Dear Driving for Dollars,
I bought a car and had the title signed off to me. Then I went to the Department of Motor Vehicles to get it registered only to find it has a lien. How do I get it lifted?
-- Mustang Don
Dear Mustang Don,
When buying a used car, it's always best to have the seller provide you with a letter from the lender stating that the lien has been released, or if the seller is providing you the title, to check with the DMV first to ensure there is no lien.
Since the seller provided you with the title for the used car (assuming the title is legit), chances are the lien has been paid in full. It just hasn't been released properly. This is often because of a bank error or because it got lost in the shuffle when the bank merged with another bank or went under.
It's going to take some legwork and quite possibly several weeks, but you can probably get your issue resolved at no cost or little cost. Start by contacting the seller to see if he can provide you with any proof that the car loan was paid in full, such as canceled checks or a paid-in-full letter. Also, contact the lien holder and ask for the appropriate paperwork. If the lien holder is a bank that failed (or is a subsidiary of one), you can contact the Federal Deposit Insurance Corp. directly to request a lien release. Once you have the documentation you need, you can file it with the DMV and get the car registered.