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#2205764 - 02/12/19 02:41 PM Loan covenants on Consumer loans - Vehicle Titles
CindyS Offline
100 Club
Joined: Sep 2005
Posts: 132
Illinois
We've been discussing options to try to reduce the number loans we have that are to be secured by vehicles, but we never receive the title with the lien. Do other banks have the customer sign a separate acknowledgment at closing that they will provide the title? Could we add a covenant on the note that if the title isn't received within a certain time frame that a fee will be assessed? Or, is there any way to disclose that the interest rate will go to a higher rate in line with an unsecured note?

Any suggestions, or input on what others are doing, would be appreciated!

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#2205769 - 02/12/19 02:50 PM Re: Loan covenants on Consumer loans - Vehicle Titles CindyS
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 78,958
Galveston, TX
They bring in the title and give it to you when they sign the documents and you file the lien and the title is returned to you in most jurisdictions - but this is going to be State law specific as to how to handle.
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#2205855 - 02/12/19 07:33 PM Re: Loan covenants on Consumer loans - Vehicle Titles CindyS
CindyS Offline
100 Club
Joined: Sep 2005
Posts: 132
Illinois
That is the way it goes in ideal situations, but of course, it doesn't go that way in every situation. It's those other occasions, where you cannot have the title in hand at loan closing, that we are trying to come up with options for.

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