My title

[AmazinglySmooth]

Here's a story for you. I originally leased my 2018 Suburban and decided to finance it while rates were low. My credit union paid off my lease buyout. Here's the interesting part. I get an email today from the credit union saying that the tax office made a mistake and sent me the title without the credit union as the lien holder. I'm supposed to receive the title in the mail soon, and they want me to send it to them.

I fully intend on honoring my contractual obligations, but if you have the title, would you send it to the credit union?

My first thought was that this is some sort of title scam, but I independently confirmed that the email is from an actual employee at the credit union.

True story.

 

[iamdub]

The fun: If you have the title, free and clear in your name, then you legally own the vehicle.

The spoiler: They can take action against you for not paying them what you are legally bound to pay them, regardless of what you own.

Adulting: Just do as you should but only after having proof that having multiple transfers of ownership on the title's history won't affect it's value.

 

[OR VietVet]

I would try to keep the title but make the payments as scheduled. They may still win the argument but make them work for it. Your membership at the credit union may be stained after that though.

 

[PG01]

Why bother, my credit union goes above and beyond for members. If they want their name on it, so be it.

 

[Rdr854]

Merely sending the title may not be sufficient. Last year, I refinanced my GM loan through my credit union and had to record the lien on the title in favor of the credit union. This required me to go to DMV and pay a lien recordation fee. The hook that the credit union had was that if not completed within X days of the loan being funded, the extremely low auto interest rate would be converted to an extremely high unsecured loan interest rate.

I would contact your credit union customer service center to get explicit instructions on how to handle this.

 

[usnret]

Get the title to them. If you don't they have the options of calling in the loan immediatly or resetting the loan to a personal with a high interest rate.

 

[Rocket Man]

They have the upper hand title or not. If you want them to place a lien on you and watch your credit take a hit as well as suffer the consequences of a credit union that will no longer help you, then by all means hold onto that title.

 

[Joseph Garcia]

To me, doing anything other than what your credit union wants, is both a waste of your time, and a potential for an unfavorable comment being added to your credit report.

Honest mistakes happen, and if the situation was reversed, how would you want the other party to treat you?

As @Galante stated, credit unions are typically very good to their members, so why would you consider making things more difficult for both you and them?

Don't get me wrong, I would most likely be having the exact same thoughts and considerations as you, if I were in your shoes. But, at the end of the day, doing the right thing is the best long term solution, IMO.

 

[Fosscore]

^^ Some good advice guys and a good question from OP worthy of a post nonetheless as we can all learn or someone having been in a similar quandary. In the end the CUs do right by their members and that ding on a credit report would haunt you forever.

 

[Tonyrodz]

I had kind of a similar situation. In the early 90's I financed a very expensive car through my bank. I was able to refinance it after maybe 1 yr. The bank messed up after the refinance and mailed me the title, stamped "PAID" and signed. They never asked me for the title back, and I continued to make my monthly payments. Sure, I thought about it, but in the end I knew I didn't own it. That's why I continued to make my monthly payments. Just do the right thing. If not, it will def come back to bite you in the ass.

 

[James Ward]

It's never a good idea to jerk the credit union around. What do you think your going to prove ? The credit union has a lot of ways to make your relationship very poor, very fast. Just send the title to them certified mail.

 

[AmazinglySmooth]

I've already stated that I will honor all my contractual obligations.

So many have assumed something nefarious, but I want to protect myself. No credit union would want their customers to be unprotected from loss. The title exists for a reason--to prove ownership--so having it out seems riskier to me than holding it.

 

[Rdr854]

I've already stated that I will honor all my contractual obligations.

So many have assumed something nefarious, but I want to protect myself. No credit union would want their customers to be unprotected from loss. The title exists for a reason--to prove ownership--so having it out seems riskier to me than holding it.

In my prior response, I did not suggest that you would default on your payment obligation. However, I expect that like most bank/credit union auto loan finance contracts, your finance contract requires you to perfect a lien in favor of your creditor - which in this case is your credit union. Depending upon the state, the physical title will be in the possession of the creditor with the debtor shown as the owner and the creditor shown as the lien holder. For instance, in Virginia where I live, my credit union has the physical title for my Suburban which shows me as the owner and credit union as the lien holder. The perfection of a lien and the physical holding of the title by the credit union does not transfer ownership to the creditor.

Another contractual obligation that you have is to report the loan to your insurance carrier and show the creditor as the loss payee on your policy. The insurance carrier will send them a letter confirming your coverage at policy inception and at every policy renewal thereafter until the vehicle is reported as paid off.

As I previously stated, my credit union made it abundantly clear that a failure to obtain a lien on the title in favor of the credit union (and submitting the title to them reflecting the lien) in a timely manner would result in the loan being reclassified as a personal unsecured loan at a significantly higher interest rate and monthly payment.

Bottom Line — If your vehicle is totaled (and there is a loan outstanding), the lien holder will receive the insurance proceeds up to the Lesser of the payoff on the loan or the ACV of the vehicle. Any excess proceeds, if any, would be paid to you. If there is still a balance, you would have to come up with that since the vehicle must be paid off so that the insurance company can take title to the vehicle.

I hope this helps.

 

[James Ward]

Not too sure why you think your not protected, did you ask the credit union ? Are they worried that your not protected, and from what ? Since they have paid for the vehicle with their money, or the credit union members money, they hold the title till the funds are paid back in full. The vehicle is insured and with both the credit union and the insurance company covering the vehicle there is no risk. The loan, once paid back, they send you the title. Not too complicated ! Why don't you go to the credit union and sit down with them and ask about being unprotected ? I'm sure they can answer all your questions. Not complicated !

 

[Rocket Man]

I've already stated that I will honor all my contractual obligations.

So many have assumed something nefarious, but I want to protect myself. No credit union would want their customers to be unprotected from loss. The title exists for a reason--to prove ownership--so having it out seems riskier to me than holding it.

Wait a minute- who paid off the lease? Your credit union, right? So who exactly would you think is unprotected from a loss? Your credit union, because you could take all the insurance money and they get nothing. You could even very well still be upside down on the loan and if it’s totaled or stolen you could take the money and run. They are the ones that loaned the money on it, they asked for the title and if you don’t give it to them they will most likely call the loan due in full immediately because it’s THEM who is unprotected.

 

[Rocket Man]

And BTW, stating “I will honor all my contractual obligations” is great and all, but if you go in and ask to borrow money on a vehicle and tell them that but you want the title and you want it in your name, how do you think that will go? They don’t give a shit what you say, they will make sure you HAVE to do that or else there will be a way for them to recover their loss. Go find someone to loan you money on your word, and let us know how that goes.

 

[BG1988]

Here's a story for you. I originally leased my 2018 Suburban and decided to finance it while rates were low. My credit union paid off my lease buyout. Here's the interesting part. I get an email today from the credit union saying that the tax office made a mistake and sent me the title without the credit union as the lien holder. I'm supposed to receive the title in the mail soon, and they want me to send it to them.

I fully intend on honoring my contractual obligations, but if you have the title, would you send it to the credit union?

My first thought was that this is some sort of title scam, but I independently confirmed that the email is from an actual employee at the credit union.

True story.

Get a letter in writing from Snail mail(don't give the address as they all ready have it on file)
or go to the branch and talk to the manager about getting a letter in writing (also make sure you get proof you were there )

too much email scams i'm not saying it's a scam email but it's easy to forge sent from email

 

[RobH]

It's easy to print a hardcopy of the email and take it in and ask the credit union manager if they sent it and ask them what needs to be done to straighten things out. If they goofed and another title application has to be submitted to the DMV, they shouldn't have a problem with paying the fee to correct their mistake.

 

[wjburken]

The whole premise of this thread is non-sense if you ask me.

If you do get the title delivered to you without it showing the credit union as having a lien on the vehicle then the email was legitimate and you need take it into the credit union as requested in the email. Until then, what can you do other than make your payments on time and make sure your insurance policy lists them as first payee.

Not sure what your concern is with protecting yourself from loss. Titles are sent in the mail everyday. As long as you have a loan on it, you don’t have free and clear ownership of the vehicle, the credit union does. They are the ones that need protection from loss. Not until you pay off the loan in full do you have free and clear ownership.

 

[Joseph Garcia]

I honestly think that we've beat this thread to death. Time to close it and declare it RIP.