Can't clear old bank loan

brien23

brien23

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Brien
65 year old bank loan showed up on title search, bank is no longer and the bank that took it over has no record of the loan. Problem is FAA records show the loan never cleared and still part of the record. After 65 years I am sure the loan was paid off and the release was lost or never sent in all the original people in the sale are dead or a dead end. So the plane is for sale and the loan is still outstanding just how many would walk away finding out about the outstanding loan, or what does that do to the value of the plane.
 
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Attorney concentrating in aviation sales. Good luck.
 
GoFly said:
If the bank has no record of the loan, they should be willing to write a letter saying so.
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How many people would want the problem or just walk away.
 
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My plane has something similar. A women sent the faa an 8502-2 bill of sale (or whatever the equivalent was 30 years ago) with my plane's info and her info, but no seller info or signatures. For whatever reason faa scanned this incomplete form into the aircraft's permanent record. I looked her up to see about getting it figured out, but she's been dead for twenty years.

It didn't bother me, but I think the real question is if it would bother a bank making a loan. In my case the plane has successfully charged hands at least twice since then, so I don't think the chain of ownership is in question.

In your case, it wouldn't bother me being so old. There's no way there's any outstanding balance after that length of time. Imagine the interest if there was :biggrin: I would probably attempt to get a letter from the current bank stating they have no record so when I go to sell, and it comes up, I have a good answer.

I'd be interested to know if there's a reasonable way to get things like this repaired.
 
GoFly said:
If the bank has no record of the loan, they should be willing to write a letter saying so.
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They should but you may have to go up the ladder a little.

I had one of those with a twist - the bank used a different, unapproved, bank name, so the successor bank didn’t want to touch it.

Lots of people might let it go, but there are those who won’t so it’s a recurring problem. In mine, the seller was my client and the buyer wanted it cleared.

Jim K said:
I'd be interested to know if there's a reasonable way to get things like this repaired
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It depends. If the loan is recent enough to show on the books as paid, no problem. It “shouldn’t” be that much of a problem if it’s really old but you may have to go up the chain a bit.

Ultimately, one might have to file a quiet title case in court. Aside from cost, the problem with that is the timing. Not many buyers will wait for that. Fortunately in mine we didn’t have to.

So, a “reasonable way” requires a professional review. The aircraft title company handling the sale escrow is the first step. They see this often enough that they may have the ability to clear it easily. But with a few twists, it will require a lawyer
 
brien23 said:
How many people would want the problem or just walk away.
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Depends on the plane. If it’s a good deal to begin with and adding a couple grand to the price will still make it palatable, sure, go through with it.
 
You know what, transfer the plane and title to me, and I’ll worry about it for you!
 
brien23 said:
65 year old bank loan showed up on title search, bank is no longer and the bank that took it over has no record of the loan. Problem is FAA records show the loan never cleared and still part of the record. After 65 years I am sure the loan was paid off and the release was lost or never sent in all the original people in the sale are dead or a dead end. So the plane is for sale and the loan is still outstanding just how many would walk away finding out about the outstanding loan, or what does that do to the value of the plane.
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It wouldn’t worry me. I wouldn’t walk away. How can a bank that doesn’t exist make a claim on a lien?
 
luvflyin said:
It wouldn’t worry me. I wouldn’t walk away. How can a bank that doesn’t exist make a claim on a lien?
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The fact that the original lender doesn't exist anymore doesn't mean it or its assets haven't been acquired by another bank. This go on all the time and there were almost 500 of these during the 2008-2012 recession. So it may still exist. If you are taking a loan for the purchase, your bank may care, at lease enough to get you to purchase title insurance for it. Then, of course there's the risk that your buyer down the road may insist on clear title, so it's not really about whether the old bank can actually make a claim.

That said, depending on what my due diligence investigation showed, I wouldn't walk away either. But then again, since I did this kind of stuff professionally, I'd probably take the time to clear it after the purchase to avoid possible future problems when it was time to sell.
 
midlifeflyer said:
The fact that the original lender doesn't exist anymore doesn't mean it or its assets haven't been acquired by another bank. This go on all the time and there were almost 500 of these during the 2008-2012 recession. So it may still exist. If you are taking a loan for the purchase, your bank may care, at lease enough to get you to purchase title insurance for it. Then, of course there's the risk that your buyer down the road may insist on clear title, so it's not really about whether the old bank can actually make a claim.

That said, depending on what my due diligence investigation showed, I wouldn't walk away either. But then again, since I did this kind of stuff professionally, I'd probably take the time to clear it after the purchase to avoid possible future problems when it was time to sell.
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Yeah. He said that the bank that acquired the old one has no record of the loan. "...65 year old bank loan showed up on title search, bank is no longer and the bank that took it over has no record of the loan..." I look at it as if there is ever a problem, no arbitrator or Court if it goes Judicial, would do anything other than rule the Lien is not valid.
 
Also there is a statute of limitations on collecting debts.
 
I used to ferry aircraft for two dealers, both of whom would often run into old liens. Aerospace Reports was their go-to escrow/title company to get this type of stuff cleared.
 
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