I obtained a Home Equity Line of Credit, and as part of that my vehicle loan was to be paid off. The HELOC had the wrong payoff amount listed on the loan. Now the vehicle loan bank is refusing to deposit/credit the account with the check because it is short. They wont even apply it as a payment and the rest to principal. They are just holding the check. Can they do that?
Based on the question, I assume the HELOC lending bank sent the car loan payoff check. The bank with the car loan doesn't want to apply the check because it was intended to pay it off. Since it is short, they won't release the title and someone may be expecting that title if the check clears.
The key here is to make up the difference either with funds you have on hand, or another draw on the HELOC. Hopefully you are not paying interest on the car loan and the HELOC at the same time since the HELOC check is still outstanding. If freeing up the title to your car doesn't matter, you could either have the HELOC check deposited to your checking account where you can write a personal check to pay that loan ahead, or the HELOC bank will reissue it so that the car loan bank will apply it and know that no title is required. (If this was the intended purpose, a call from one bank to the other may also clear this up for you.)
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Based on the question, I assume the HELOC lending bank sent the car loan payoff check. The bank with the car loan doesn't want to apply the check because it was intended to pay it off. Since it is short, they won't release the title and someone may be expecting that title if the check clears.