Mortgages
Filing of Mortgage C.R.S. 42-6-121
EFFECTIVE JULY 1, 2006 the date paperwork is received by the county Motor Vehicle office must be recorded on the title application. This date will be considered the Date Received and will indicate the date the paperwork was received in the County office. This field will be editable allowing the clerk to type the date the paperwork was received. The title application (barcode) and the issued Certificate of Title document will both show Received Date in place of File Date for DDP.
For a lien to be perfected on the date the paperwork is received, the county Motor Vehicle office must receive the following:
Ownership document; or
Application for Title/Registration
Counties should perfect a lien if an application for title (DR 2395 Application Title and/or Registration Application) is received with the mortgage paperwork, pursuant to C.R.S. 42-6-121(2)(a) which is sited below for reference. The county does not need to wait for the title to perfect the lien if the DR 2395 is completed and received.
Pursuant to C.R.S. 42-6-121(2)(a), “Upon the receipt of the electronic, original, or duplicate mortgage or certified copy of the mortgage and certificate of title or application for certificate of title. “
Mortgage or chattel agreement
Title and lien filing fees- C.R.S 30-1-103(1) and C.R.S. 30-1-103(2)(f)
If the paperwork is received and the date is stamped on the application and the application needs to be rejected, the date stamped will remain the date the lien is perfected. The date accepted is the date the information is entered into DRIVES. This will be the file date.
Mortgage or Chattel Mortgage C.R.S. 42-6-120
Mortgage documents (mortgage, security agreement, chattel mortgage, etc.) create a lien on a motor vehicle and constitutes notice of the existence of such lien.
To file a lien on a vehicle or manufactured home, the supporting documents necessary for establishing a Colorado title are required in addition to the acceptable mortgage documents.
Per C.R.S. 42-6-121 acceptable mortgage documents may be one of the following:
Signed original.
Signed duplicate.
Copy thereof certified by the holder of the mortgage.
The mortgage document must include the following:
Name and address of the debtor.
The name and address of the mortgagee.
The make, vehicle identification number, and year of manufacture of the vehicle.
The date and amount of the loan secured by the mortgage.
*Applicable signatures are required.
Note: The filings may be either with paper documents or electronically.
Note: Owner and lienholder cannot be the same unless the mortgagee’s address is different.
First Lien
The lienholder may secure their rights by submitting the mortgage documents for filing to the county motor vehicle office. The title will be provided to the lienholder C.R.S. 42-6-124.
Lien Filing C.R.S. 42-6-121
The lien needs to be recorded in the county where the borrower (vehicle owner) resides.
The authorized agent (County Clerk and Recorder) must be satisfied that the vehicle described on the certificate of title is the same as the vehicle described on the mortgage document.
The following information is to be shown on the mortgage document, either by means of a stamp or an attached certificate C.R.S. 42-6-121(2):
Date received for filing.
Name and address of mortgagee (lienholder).
Name and address of debtor (vehicle owner).
Amount secured by the vehicle.
Date of the mortgage.
Day and year on which the mortgage was filed for public record.
Other information regarding the filing of the mortgage in the County Clerk and Recorder office as may be required.
Mortgage Records C.R.S. 42-6-122
The authorized agent keeps the mortgages on file. This is separate from real property and personal property records. Filing, indexing and cross-indexing may be by any or all of the following and any additional process desired:
Make or VIN of vehicles mortgaged
Name of owner(s)
Title number
License plate number
Lender name (Lienholder)
The mortgage document may be returned to the lienholder after recording, scanning, and any other office procedures are completed.
Note: County policy may permit collection of an additional fee for the certified letter to the first lienholder.
Second Lien C.R.S. 42-6-129
The holder of a second or other junior mortgage on a motor vehicle may have their lien shown on the certificate of title.
The same procedures as first liens are followed with these additional steps:
The second lienholder must submit to the county.
A security agreement.
A DR 2395 Application for Title/Registration showing the first lienholder and themselves as the second lienholder.
A check for the title and filing fees.
The County Motor Vehicle office makes written demand to the first lienholder, by return receipt registered mail, for the certificate of title to be mailed or delivered to the clerk’s office.
If ELT only a letter is required from the lienholder.
Upon receipt of the title or letter, the application is processed in the usual manner.
The first lien should not be released.
All first lien information remains the same.
The filing date for the second lien is the date that the clerk received the title or letter and completes the filing of the second lien.
The date application accepted now becomes the date the second lien is filed.
The title will be provided to the first lienholder, showing both the first and second liens.
A second lien cannot be filed on a title that shows the first lien was not filed in Colorado. The primary lienholder would have to file their lien in Colorado prior to a second lien being filed. C.R.S. 42-6-123 indicates the title will be mailed to the lienholder on record. According to C.R.S. 42-6-124(b), the certificate of title with a “Not Filed in Colorado” lien will be mailed to the Colorado resident on record.
Note: County policy may permit collection of an additional fee for the certified letter to the first lienholder.
Third and Fourth Lien C.R.S. 42-6-129
The title will indicate up to four liens.
The same procedures as the first liens are followed with these additional steps:
The third/fourth lienholder must submit to the county
Security agreement(s).
DR 2395 Application for Title/Registration, showing all liens.
A check for the title and filing fees.
The county clerk makes written demand to the first lienholder, by return receipt registered mail, for the certificate of title or letter to be mailed or delivered to the clerk’s office.
Upon receipt of the title or letter:
The first and second liens should not be released.
All first and second lien information remains the same.
The filing date for the third/fourth lien is the date that the clerk received the title or letter and completes the filing of the third/fourth lien.
The acceptance date becomes the date of the third/fourth lien filed.
Paperwork submitted to State Motor Vehicle:
Colorado Certificate of Title, liens not released.
DR 2395 Application for Title/Registration, showing all liens.
DR 2574 Computer Generated Application, showing first and second lien.
DR 2574 Computer Generated Application, showing third/fourth lien, with black barcode removed.
The title will be provided to the first lienholder, showing all liens.
Length of Lien C.R.S. 42-6-127
Liens on motor vehicles are valid for ten years from the date filed, (effective date 10/01/09).
Liens on manufactured homes, trailer coaches, motor homes, multipurpose trailers, and truck tractors are for the duration of the lien as indicated by the maturity date on the security agreement.
The maturity date refers to the date on which the borrower's final payment is due. It is not necessary for the specific wording of "maturity date" to be contained within the security agreement.
Lien Extensions C.R.S. 42-6-127
Liens may be extended for successive three-year periods. If the lien is expired at the time of lien extension, a new title and lien must be filed.
Documents Required:
Title with active lien, not released or letter from lienholder if ELT
DR 2393 Certification of Extension of Chattel Mortgage the lien extension must:
Be signed by the lienholder.
Describe the vehicle by year, make, and VIN.
State the amount of the original lien.
State the amount still due.
Note: Lien amount on title may remain the original amount or the current amount of lien as long as it is less than the original amount.
Lien Assignments
A lien may be assigned to another lender if the original lien was filed in Colorado and is still active.
Lien should not be released on the Colorado title. “Lien Assignment” should be written in the lien release area.
A copy of the security agreement, with an assignment stamp or a separate assignment document, which includes the bank name and facsimile signature of an authorized bank representative is acceptable.
File in title owner’s county and remit appropriate title and filing fees.
A new title and title number are issued. The filing date and lien amount remain the same. A new reception number shall be assigned.
Note: The Extension date shall be exactly 3 years from maturity date or extension date if additional extension.
Note: If a lien extension is not applied for before the maturity date, a new lien must be filed (i.e.: refinance). The Maturity date on the new title shall be the original maturity date.
Note: If title is electronic, lender can release electronically or provide separate lien release at the county for a no fee title print.
Out-Of-State Mortgages C.R.S. 42-6-124(B)
When an out-of-state title shows an active lien and no lien release is submitted, the lien will be shown on the title with the words “NOT FILED IN COLORADO”. “LIEN (state)” must be in the previous title field. In this case, the title will be mailed to the titled owner.
Titles in Dealership Name C.R.S. 42-6-120
When an application shows the owner as a dealer and a lien is being filed, sales tax is due and a “Dealer Resale, No Taxes Paid” title cannot be issued. C.R.S. 42-6-120(2) specifies that liens on vehicles for sale in inventory, must be perfected under UCC (Uniform Commercial Code).
Release of Lien C.R.S. 42-6-125
Liens Filed in Colorado
Lien releases must be signed by the lienholder on the title itself or may be released on a separate lien release. The name of the lienholder on the release must match the name of the lienholder printed on the face of the title. All lien releases will require an agent’s signature and date of release.
A separate lien release on lienholder letterhead (not required if individual), must include:
Vehicle description (year, make, VIN)
The titled owner’s name(s)
Agent’s signature
Signed under penalty of perjury or notarized (if required) 42-6-125
Date
Note: A copy of the lien release is acceptable.
Liens Filed Out-Of-State
Lien releases for out-of-state titles and Colorado titles with a notation of “NOT FILED IN COLORADO,” have different formats, but all must have signature of the agent, and date lien was satisfied.
When an out-of-state lien release form is not available, a separate lien release will be accepted on lienholder letterhead (not required if individual). It must include:
Vehicle description (year, make, VIN)
The titled owner’s name(s)
Signed under penalty of perjury or notarized (if required)
Date
Agent’s signature
A lien release on the face of a Colorado title is not acceptable if the lien was not filed in Colorado. A separate lien release is required. A copy of a proper lien release is acceptable when submitted with a duplicate title application (see Duplicate Title).
Note: Refer to R.L. Polk, N.A.D.A., or Pecks reference books for notarization requirements.
Refinances
A refinance occurs when the lienholder is filing a motor vehicle mortgage with no name change or change of ownership.
The title does not require an assignment.
Any liens present on the original title must be properly released before the new lien may be recorded.
Transfer of Equity and Assumption
Transfer of equity and assumptions occur when a vehicle owner sells a vehicle to a different party and the lienholder does not file a new lien. The lienholder will either file a transfer of equity document or an assumption of a mortgage agreement. The paperwork for both should be completed as follows:
The Colorado title must be properly assigned to the new owner.
A new title number will be assigned.
The lien should not be released on the Colorado title. “Transfer of Equity” or “Transfer of Assumption” should be written in the lien release area.
Lienholder name will remain the same.
Lien amount should remain the same or may be for a lesser amount. The lien amount can never be greater.
The selling and buying parties must sign the transfer of equity document.
The transfer of equity document or the assumption agreement should be attached to the originally filed security agreement, (copy acceptable); or
Original file number referenced on document if filed in the same county.
Substitution of Collateral
A Substitution of Collateral occurs when a financed vehicle is replaced by a different vehicle utilizing the existing loan and owned by the same individual.
Original lien must be filed in Colorado in order to file a Substitution of Collateral.
The Colorado title/MSO must be properly assigned to the new owner.
A new title number will be assigned.
Lienholder name will remain the same.
Lien amount will remain the same.
Maturity date remains the same as the original maturity date.
The Substitution of Collateral document should be attached to the originally filed security agreement (copy acceptable); or
Original file number referenced on document if filed in the same county.
Name Changes
When a vehicle owner has a name change by marriage, divorce, a court order or is making a change by adding or deleting a name on the title, the lienholder will decide if the lien is to be refiled or will remain the same.
The procedure to re-file the lien is the same as that of a new application the lien is to remain the same:
The lien must not be released on the face of the title.
A new title number will be assigned.
The following information remains the same as the original filing:
Lien file number
Date lien filed
Lien amount
Name of first lienholder
Hypothecation/Third Party Grantor
The hypothecation document must identify the vehicle by year, make and VIN and the vehicle owner must sign the hypothecation document to confirm his/her agreement that the vehicle is being used for collateral on the loan.
Dealer Floor Plan
A floor plan is when a lending institution holds inventory as collateral for a Colorado licensed dealership.
When a Colorado licensed dealer defaults on their loan or goes out of business, the lending institution takes possession of the inventory.
Floor Plan Declaration must be included with the application.
If the lending institution is a licensed Colorado dealer, they may transfer ownership on the title/MSO.
If the lending institution is NOT a licensed Colorado dealer, they must take title in their name.
The odometer indicator will remain the same as disclosed from the seller to the defaulting dealer. If there is no odometer disclosure with the title documentation, odometer indicator must be “Not Actual.”
Repossessions C.R.S. 42-6-146
Valid (Unexpired Lien)
A lienholder may repossess a vehicle with a Colorado title upon default of the terms of any mortgage, not expired, and secure a title in the name of the lienholder by submitting the following documents:
DR 2393 Statement of Repossession or an out-of-state repossession form.
The lienholder must show on the Colorado title.
The lien must not be released. If the lien is released in error, a DR 2444 Statement of Fact will be required.
If the lienholder sells the repossessed vehicle without taking title in their name, the following documents are required:
Title assigned to the new buyer by the lienholder as seller.
DR 2393 Statement of Repossession or an out-of-state repossession form.
If an out-of-state lienholder with a lien filed in Colorado repossesses a vehicle and is unable to obtain title in their state, Colorado will issue a title to the lienholder with an out- of-state address. A letter (fax acceptable) from that state’s motor vehicle department on letterhead is required stating they will not issue a title.
Expired Lien
If the lien has expired and the lienholder has failed to file an extension within the proper time frames, the lienholder may file a new lien using the original security agreement, which was used to file the lien if:
The security agreement shows a maturity/expiration date in the future; or
The security agreement shows no maturity/expiration date The lienholder would then follow the repossession procedure.
If the lienholder cannot file the security agreement with a maturity/expiration date in the future, then they will be required to follow the bond procedure to establish title in their name when they repossess a vehicle with an expired lien.
Liens Not Filed in Colorado
If the lien is “NOT FILED IN COLORADO”, a repossession may be completed by submitting the following:
Title assigned to the new buyer. Lienholder must sign as seller.
DR 2393 Statement of Repossession or an out-of-state repossession form.
Certified copy of the mortgage document.