Tesla UCC subordination priority mess - original lender won't cooperate
Having a nightmare with a Tesla UCC subordination situation that's completely stuck. We're trying to refinance a client's Model S that's currently secured under a UCC-1 filed by their original lender (filed 18 months ago). The new lender is offering better terms but requires the original lienholder to execute a subordination agreement to establish lien priority. Original lender is dragging their feet and won't respond to our subordination requests. The Tesla's value has actually increased since purchase, so there's plenty of equity for both liens. Client desperately needs this refinancing to close by month-end for cash flow reasons. Has anyone dealt with stubborn lienholders refusing to subordinate on vehicle UCC filings? The original UCC-1 shows the Tesla as collateral with correct VIN, but we can't move forward without their cooperation on the subordination documentation. Any strategies for getting unresponsive lenders to execute UCC subordination agreements?
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AstroAdventurer
I've seen this exact scenario play out multiple times with auto refinancing deals. The original lender has zero incentive to cooperate because they're losing a profitable loan. First thing - check if the original loan agreement has any provisions requiring them to consider subordination requests within a specific timeframe. Some contracts include clauses about reasonable cooperation.
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Carmen Lopez
•Good point about checking the original loan docs. I'll dig through the paperwork to see if there's any subordination cooperation language. The original lender is a smaller regional bank, not one of the big nationals.
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Andre Dupont
•Regional banks can be more flexible sometimes, but also more stubborn when they don't want to lose business. Try calling their commercial lending department directly instead of going through regular customer service.
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Zoe Papanikolaou
This is why I always recommend clients check subordination policies before taking out the original financing. That said, have you tried offering the original lender some kind of incentive? Sometimes a small fee or agreeing to maintain other banking relationships can grease the wheels.
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Carmen Lopez
•We haven't offered any incentives yet - that's actually a smart suggestion. The client does have other accounts with that bank, so maybe we can leverage the relationship angle.
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Jamal Wilson
•Be careful with incentive offers though. Some lenders will see that as desperation and dig in even harder. Make sure any offer seems reasonable and not like you're begging.
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Mei Lin
Had a similar mess last year with a BMW subordination that took 3 months to resolve. What finally worked was having our attorney send a formal demand letter citing the original lender's duty of good faith dealing. Sometimes legal letterhead gets attention when phone calls don't.
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Carmen Lopez
•Three months sounds brutal! Our timeline is much tighter. Did the legal letter actually threaten anything specific, or was it just formal pressure?
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Mei Lin
•It referenced potential tortious interference with the refinancing contract and highlighted their lack of reasonable basis for refusal. Wasn't exactly threatening, but made it clear we had options if they continued stonewalling.
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Liam Fitzgerald
•Legal letters work great until you actually have to follow through. Make sure you're prepared for that possibility before sending anything too aggressive.
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GalacticGuru
Quick question - is this definitely a subordination situation, or could you structure it as a UCC-3 termination followed by a new UCC-1 filing? Sometimes paying off the original loan entirely and refiling is cleaner than trying to get subordination cooperation.
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Carmen Lopez
•The client doesn't have cash to pay off the original loan entirely - that's why they need the refinancing. The new lender requires subordination rather than a complete payoff structure.
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GalacticGuru
•Got it. Some refinancing lenders will actually fund the payoff of the original loan as part of their lending package, then file their own UCC-1 as first lien. Might be worth asking if they'd consider that structure instead.
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Amara Nnamani
This whole situation would've been caught early if you'd run the documents through Certana.ai's UCC verification tool. When I upload both the original UCC-1 and proposed subordination docs, it flags potential priority conflicts and suggests alternative structuring approaches. Caught a similar Tesla subordination issue last month where the original filing had a collateral description mismatch that would've voided the subordination anyway.
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Carmen Lopez
•That's interesting - I hadn't heard of using document verification for subordination planning. How does it identify priority conflicts before they become problems?
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Amara Nnamani
•It cross-references the UCC-1 collateral descriptions with the proposed subordination terms and flags inconsistencies. In that Tesla case, the original UCC-1 listed 'Model S sedan' but the subordination referenced 'Tesla vehicle' - technically different collateral descriptions that could've caused priority disputes later.
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Giovanni Mancini
honestly why are teslas always such a pain for financing stuff?? seems like every EV deal has some weird complication
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AstroAdventurer
•It's not really Tesla-specific - any high-value vehicle refinancing can get complicated when original lenders don't want to cooperate. The subordination process is the same whether it's a Tesla, BMW, or pickup truck.
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Giovanni Mancini
•fair point, just feels like i see more tesla drama in these forums lately
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Fatima Al-Suwaidi
Have you considered going above the loan officer to their supervisor or department manager? Sometimes the person handling your request doesn't have authority to approve subordination, and you need to escalate to someone who does.
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Carmen Lopez
•We've been working with someone who claims to be a supervisor, but you're right that they might not be the actual decision maker. Worth pushing higher up the chain.
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Dylan Cooper
•When you escalate, bring documentation showing the Tesla's current value vs. the loan balance. If there's substantial equity, most reasonable managers will approve subordination rather than risk customer complaints.
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Sofia Morales
This is exactly why subordination agreements need to be negotiated BEFORE the original financing closes. Trying to get cooperation after the fact puts you at their mercy. For future deals, always include subordination cooperation clauses in the initial loan documents.
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Carmen Lopez
•Definitely a lesson learned for future transactions. Unfortunately doesn't help with the current situation, but good advice going forward.
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StarSailor
•Hindsight is always 20/20, but most borrowers don't anticipate needing to refinance when they're signing the original paperwork. The market changed and created this opportunity.
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Dmitry Ivanov
Try reaching out to the bank's business development officer or relationship manager if your client has other accounts there. Those folks are motivated to keep customers happy and might be able to push the subordination through internal channels.
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Carmen Lopez
•Great suggestion! The client mentioned having business accounts with them, so there should be a relationship manager we can connect with.
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Ava Garcia
•Relationship managers are gold for situations like this. They have different priorities than the lending department and actually care about customer retention.
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Miguel Silva
•Just make sure the relationship manager understands the urgency. If they think it's just a routine request, it might sit on their desk for weeks.
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Zainab Ismail
Last resort option - have your client threaten to move all their banking business elsewhere if the subordination isn't approved. Banks hate losing entire relationships over one transaction, especially if the client has multiple accounts and good payment history.
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Connor O'Neill
•That's pretty nuclear though. Once you threaten to leave, there's no going back, and they might call your bluff.
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Zainab Ismail
•True, but if they're being completely unreasonable about a straightforward subordination on a well-secured asset, what's the relationship worth anyway? Sometimes you have to be willing to walk.
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Carmen Lopez
•I'll keep that as the final option if everything else fails. Don't want to burn bridges unless absolutely necessary, but good to know it's on the table.
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QuantumQuester
One more verification step before you go too far down this path - double-check that the UCC-1 filing is actually valid and enforceable. I've seen cases where subordination fights turned out to be unnecessary because the original UCC had fatal defects in the debtor name or collateral description. Upload both the UCC search results and the subordination docs to Certana.ai to verify everything aligns properly before spending more time battling the original lender.
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Carmen Lopez
•That's a really smart verification step I hadn't considered. If there are defects in the original filing, it could change our entire approach to this situation.
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Amara Nnamani
•Exactly what I was getting at earlier - document verification catches these issues before they waste everyone's time. Better to know now if the original UCC-1 has problems that affect the subordination process.
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