Revised September 5, 2008

Security Interests  (Liens) on Vehicles, Except Manufactured Homes

• Filing security interests (66-3-201)
  
  A security interest (lien) in a vehicle of a type required to be titled and registered in New Mexico is not valid unless perfected (processed at time of application) as provided by Section 66-3-201 NMSA 1978. This provision does not apply to liens dependent upon possession or to property tax liens on manufactured homes (see Chapter 16).
  
  The certificate of title last issued shall contain the name and address of any lien holder, the date the security agreement was executed and the maturity date of the agreement.
   
• Filing effective to give notice (66-3-202)
  
  The filing of an application with the division and the issuance of a new certificate of title by the division constitutes constructive notice of all security interests in the vehicle described in the application.
  
  Except for a manufactured home or recreational vehicle, if the application is received by the division within 10 days after the date the security agreement was executed (60 days in the case of a manufactured home or recreational vehicle), constructive notice is effective on the execution date of the security agreement. The security interest is deemed to have been filed and perfected on that date and shall have priority over other liens subsequently attached or filed, except for tax liens filed by the state, county or federal governments.
  
  In all other cases, constructive notice is effective on the date of receipt noted on the title application. The constructive notice provided for in this section terminates 12 months after the lien's maturity date. Unless re-filed within 12 months after the lien's maturity date, the division may ignore the lien in the issuance of all subsequent certificates of title.
   

Vehicle Lien situations

• TRD lien on a title
  
  TRD may be the first or second lien holder on a vehicle in our database because of taxes owed to the state. The title presented may not show the lien and is not the most current title. The state holds the most current title.
  
  The customer must contact TRD at 827-0971 to negotiate a release of lien. In most cases the customer must satisfy the amount of the lien in order to take possession of the vehicle. It is possible that the lien may be more than the value of the vehicle. TRD can update our database to release the lien.
  
  Note: If a TRD lien has matured plus one year the lien is no longer valid. TRD uses 10 years as the life of a lien if the maturity date is not recorded.
   
• First lien left off of title (never recorded) and a second lien filed
  
  It may happen that the first lien on a vehicle was never recorded (perfected). If the customer then gets another lien, and the first lien holder finds out, the second lien holder (who did not know that the first lien existed, because it was never recorded) is under no obligation to surrender the vehicle or title to the first lien holder.
  
  The first lien holder will have to convince the court that the first lien is superior to the second. Both may accuse MVD of negligence, and the vehicle owner may have taken advantage of an MVD error to defraud both lenders.
  
  It is a felony to dispose of encumbered property without the secured party’s consent. The first lien holder should file a police report.
   
• Title application with a lien holder not signed by owner
  
  A title application with a lien holder may not be processed because the vehicle owner has not signed the application and is not available. The customer has the vehicle. In that case, the lien holder can request a title. The lien holder must provide proof of loan documents and an affidavit stating that the customer reneged on his agreement to sign the title application (or other reason). The lien holder must agree to pay title fee and excise tax. With a legal title in hand the lien holder can then repossess the vehicle.
   
• Lien holder wants to extend the maturity date
  
  Extension of a maturity date requires the registered owner’s signature on a Title and Registration Application for processing.
   
• Court ordered lien
  
  A court may place a first or second lien on a vehicle. If it is a second lien MVD will send a letter to the first lien holder directing them to remit their title in exchange for the new title. Include the letter with the other new title documents for microfilm.