I think people are assuming that its your duty to do all of the title research and present that to the DMV. Its not. Its perfectly legal in all 50 states to purchase a car via a Bill or Sale and then go to the DMV and have them do the title research and help you obtain a clear title to the car. You're not doing anything illegal or shady. How people screw up is by involving previous owners, potential lien holders, etc. in the process that is essentially between you and the DMV. By bringing all of this information to the attention of the DMV, or even worse, having those third parties bring it to the attention of the DMV, the bureaucracy now has to act upon it. At a minimum you will pay all the fines, fees, and penalties that those other folks have avoided. Tell the DMV the truth, you bought the car for x dollars and the seller gave you a bill of sale. Don't volunteer any more information.