So, you sold a car that you did not own?

yeah thats illegal. The DMV will not issue a new title with your buddies name on it unless they had a title to transfer out of your name. If the Bank still has the title with your name on it, then that [transferring the title to your friend] is not possible, because they would still have the title and would not send it out to have your friends name put on it since YOU owe the money to the bank.

If the bank still has a lien, then THEY are the legal owner until they release their lien. You signed paperwork (contract) withthe bank saying YOU would make good on your loan and pay all of your payments.

Sounds to me like you are doing whats called a "Straw purchase" and better not let your bank find out. They can repo the car just based off that if they want to. read your contract.