in that package that I held up here a minute ago. We also put together a magistrate title or a court order title or declaratory judgment depend on the jurisdiction. It’s a backup. So after a week or two, if the bank hasn’t responded, you can then take the package, bring it to your local court or mail it to your local court and they can sign it because the bank didn’t respond. The court order title is an override of that. It’s an override of the bank not performing what they’re supposed to do.

Summary of the Lien Removal Process
So that’s the process of getting a lien removed from a title record. If you have been instructed by your bank to go to a website to get the lien release and it’s not going to the right place or they tell you to call a title company, this is why. Because they don’t have people in their bank that’s trying to help you out because it cost them too much money.

Why Banks Don’t Clear Title Records Automatically
And you might even ask, why is it that they don’t clear from the title record when they sent you your title initially? Well, it’s money. For them to do that, somebody has to fill out some forms. That might take a half an hour, 45 minutes. Somebody has to get those forms to the DMV and pay the fee. It might cost them $100, $120 for all the cost of taking a lien off of a record. Think about that. For hundreds of thousands of cars, that’s millions of dollars they save by not clearing the lien record. And it puts the burden on you. But this is a way to get that done easily.

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