QUESTION
If the bank who holds the lein on my vehicle never obtained the Title to the vehicle from the seller private party, do I still have to pay the loan?
Asked on Jun 06th, 2012 on Contracts - California
More details to this question:
I took out a loan to purchase a vehicle from a private party. I was stationed overseas. The loan was finalized, the private party member was paid out by my bank and I was handed the keys. I moved back stateside and attempted to register my vehicle in Oregon. Through the process I come to find that the bank never received the title for the vehicle before finalizing the loan. Do I still owe on the loan if the bank has no proof of owner ship?
2 ANSWERS
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The bank does not take title to the car but instead has a "secutity interest" in the title to the car. The loan is independent of the security interest, which is for the protection of the lender, not you. You claim is against the seller. You may also wish to obtain some guidance for this dilemma from the California Department of Motor Vehicles in order to have a new title issed to you.
Answered on Jun 17th, 2012 at 12:47 PM
A lien is only security for a debt, not the debt itself. If you default upon the loan, the bank may have some difficulty repossessing your car, but that does not mean that you are not responsible for repaying the debt, or that the bank cannot obtain satisfaction through other means.
Answered on Jun 07th, 2012 at 7:02 PM