Chapter 5, Section E:|
Vehicle Title Lien Processes
Revised September 5, 2008
Security Interests (Liens) on Vehicles, Except Manufactured Homes
- Filing security interests
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
(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
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
Except for a
manufactured home or
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
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Note: If a TRD lien has matured plus one year the lien is no
longer valid.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
- 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
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