serpentracer Posted October 6, 2011 Report Share Posted October 6, 2011 long story short, my brother took out a small (about $2k) personal loan and used his bike as collateral. the bank never asked for the title and never said anything about being required to carry full coverage on the bike. 6 weeks later he gets a letter from said bank that says he needs to surrender his title and show proof of full coverage insurance.my question is can they make you carry full coverage on it? I told him to tell them tough shit about the title. they didn't get it when they gave him the money, tell them to fire the guy who did it wrong. Quote Link to comment Share on other sites More sharing options...
conn-e-rot Posted October 6, 2011 Report Share Posted October 6, 2011 If it was a vehicle loan it would be either he puts full coverage on it or they will add their insurance on it and his payment will increase but not sure how that would work for collateral but if he doesn't follow their rules that may be grounds for them to put loan in default. Quote Link to comment Share on other sites More sharing options...
serpentracer Posted October 6, 2011 Author Report Share Posted October 6, 2011 how can it go into default if he pays the payments on time and in full? I hope they fucked themselves and are just trying to scare him into bringing them the title. fuck he'll pay it off in another month or two. it's already been payed off by $700 Quote Link to comment Share on other sites More sharing options...
Likwid Posted October 6, 2011 Report Share Posted October 6, 2011 If it was a vehicle loan it would be either he puts full coverage on it or they will add their insurance on it and his payment will increase but not sure how that would work for collateral but if he doesn't follow their rules that may be grounds for them to put loan in default.Lienholders won't carry insurance for you, unless they are acting as agent (most banks won't)To SR's original question, is it legal for the technical owner of the bike to require he carry full coverage insurance protecting their investment? Yes. Quote Link to comment Share on other sites More sharing options...
conn-e-rot Posted October 6, 2011 Report Share Posted October 6, 2011 Lesson #1 never use bike as collateral Quote Link to comment Share on other sites More sharing options...
serpentracer Posted October 6, 2011 Author Report Share Posted October 6, 2011 Lienholders won't carry insurance for you, unless they are acting as agent (most banks won't)To SR's original question, is it legal for the technical owner of the bike to require he carry full coverage insurance protecting their investment? Yes.why did they let him walk out the door without it in the first place? btw, it wasn't a loan for the bike. I don't know the details or I'd tell you guys. it probably had that on the contract he signed. he's a little slow:nono: Quote Link to comment Share on other sites More sharing options...
conn-e-rot Posted October 6, 2011 Report Share Posted October 6, 2011 It'd be easier to add insurance give them the title and pay it off quick Quote Link to comment Share on other sites More sharing options...
crb Posted October 6, 2011 Report Share Posted October 6, 2011 It'd be easier to add insurance give them the title and pay it off quick^^^^^^ this or else he will need a lawyer@ Quote Link to comment Share on other sites More sharing options...
Bad324 Posted October 6, 2011 Report Share Posted October 6, 2011 I once took out 3k in a personal loan from Key Bank to buy a camaro. Not once did they ask me for the title or to carry full coverage. Not sure if it varies bank to bank though Quote Link to comment Share on other sites More sharing options...
Tonik Posted October 6, 2011 Report Share Posted October 6, 2011 the bank never asked for the title and never said anything about being required to carry full coverage on the bike I would certainly bet it is in the fine print of the loan documents. Quote Link to comment Share on other sites More sharing options...
madcat6183 Posted October 7, 2011 Report Share Posted October 7, 2011 I used to do loans like this, now only Mortgages, but I used to work in the lending industry as a whole.If they did not ask for the title/request it at closing they can still ask for it BUT if it isn't in writing then technically no he doesn't have to provide it. In writing would be listed as collateral on the loan docs, note, etc. There will be a form that shows this, often it is the 1003 Loan Application, or note, that listed the VIN of the bike/bike description as collateral. If it is listed anywhere on the docs then he is required to provide the title. They then transfer ownership of the bike to the lender, and out of the borrowers name. This was common with the other loan officer in our office as he often would forget to request titles from borrowers, no lie.IF the VIN is NOT on any loan docs and no where does it show the VIN/description of bike for collateral, then tell them to F off.As for insurance this is the BITCH of it all. If the VIN/Bike is listed as collateral, they have every right to make him carry full coverage, if he doesn't or it laps's they will place lender paid insurance, which does not protect him in anyway, only their interest. It is NOT like a normal bike/car/house insurance, it merely covers their collateral and would ONLY pay them off. If the bike is worth 5K loan is 2K, he wrecks it with lender placed insurance, he gets 0.00 and they get 2k. Lender placed insurance is like 3 times what normal insurance is and is pointless to the borrower, only covering the lender. It is added to the monthly payment and must be paid until insurance proof is provided. Also they do NOT have to refund anything even if the policy is backdated, they still have a right to keep their insurance and premiums collected.If you need/want more info I did this for a long time and can give you more. Sorry if long winded....I just noticed you said the loan has been paid off by over 700.00? If this is the case then they should have sent a paid in full letter to him, and would have 0 interest in the title.Like I said, feel free to PM me, I can provide cell if you want via PM. I help people on WERA with mtg ?s all the time. I think I helped someone here too the other day. Quote Link to comment Share on other sites More sharing options...
crb Posted October 7, 2011 Report Share Posted October 7, 2011 I think he means his brother has paid the loan down by $700 already meaning he only owes $1300. Quote Link to comment Share on other sites More sharing options...
Likwid Posted October 7, 2011 Report Share Posted October 7, 2011 why did they let him walk out the door without it in the first place? btw, it wasn't a loan for the bike. I don't know the details or I'd tell you guys. it probably had that on the contract he signed. he's a little slow:nono:You're not required to show proof of insurance during signing on all liens.. it depends on the lienholder. It doesn't matter if the loan was for the bike, essentially using the bike as collateral makes it a loan on the bike Quote Link to comment Share on other sites More sharing options...
madcat6183 Posted October 7, 2011 Report Share Posted October 7, 2011 You're not required to show proof of insurance during signing on all liens.. it depends on the lienholder. It doesn't matter if the loan was for the bike, essentially using the bike as collateral makes it a loan on the bike Yep, this, just depends on lender, most do though. I believe like Yamaha Credit doesn't if the loan is under X,XXX, as with others. We did though on anything with a lien over $1,500 Gotcha on the paid down by 700, sorry, I read that wrong. Quote Link to comment Share on other sites More sharing options...
serpentracer Posted October 7, 2011 Author Report Share Posted October 7, 2011 (edited) sounds like he's screwed then. lol oh well sounded a little bs'ish to me when he read me the letter.I figured it was a way to trick him to bring them the title. (yeah I'm a skeptic)what sucks is his insurance (progressive) will give him a policy for full coverage for 6 months. the loan will be paid off before that. so he'll be stuck paying full coverage for the remainder of the time. plus the interest rate of the laon...that's gotta sting loloh well, let this be a life lesson. learned the hard way. but for some reason he's acting like he has to come up with the full amount right away. so there might be something he isn't telling me...time to do some digging lol. naa I don't give a shit. he's the dumbass lol Edited October 7, 2011 by serpentracer Quote Link to comment Share on other sites More sharing options...
Scruit Posted October 7, 2011 Report Share Posted October 7, 2011 (edited) If the bike is the collateral then send them the title. Or watch them default the loan, add fees, demand immediate payment and sieze the vehicle anyway (It's on the laon doc, right? It's theirs. When I bought my car the title didn't go to the lender first - it went to me first. Does that mean I get to tell them to F off? No. The loan is secured on the vehicle. Edited October 7, 2011 by Scruit Quote Link to comment Share on other sites More sharing options...
crb Posted October 7, 2011 Report Share Posted October 7, 2011 sounds like he's screwed then. lol oh well sounded a little bs'ish to me when he read me the letter.I figured it was a way to trick him to bring them the title. (yeah I'm a skeptic)what sucks is his insurance (progressive) will give him a policy for full coverage for 6 months. the loan will be paid off before that. so he'll be stuck paying full coverage for the remainder of the time. plus the interest rate of the laon...that's gotta sting loloh well, let this be a life lesson. learned the hard way. but for some reason he's acting like he has to come up with the full amount right away. so there might be something he isn't telling me...time to do some digging lol. naa I don't give a shit. he's the dumbass lolJust because it is a 6 month policy doesn't mean you can't change it in the middle, or at least I have never had an issue. Quote Link to comment Share on other sites More sharing options...
bandit12 Posted October 7, 2011 Report Share Posted October 7, 2011 If he drops full coverage during the life of the loan the insurance carrier will let the bank know. I did this same thing in using a bike as collateral for a personal loan (four wheeler) and three or four months later they sent a letter wanting the title.I sold the bike and paid the loan off and when I dropped the insurance they called the bank and the bank sent me a nasty gram about not having insurance on the loan. When I called the bank things were crossed in the mail type of thing and all was OK. But they do communicate with each other. Quote Link to comment Share on other sites More sharing options...
crb Posted October 7, 2011 Report Share Posted October 7, 2011 I know I meant he could drop full coverage in two months if he paid the bike off first. I should have been more clear. Quote Link to comment Share on other sites More sharing options...
Beegreenstrings Posted October 7, 2011 Report Share Posted October 7, 2011 If he used the bike for collateral. and gave them on writing the VIN it does not matter. they will put a electronic lein on the bike. Then pretty much they can be just as big of problem taking said lein off of that bike. Way easier to just do what is required and be done.But, it does raise an eyebrow that they never asked for it before. I too would be hesitant to do it now since they never asked for it before. i would go back and read all the fine print on the contract. If there was nothing stating such a thing. Then I would be more than happy (if you really dont like the bank) to tell them to go Fap themselves. Quote Link to comment Share on other sites More sharing options...
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