1) Obtain make, model, vin, current mileage, owner’s name and address

2) A title state

3) Print the correct form from the appropriate state’s motor vehicle website

4) Call and verify that your vehicle is still titled in the state

5) Find out if there is a lien holder that has not been satisfied; if there is a lien holder you don’t know about or any outstanding fees, lack of insurance, or local address.

6) Once problems are resolved send it to the state’s motor vehicle office or titling agency

7) Complete with return envelope

Consumer managers should make sure a Carfax report is run on the vehicle before it is ever purchased to determine its brand. If it is in fact a salvaged vehicle then deem whether the vehicle’s price is appropriate.

A salvaged title can pose a problem but if the right precautions are taken then the consumer loan manager and vehicle owner can still benefit.

Collateral Manager Considerations:

1. Some states require you to submit the original title as a part of the vehicle title process
2. Those same states will generally allow a lien holder to request duplicate vehicle titles without the debtor’s consent.
3. In some lien holder states, you’re not required to relinquish the title but must have some proof of lien holder filing, whether it’s a:

• Notice of the lien filing receipt
• Copy of the registration reflecting the lien
• Some state print out of verification of the lien.

States vary on “where to obtain a repo title” – either the debtor’s state of residence or lien holder’s state of business. If it is a state that offers repossession titles, you can always obtain a repo title in the debtor’s state of residence.

Unfortunately, in most states, you will be required to obtain a court ordered title, whether it is a quiet title, a declatory judgment, or in some cases a bonded title.

Collection Manager Tips:

1. Most easily resolved if addressed immediately at the time of origination
2. You have to go through the court system in most states
3. In some states you don’t have to go through the courts, you can use a dealer certified reprinted copy of the contract and an affidavit explaining the facts (such as Indiana).

We cannot emphasize enough the importance of receiving a legible signed contract prior to funding a deal. As a collection manager, realize that once the debtor goes into default, they typically won’t be cooperative and it becomes very difficult to obtain the repossession title.

Correcting these errors is a lengthy and difficult process. The difficulty is directly related to the length of time between initial titling and discovery of the error. Obviously, the sooner the error is discovered the easier it is to correct.

1) VIN errors can either be a DMV or dealer mistake. If it is a DMV error, a copy of the previously submitted title is generally enough to force the DMV to correct the error. Some DMVs, even if they make the error, will still charge you a title fee to correct the error.

2) Another common reason for VIN errors is when Manufactures Statement/Certificate of Origin (MSO) are “switched at birth”. Often times the dealership employee grabs wrong MSO and the debtor submits it without noticing. The debtor has no reason to suspect the VIN on the MSO is incorrect so there is no reason to check. These can be very tricky to correct since the DMV prefers you to correct both vehicles at the same time. If the error is not caught in a reasonable amount of time the other car is often registered in some other state.

1) The DMV can make a mistake

2) The dealer or debtor could make a mistake at time of registration

3) Someone read it differently.

4) Confusion between VIN and odometer statements

Often times, as with VIN inspection, Collection Managers need a police inspection of the VIN or odometer which can be accomplished by a phone call to local or state law enforcement. However, some states require it to be on a prescribed form.

1. It is always best to put it on a state form. Some states will allow out of state law enforcement to correct. If the odometer error was left for some time, the state will often require previous work orders showing progression of the odometer reading. In most cases, the state will require a notarized affidavit explaining events that led to odometer discrepancy.
2. In cases where odometer is sig too low and must be corrected. DMVs are much more lenient and typically only require an affidavit.
3. Another problem occurs when someone inadvertently marks one of the check boxes for mileage “exceeding mechanical limits” or “mileage is not actual”. It is extremely difficult to remove one of these brands from a title once the title is printed. Called a branded title. Even after correct them through DMV still have to deal with carfax to get that corrected so to not lower the value of your vehicle.

To correct most name issues such as a lien holder’s name or the debtor’s name is misspelled, or a debtor is left off the title you must submit a notarized affidavit and the original vehicle title.

People’s name change whether it’s by marriage, divorce, or death. Collection Managers have to get the vehicle’s title changed.

Situation:

A vehicle is repossessed and the name doesn’t match the name on the contract. In most states the state will require a notarized affidavit explaining that the names on the title are in fact the same as the names on the contract.

1. The debtor option results in the bank giving the debtor the lien release and he can then apply for the duplicate title himself.

1. The Bank Option requires the bank to apply for the duplicate title. There are states that allow the lien holder to request a duplicate title without debtor’s consent. Most states require a Power of Attorney from the registered owner to acquire the duplicate title. As a collection manager, you, have to report current mileage in most states as well as lien release if applicable.

Generally only one Power of Attorney is needed regardless of how many owners appear on the title.

Be very careful when reporting mileage on a duplicate title and understand that all duplicates render previous titles null and void so that if you get a duplicate but find original then original is worthless.

Time: Most of us have experienced DMVs long waiting lines. You go up to the counter after standing for an hour only to be missing something that forces you to be furthered inconvenienced. A private company makes sure you are aware of all the pertinent information in regards to your situation. Even with a move to internet transactions kiosks can’t do everything requiring in person visits.

Costs: What is the cost of yours or an employee’s time? Not only is there the time of driving to and from the DMV, but loss of time in which you could be doing something more productive. It is an opportunity cost and instead of putting your efforts doing something of value you are wasting it doing something you can hire someone else to do more efficiently.

Customer Service: There is no incentive for a DMV to be nice, friendly, or helpful to its customers. A title agency wants repeat customers that are happy and satisfied with their experience. Title agencies strive to do everything possible to provide customers with excellent service.

The next time you are standing in line at the DMV, looking at your watch, you might think to call a title agency to save you the hassle.

Many states have a time limit to properly file a lien to protect against a bankruptcy. The lien holder needs to make sure the vehicle is registered with the proper lien within the time frame required by that particular state.

Whether the vehicle is sold by a dealership or an individual it is crucial that the collateral manager follow through to be sure the lien is filed. Sometimes when a vehicle is sold by a dealership they are required to file the lien. Sometimes the debtor files the lien at the time of registration. Many states allow a lien holder to file a notice of lien online to ensure that it is done on a timely basis.

If this is not accomplished and the debtor subsequently files for bankruptcy protection, your lien is effectively unsecured resulting in loss of asset and loss of protection.

For example in Missouri: the lien must be perfected within 20 days of the date of purchase if you want to be protected in the case of a bankruptcy; otherwise the bankruptcy trustee can and likely will have your lien nullified.

This is not intended to be legal counsel, please consult your attorney for further advice.