Can anyone answer this title question?

**Mieux97** · 09-18-2015, 10:04 PM

It has been a while since I have posted on the message board here, but I did not know where else to turn for such a question.

To make a long story short, here is my question:

What happens when you have a free and clear title to a vehicle and bank is asks for a payoff of the loan?

If anyone wants to know the full story I will be more than happy to share.

While comedic answers are always welcome, I'm really looking for something serious. Let'em rip!

**douglowden116** · 09-19-2015, 02:14 AM

If the bank isn't listed as a lien holder on the title nothing happens . That's in PA , I would assume it is the same in any other state . Is it an unsecured loan ?

**Mieux97** · 09-19-2015, 03:57 AM

It is an auto loan. I imagine was secured, well, it was supposed to be secured by the car as collateral, but neither they nor I have the car as the sole purpose of the purchase of the car was to be a gift to someone else, which has stated outright in the beginning of the purchase process.

**douglowden116** · 09-19-2015, 04:57 AM

If you have the title and they aren't a lien holder the loan is not secured . What does your loan agreement say . It will tell you if the car is securing the loan , but with no lien holder on title the car is pretty much yours . What state are you in .

**Mieux97** · 09-19-2015, 05:14 AM

I am in the State of Illinois. I have long understood that if there is no lien holder on the title then basically once that title is registered in someone else's name then it belongs to them legally. In this case, however, i gifted the car to someone else so they legally own the car.

The bank says they want the information on the registered owner because I still owe on the loan and I basically told them GFY because that's none of their business, but I still intend to fully pay the installment of the loan.

Now they are demanding a payoff of the remainder of the loan within 15 days. Within the contract, and demanded as part of the payoff, was supposed to be a service contract that I found was never paid for by the dealer, but funded by the bank. I attempted to transfer the service contract to the new owner of the the end of the service provider told me the contract does not exist and the bank is fully aware of this.

From what I understand, this contract is void partially because that service contract never went into effect. I have been told that if you purchase a service contract with a vehicle (as experienced with another vehicle that I own) then it is supposed to be active from the moment you sign on the dotted line purchasing that vehicle. In this case, however, I contacted the service company two months after the sale of the vehicle and I was told by the company that although it takes about two to three weeks before the contract becomes active, the contract never existed to begin with.

Thoughts?

**pajeff02** · 09-19-2015, 07:20 AM

In PA, the banks hold the title until the loan is paid off. In some instances, DOT accidentally sends the title to the owner and not the bank after a purchase. They also sometimes do not list the lien holder on the title... call it "clerical error". This generally does not negate the fact of the lien so long as the other paperwork was signed, sealed and properly maintained. If the car was pledged as collateral on the loan, chances are that they have a valid lien irrespective of what is, or is not, on the title. The question then arises as to a purchaser, or in your case, transferee, of the title. If they are a bona fide purchaser without notice, meaning they did not know there was a lien and paid value for the car, then they probably own it free and clear. If they knew of the loan, or did not pay for the car, then they do not hold the same status and the car may be lawfully repossessed by the bank. In either event, the bank can take action against the borrower in manners other than effecting a repossession. Laws vary from state to state, so please do not take this as gospel.

**Mieux97** · 09-19-2015, 07:33 AM

Does this apply even if portions of the contract are already voided such as the service contract agreement? Also, the APR has two different numbers on the paperwork so I'm not sure which APR is mine. The bank now wants me to pay the loan in full even though I never had the service contract. There was also no bill of sale, no invoice nor with their statement of delivery. I bought the car from the East Coast, not Pennsylvania but the East Coast, yet there are parts of the paperwork that seemed incomplete or missing. I have no intent on defrauding anyone and my intent was always to pay the loan. The fact that now they want the loan in full within 15 days including the portion of the service contract that I was never given and I just don't have that kind of money at this time. Would any of this void or violate the contract as issued?

**pajeff02** · 09-19-2015, 08:34 AM

One way to find out. Tell the bank to take a flying one and see what happens...

I presume the 15 day demand was triggered by the transfer?

**Mieux97** · 09-19-2015, 08:46 AM

Well, you would be correct in that the demand was triggered by the transfer. I have sent an email and I am awaiting a response and I probably won't get it until Monday. Today makes day two of the 15 day request. I wish I had more input because there is not a lot of information out there and the what happened in this situation.