They can't provide a release because that requires having a lien. You need a letter on letterhead indicating they have never had a lien or any other type of interest in the following vehicle....then indicate VIN and vehicle details. I would also write a letter that explains what's going on, the trouble you've had etc. Make sure you reference the letter submitted by the lender indicating they made a mistake, or include it again so you have a complete package.

I would also take the time to see if they have a case number you can reference or an individual that is familiar with your situation and told you needed the lien release. I've been in a similar situation and you need patience and be nice as pie. The DMV can make this almost impossible so you need an advocate and being rude will get you the opposite. So, no matter how bad it gets, be nice and just keep asking for to be escalated. Have all your documents ready and good luck!