Legal Question in Credit and Debt Law in Maryland

We are a credit union and gave an auto loan to our member - we paid off Wells Fargo Bank. After paying off Wells Fargo - we discovered that there is a 2nd lien on the vehicle. Our member obtained a loan with a finance company and they placed a lien on the vehicle. This will make us second lien to the finance company. Q: may we repossess the vehicle without paying off the finance company? If the finance company that is in first position decide to repo the car - must they payoff us off to obtain clear title??? Please advise


Asked on 1/02/14, 11:41 am

1 Answer from Attorneys

Brett Weiss The Weiss Law Group

While the credit union can repossess the vehicle, it must satisfy the first lien from the proceeds before it can receive any monies. If the first lien holder repossesses the vehicle, it does not need to pay the credit union to transfer clear title, although any net proceeds in excess of the first lien would need to be paid to the credit union.

The credit union can, of course, sue the borrower directly for a monetary default.

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Answered on 1/02/14, 12:17 pm


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