Title 2 Transportation
Vehicle Services
2269 Issuance of Title Through Repossession and Sale (Recourse) (Formerly Reg. No. 61)
1.0 Applicability.
This policy, which applies to the issuance of a Delaware certificate of title after a vehicle has been repossessed by a secured party in connection with a recourse security agreement and transferred to a dealer, becomes effective immediately.
2.0 Repossession of Vehicle by Secured Party
When a vehicle for which a Delaware certificate of title has been issued is repossessed by a secured party pursuant to Delaware law, and the security agreement provides for recourse by the secured party against a vehicle dealer, and the security agreement is reassigned and the repossessed vehicle is transferred by the secured party to the dealer, then, in connection with a request to issue a certificate of title in the name of a purchaser of the vehicle, Form MV 518 (State of Delaware Certificate of Repossession and Sale (Recourse)) shall be completed in full by the secured party and the dealer as described in Paragraph 2.0 below.
3.0 Form MV 518
Form MV 518 shall be completed as follows:
3.1 The secured party shall complete Paragraphs Nos. 1, 2, 3 and 4 of the form and shall execute the form in the indicated area.
3.2 The dealer shall complete Paragraph No. 5 of the form and shall execute the form in the indicated area.
4.0 Reassignment of Security Agreement
At the time the security agreement is reassigned by the secured party to the dealer and the secured party transfers the repossessed vehicle to the dealer, the secured party shall deliver to the dealer Form MV 518 along with the certificate of title to the repossessed vehicle. At the time of the delivery of the form by the secured party to the dealer, the secured party shall have completed and executed the form as provided for in Paragraph 2.1 above. When the repossessed vehicle is sold by the dealer, to obtain a Delaware certificate of title in the name of the purchaser of the vehicle, the dealer shall submit to the Division of Motor Vehicles Form MV 518 completed and executed by the secured party and the dealer as provided for in Paragraph 2.0 above and the Delaware certificate of title for the repossessed vehicle. The dealer shall mark the face of the certificate of title to reflect the fact that the lien noted thereon has been satisfied and shall complete the appropriate area on the reverse side of the certificate of title.
5.0 Exception
This procedure shall not apply to those repossessed vehicles for which liens have not been entered against the title pursuant to Chapter 23, Title 21 of the Delaware Code.
