Lien release and bank failure

By Rosemary Heins, University of Minnesota Extension

ST. PAUL, Minn. (3/30/2009) — The current economic situation creates many challenges. One may be for a person who had a loan through a bank that has failed, and now needs a lien release to sell their home or trade in a vehicle.

Normally you would go to the bank or savings and loan institution and request a lien release. But if the financial institution has failed, the process is different and may take more time.

The FDIC will be able to provide you with a Release of Lien on your home, vehicle, boat or other personal property if:

The lien holder is a bank or savings and loan institution that has failed and has been placed in FDIC receivership. Also, in some cases, if the lien holder is a subsidiary of a failed bank or savings and loan. If you are not sure, contact the DRR Customer Service Center toll-free at 888-206-4662.

The loan was paid off before the institution failed.

Or the loan was paid off to the FDIC after the institution failed.

A request for a Release of Lien must be made in writing and must detail exactly what you want. This request can be mailed or faxed to the FDIC along with a proof of payment to speed the request. Allow 10-14 business days for completion of the request.

The complete details of the service center address or fax number with specific information related to the type of property is available form the Federal Deposit Insurance Corporation website, www.fdic.gov . Look in the consumer information section.

Any use of this article must include the byline or following credit line:
Rosemary Heins is a family resource management educator with University of Minnesota Extension.

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URL: http:// www.extension.umn.edu/extensionnews/2009/lien-release.html This page was updated April 9, 2009 .
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