Bank Won't Repo Car

[cousinmose]

What is the name of your state (only U.S. law)? Michigan
My daughter is significantly behind in her 2013 car payments (18 months). She is unable to catch up and would like the bank to pick up. She lives at home and car is in my driveway. WF Bank has been contacted multiple times and has not/will not pick up. What options are there to return vehicle?
Thank you.

 

[PayrollHRGuy]

You do realize when and if they do repo it they will sell it at auction and charge her for the difference?

She would be much better off doing the selling herself, pay what she gets to the bank and then doing some sort of settlement.

 

[LdiJ]

You do realize when and if they do repo it they will sell it at auction and charge her for the difference?

She would be much better off doing the selling herself, pay what she gets to the bank and then doing some sort of settlement.

That is difficult to do if the bank is holding the title. The bank is not going to release it so that it can be transferred to the buyer unless or until they are paid off.

 

[PayrollHRGuy]

MI is not a title holding state. If they were she just needs to change the order of what I suggested.

 

[xylene]

What does contracted multiple times mean?

If you mean phone calls, try having her write them, informing them she will no longer be making any payments.

Also, this is your adult daughters problem.

 

[justalayman]

MI is not a title holding state. If they were she just needs to change the order of what I suggested.

They still register a lien on the title which prevents the owner from transferring title to anybody until the lien is released.

 

[justalayman]

Why should the lender pick up the car? While the contract (presumably) allows them to, they are not obligated to. They can sit back and allow the interest to continue to accrue and expect payment.

I am surprised they haven’t retrieved the vehicle given the model year. It suggests there is still some reasonable value to the car.

Unless it’s been wrecked.

Is the car in good condition? Still running well and all?

 

[PayrollHRGuy]

They still register a lien on the title which prevents the owner from transferring title to anybody until the lien is released.

Hence the change in order of what I suggested. Work out a settlement with the bank that depends on the sale of the car moves to #1.

 

[justalayman]

Hence the change in order of what I suggested. Work out a settlement with the bank that depends on the sale of the car moves to #1.

I don’t disagree but logistically its very hard to put into practice what you suggest. Unless there is a local branch that has authority to sign off immediately upon receipt of the money the bank isn’t likely to sign off until they receive the money. That means a buyer is left in never never land with a contract for sale and having paid the seller money but without a title not knowing for certain the bank is going to release the lien.

I can tell you I wouldn’t go for that as a buyer

 

[PayrollHRGuy]

I've sold cars and motorcycles that still had money owed on them to individuals (I wasn't 18 months in arrears). A call to the bank that you are selling is usually all that is needed along with a buyer willing to wait a few days for the lien release. This would even be easier in MI because the title can be handed to the buyer.

Even if she can't sell it to an individual and the car is in good shape she could try a dealer that is used to dealing with loan payoffs.

Money wise pretty much any sale she can do herself would be better than letting the bank do it.

 

[Zigner]

I've sold cars and motorcycles that still had money owed on them to individuals (I wasn't 18 months in arrears). A call to the bank that you are selling is usually all that is needed along with a buyer willing to wait a few days for the lien release. This would even be easier in MI because the title can be handed to the buyer.

Even if she can't sell it to an individual and the car is in good shape she could try a dealer that is used to dealing with loan payoffs.

Money wise pretty much any sale she can do herself would be better than letting the bank do it.

This is all conjecture based on the bank being willing to take a loss on the vehicle. It is apparent that they don't feel inclined to do so.

 

[PayrollHRGuy]

The don't seem to excited to do anything at this point.

 

[latigo]

What is the name of your state (only U.S. law)? Michigan
My daughter is significantly behind in her 2013 car payments (18 months). She is unable to catch up and would like the bank to pick up. She lives at home and car is in my driveway. WF Bank has been contacted multiple times and has not/will not pick up. What options are there to return vehicle?
Thank you.

It seems to me that the creditor bank is being most imprudent in failing to repossess the vehicle and exercise its rights under its security agreement. Because by the very definition of a deficiency judgment it cannot seek such a judgment against its debtor until it has seized the collateral and disposed of it in a commercially reasonable manner. And with every passing month the vehicle declines in value. All to both parties potential loss.

So, either your daughter (or preferably her attorney) should notify the creditor in writing (Certified Mail RR) of her inability to meet her current or future obligations under the loan agreement; that she is abandoning and surrendering all claims, title, and possessory rights or interest in the vehicle; that the account has been delinquent and has remained delinquent since _____(date) ____; that in spite of numerous requests the bank has refused and failed to foreclose it security interest in the vehicle which has at all times since ___(date)____ been available for possession by the bank; and direct the bank to promptly inform her in writing of its intentions with respect to exercising its security interests.

Further, that if the bank files for a deficiency judgment, that she will in turn and in accordance with MCL 440-9507(1) seek to be set off against any such deficiency claim such losses as she may have suffered for the failure of the bank to timely seize the collateral and dispose of same in a commercially reasonable manner.

 

[Zigner]

Further, that if the bank files for a deficiency judgment, that she will in turn and in accordance with MCL 440-9507(1) seek to be set off against any such deficiency claim such losses as she may have suffered for the failure of the bank to timely seize the collateral and dispose of same in a commercially reasonable manner.

UNIFORM COMMERCIAL CODE (EXCERPT)
Act 174 of 1962


440.9507 Effect of certain events on effectiveness of financing statement.
Sec. 9507.

(1) A filed financing statement remains effective with respect to collateral that is sold, exchanged, leased, licensed, or otherwise disposed of and in which a security interest or agricultural lien continues, even if the secured party knows of or consents to the disposition.
[SUB]http://www.legislature.mi.gov/(S(vnxf5k3py2ah3bx3lr0dujku))/mileg.aspx?page=getObject&objectName=mcl-440-9507[/SUB]


How does that apply?

 

[latigo]

Because it is the statute stated, among others, in Elma, Inc. v. Wolverine Auto Supply, Inc., Michigan Court of Appeals - Wayne Circuit Court No. 225706; to-wit:

" . . . . . . . Article 9 provides that where the secured party does not comply with the provisions of the UCC relating to disposition of collateral, a debtor has the right to recover losses incurred as a result of the secured party’s conduct. MCL 440.9507(1).

Maybe the legislature has since reworked its UCC numbers. I don't know and I don't care. Nevertheless the law is clear that where the debtor sustains a loss directly due to the creditor's failure to comply with the UCC requisites in disposing of the collateral in a commercially reasonable that loss can be set off against the claim for a deficiency judgment.

Continuing from Elma:

"This Court has ruled that where the secured party’s disposition or sale of the collateral was commercially unreasonable, any resultant damages inuring to the debtor may be set off
against the amounts owed by the debtor to the secured party under the terms of the security agreement. Citing: Jones v Morgan, 58 Mich App 455, 460; 228 NW2d 419 (1975); see also Citizens National Bank of Cheyboygan v Mayes, 133 Mich App 808, 811; 350 NW2d 809 (1984).