On April 2, 2004, in exchange for a $10,000 loan, Dan granted Bank a security interest in the Honda Civic he planned to purchase with the loan money. On April 3, Dan purchased a used Honda Civic for $5,000. On April 10, Bank had its lien noted on the title certificate for the vehicle (issued by Missouri).

The next week, Dan moved from Missouri to Kansas. Dan then contacted his good friend at the Kansas DMV and obtained a clean title certificate issued by Kansas. In October 2007, Dan went to Jack’s Honda Dealership and traded his used Civic for a new Honda Accord. Dan stopped making his payments to Bank.

Which statement is correct?

1. Bank can repossess the Civic because the title certificate issued by the Kansas DMV was fraudulently obtained and is not valid.

2. Bank cannot repossess the Civic because Jack’s Honda is a purchaser for value.

3. Bank cannot repossess the Civic from Jack’s Honda because it did not re-perfect in a timely manner.

4. Bank can repossess the Accord because it is a “proceed” of the Honda Civic.

5. Both 3 and 4 are correct.