Lien Still Showing After Loan Is Paid Off

The Problem: Paid-Off Loans with Persistent Liens
So, we’ve been seeing a lot more of this scenario show up with clients where you have a vehicle that you had a loan on at some point. You paid off the loan a long time ago, but there’s still a lien showing on your title record. How could that be? You paid off the loan, the bank sent you the title, the bank verified it, but the title record still has the lien. Here’s why. When you pay off a loan with the bank, the bank will take that title certificate that they’re holding on to. They’ll stamp it paid.

Bank Procedures and Limitations
They’ll sign it. They’ll probably mail it to you. But what they won’t do is clear the lien from the official government title record. Why don’t they do that? Well, in order for the bank to clear that lien, they have to go through some steps. First, they have to have one of their employees fill out a bunch of forms. Probably take them an hour’s worth of labor. They have to file those forms with the government, pay a fee, wait for it to come back, and then send that to you. That all takes time and money. So, what the lender figures is, well, we sent our borrower a title. That’s good enough. It’s their problem from there.

The Risk of Lost Documentation
Well, what if you lose that title certificate? What if you lose the documentation they sent you? Well, think about it. At that point, the only two people in the world who know that that title is paid off is you and the bank. The DMV doesn’t know you paid it off. They never were notified. So, if you have received a title from your leanholder stamped paid, we highly recommend you will be back in your video in just a few seconds.

Recommended Action for Cleared Titles
That you bring it to the DMV to have them clear it off your title record and give you another title without any mention of that lien on it.

Lost Title Solutions
Now, if you are in the situation where you have received a title and lost it and you need to get another copy, what you can do is you can file a written documentation request with your leanholder. Our website, Car Titles, will tell you how to do that to have them issue a lien release. They will not be able to send you another title. They only have one title to give you, and they can’t print titles. Only the government prints titles. So, you can request from the lien holder a certified lien release letter of non-interest. Once you get that, then you can file it with the DMV. You’ll probably have to pay the fee.

Proper Communication Method
However, if you’re going to request this document from the leanholder, don’t try to do it by phone. If you call them up and say, “Hey, send me a lien release.” They’ll either say, “Yeah, no problem. We’ll do that.” And they never will. They might even tell you flat out, “We’re not going to do it.” Right? They don’t want to spend the time. So, don’t waste your time calling them. Do it by mail. Do it in writing. Fill out the document. Send it to the lien holder for signature and go that route. Our website again will tell you exactly how to do that.

Related Scenarios and Additional Resources
But this is a very common scenario with people who have a paid-off loan and you can’t get the lien release. What about a charge off loan? What about if it’s not paid off, but a charge off? It’s a similar scenario. Look at our YouTube channel. We’ll have some videos about how to get a charge off loan off of your title record.

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