Is this normal for a credit union? (car purchase)

Factual Questions
1

So I have a guy lined up to buy my 1996 Chevy Impala SS this upcoming weekend. He gives me $200 cash to hold the car, and tells me he’ll get financing through his credit union which is Northrop Grumman (where he works).

So he calls me in a quasi panic this evening and tells me that the credit union is demanding to see the ACTUAL title for the car. Now this guy seems pretty legit, but that’s a very strange request in my opinion. I don’t even have a way of showing it to them if I wanted to because I’m in San Diego and he’s in LA (as is his credit union), but he seems to think a copy won’t even be satisfactory.

Still, he said he’ll take a copy (which I faxed him) and see what he could do. So my question is:

  1. Is that actually a reasonable request for a credit union to make as part of giving this guy a loan (for approximately $10,000)?

  2. If I’m wrong and this guy is a thief, by sending him a fax of the title, have I potentially already screwed myself?

Regarding #2, I would think the rainbow colored, watermarked paper would make that difficult-to-impossible to fake if he just took the information off of that.

2

A family member bought a car thru a credit union 2 weeks ago. No proof of title needed (as yet). Things take a while around here…

This is sure sounds like a scam (buy the “buyer”) to me. Don’t part with the title until you have all the dough.

3

Doesn’t every title nowadays have the “I sell this car to Joe Schmoe” stuff on the back? Mine (from Texas, and the truck was registered in FL before) does. I don’t know how much damage he could do with a faxed copy of the front of the title only.

As to his credit union needing the ACTUAL title, what if you still had a loan on the car and your bank had the title? Do you think your bank would mail some POTENTIAL buyer the title to car that they held a lien on?

Maybe this guy had problems with his credit union before, and they are imposing harsh limits on him in order to discourage him from borrowing money. Whatever it is, it sounds fishy.

4

Pilot141 in many states the owner retains the title regardless of loan status. The title carries a lien much as does a mortgaged house. Thus without a “release of lien statement” it’s impossible to sell the vehicle even with possession of the title. The “release of liens” that I’ve received, though, seem really easy to forge. I have to assume/hope that there’s something electronic in place in addition.

5

Any auto thieves out there?

Could this guy be trying to use a copy of your title to get a legit title from the state for another, similar car? Auto identity theft, so to speak.

“Mr. State Titleman, my title got burned up in a fire but I do have this copy. Can you issue me a new title?”

6

I work in a business that sells semi-trailers. It is not unusual for my customers’ lender to request a fax copy, front and back, of the title(s) for vehicles to be financed. The title is the collateral for the lender and they want to make sure everything is in order before they cut a check. IMHO, the only thing Yarster should have done differently would be to fax the title directly to the credit union. While there is no great risk involved, there is also no need for the purchaser to have a copy.

Highly unlikely. State Motor Vehicle Departments are VERY anal about correctly completed titles. The “chain of custody” must be complete - “A” bought vehicle originally, “A” sold to “Dealer B”, “Dealer B” sells to “C” and assigns title to “C”, “C” has title put in “C’s” name, etc. A licensed dealer is the only entity that can transfer a title without their name being on the front. Some states require that all this be notarized. I’m not saying it’s impossible to circumvent the process but it is very difficult.