05/10/2019
Cars, Vans, Pick-up's, AUVs and SUVs with outstanding AUTO-LOAN balance or under bank loan/mortgage.
PLEASE READ:
Just a friendly reminder, financed and leased vehicles must be PAID IN FULL before you can sell the car privately. Please be informed that this is the right thing to do. In as much as possible, avoid to sell it to anybody who will just continue or assume your suppose full obligation with the bank. Be reminded that when you finance your vehicle, the car ownership title won't be handed to you until you are fully paid. The bank or financing institute is the legal owner of the car until the finance is settled, meaning, the bank or financing institute will have the full ownership rights until the car loan is paid off in full.
Futhermore, not to disregard, always keep in mind that you should also protect your personal line of credit and other very important matters.
Take note, if any problem that will arise related to any mistake move or overstep decision you made that will violate your contract with the Bank or Financing Institute, you will take full responsibility.
PLEASE READ further and it's very important for you to know.
All vehicles under bank mortgaged and in the middle of an auto loan term cannot simply just be sold to a new buyer. Why? Beforehand, let me explain that a mortgagee is an entity that lends money to a borrower for the purpose of purchasing a property. In a mortgage lending deal the lender serves as the mortgagee and the borrower is known as the mortgagor.
Let me give you an example, if you stand to be the mortgagor or borrower, you must follow the procedure outlines that you signed on their Promissory Note with Chattel Mortgage. This is part of your auto loan agreement with the bank.
As a general rule, you cannot simply sell your car in the middle of the term of the loan. You must comply and follow with the requirements and procedure contained in the Promissory Note with Chattel Mortgage which you entered into with the Bank or Financing Institute.
To understand your rights and obligations, you must carefully read the fine print of the signed copy of your Promissory Note with Chattel Mortgage. The banks do not use the same terms and conditions in the Promissory Note with Chattel Mortgage, so make sure you are reading the signed copy of your contract with the bank.
The typical Promissory Note with Chattel Mortgage will provide: "Sale, Encumbrance or Removal.
The Mortgagor (or borrower in common word name) shall not assign, sell, pledge, mortgage or otherwise dispose of or encumber or transfer possession of the Mortgaged Property or any part thereof, or attempt to do so, without the prior written consent of the Mortgagee (Bank or Financing Institute). The Mortgagor shall not remove or permit the removal of the Mortgaged Property from the Borrower/Mortgagor's address stated above without the Mortgagee's prior written consent. The Mortgagee shall have right to inspect the Mortgaged Property at any reasonable time.
"In order for you to sell your car, you need to get the prior written consent of the bank. You cannot sell and deliver the mortgaged vehicle to the new buyer for that would constitute a breach of your obligation to keep the car at the address stated in the signed valid contract that was executed." That such a transaction has evolved into an industry practice does not mean that it complies with the Promissory Note with Chattel Mortgage. It is legal that the bank can still object to the transaction and declare a breach of the contract terms, and seek to repossess the mortgaged car from whoever may be in possession."
The proper procedure for selling a car currently under a loan agreement will require both parties to secure the written consent of the bank, which will lead to a credit investigation of the potential buyer. Once the buyer’s creditworthiness has been secured, the mortgagee will now consider the loan pre-terminated and the old buyer must shoulder expenses like “pre-termination fees, cancellation of chattel mortgage, transfer of registration to the bank or buyer, notarization, documentary stamp taxes and related charges.” The new buyer will then engage with the bank to a new Promissory Note with Chattel Mortgage.
Remember, going through the "proper procedure" will prevent the mortgagor or borrower from “any legal penalties”.
Furthermore, please be reminded that late fees are charged every time you fall behind on your car loan payment. A daily interest can also be charged by banks as the overdue amount accumulates.
Now what's the best way to do?
If you have a car on loan and you already have past dues and you can no longer afford to settle your late payments obligation plus you no longer want to burden yourself with the monthly amortization that comes with it, one good way to do so is to “VOLUNTARILY SURRENDER your vehicle to the BANK. (Note: Banks don’t immediately repossess your car upon one late payment. There’s usually a maximum of three months grace period (depending on the actual contract you signed) to settle your outstanding balance before repossession takes place.
By having your car voluntarily repossessed, you avoid having your vehicle seized by a collection agency but will get a mark on your credit rating and will have a hard time getting a loan in the future.
Another option to pre-terminate your loan is to find someone who is willing to go through the correct and legal proper procedures with you. It may give rise to additional costs, but it’s better to follow the proper channels than facing lawsuit and having your car repossessed to boot.
Somewhere along the line, another last option is to look for a potential buyer who is willing to buy your car. Find someone who is likely going to pay off your debt in full before the loan term ends in order that your credit rating will stay the same.
Meanwhile, car buyers face a higher risk of being scammed when dealing with assumed balance programs. Just recently, News Online reported that a man who bought a car under the “pasalo scheme” got his car repossessed just two weeks after paying the down payment. Turns out, the original owner has been skipping payments for the vehicle and the unit was already on the verge of repossession when it was sold under “pasalo”.
Please continue reading...
✔️Buying a motor vehicle with Assumption of Mortgage.
Many people are not familiar with it.
It's very important that the person who is willing to take over the assumption of mortgage must inform the bank otherwise, there will be some risk. Okay, let's just assume that someone has availed to assume the loan obligation and to sum it all, the overall loan debt has been paid in full and it's time to get the collateral documents from the bank or financing institute..
COLLATERAL DOCUMENTS are the following:
1. The original "Certificate of Registration" and "Official Reciept" issued by the LTO for the vehicle.
2. The "CANCELLATION or RELEASE OF MORTGAGE" issued by the BANK to prove that the overall loan is now CLEAR from debt and already free from any liens and encumbrances.
3. The "PROMISSORY NOTE" (the contract provided by the BANK or Financing Institute and signed by the mortgagor/borrower when he/she/they applied the auto loan).
4. The notarial fee receipt
and other related documents.
Take note of this, before the collateral documents will be release, the bank checks everything and it's their standard operating procedure.
It's important that you need to know that many banks will not release the collateral documents even there's a valid notarized Deed of Sale of Motor Vehicle and Authorization letter presented if the mortgagee/borrower (whose name is in Title of ownership) owe money on huge debt defaults such as credit cards or personal property loans payments. The bank will require the mortgagee/borrower (this is the person whose name in the Title of ownership) to settle all those things first before the collateral documents will be release.
Another thing to remember too, the bank requires not expired ID's of the mortgagee/borrower with correct specimen signatures when getting the collateral documents.
Now, how about if the above mentioned senario arises (problem related to unpaid credit debts and others, expired IDs and so forth) and if the mortgagee/borrower can no longer find? How will you be able to get the collateral documents from the bank?
Trading a car in these new markets poses a great risk to both parties. Since a car is a form of personal investment, you don’t want your money going down the drain because of some easy scheme.
BOTTOM LINE:
“We buy Cars, Vans, Pick-up's, AUVs and SUVs with outstanding AUTO-LOAN balance or under bank mortgaged”
READ:
If you need to sell your VEHICLE before the lease or finance term is up, we can reconsider to give assistance and buy your used vehicle if your overall price is reasonable, meaning, "we can grab and accept your price." We provide finance to pay-out and settle immediately your over-all auto loan obligation.
With all due respect, in order NOT to mislead you with the information, the process that what we usually do is we don't assume the monthly auto loan obligation. The procedure that we do is we will payoff the entire auto loan balance, wherein, using our finance capital, we will settle and payout your overall loan debt in order that your entire obligation with the bank or financing institution will be CLEAN and CLEAR plus you get the excess CASH out from the sale of your vehicle. "Please note that this principal debt repayment process is applicable to vehicle whose loan is nearly at an end."
"Choosing to pay the car loan off in the shortest amount of time possible can help save a significant amount in interest than that of a loan with a longer term, meaning, paying off a car loan early will save you money in interest payments."
A friendly advise, contact the Bank Auto-Loan Department and ask, how much would be the total amount pay-off for your vehicle. There's a chance to get rebate and lessen the payout amount. Afterwards, please get back to me.
Note: Some car loans may come with a prepayment penalty or common term "early termination fee, a fee that you’d be charged if you paid off your loan early. Be sure, it's important to read the terms of your car loan carefully. If your loan includes this fee, consider whether the financial benefits of paying off your car loan early outweigh the cost of this fee.
Moreover, we are sorry to say that we may not be able to buy the vehicle under mortgaged if the borrower/mortgagor still have long term repay debt.. This means, the vehicle just recently purchased through long term financing scheme and paying off the auto loan early cannot be made. The overall auto loan payoff amount is absurdly high because of the interest rate has been fixed at marginal cost and to understand this clearly, the payoff amount will be more than the vehicle's current market value.
If you need more detailed information, just kindly get in touch with us.
