I went through the same thing but what I had to do was to get a bonded title, the same day register the car in my name. Basically the previous owners title loan place was too slow in filing a lien but because I learned with any car purchase you need to get it put in your name immediately to protect yourself as well as releasing them of any damage you could do to them by driving a car around that you could do damage with in their name. I am afraid that it is a buyer beware state so it is always going to fall to us. If the car had been registered and titled in your name quickly then that title loan place would have no recourse on you that's why it's important to get that done immediately purchase a car
Sorry mixed up titlemax with CarMax, but the advice still applies you should go after both.. Titlemax will likely force the sale of the car at auction which will likely fetch them more money due to your improvements and the seller... Well he knowingly entered into a fraudulent contract with you so you can sue him for the money you paid him, for your court costs and you can ask the judge to impose punitive damages due to this being done with ill intent and malice.