I just received a similar letter from VW, however my letter states that they did not receive the odometer and title records from our closing appointment on 12/20/2016. No check box question was present in my package on if I did in fact turn these records over (which I did). What I find irritating is VW's presumption that the lost records are my responsibility and that I am obligated to provide them powers of attorney, sign off on a odometer figure and confess to a lost title.
I plan on responding to VW that such records were provided to their agent and replacement of those records are their responsibility. In addition I will be sending a copy of the VW correspondence to my Motor Vehicle Department and VW can take it up with them.
Why make it difficult on them? It doesn't matter how the title was lost, they need documents from you to prove they are the legal owners of the vehicle in their possession.
Power of attorney grants them the legal authority over the vehicle you sold to them
signing off on the odometer is simply a statement of fact
"confessing" to a lost title doesn't mean anything since this isn't a criminal proceeding and there isn't any harm to your written acknowledgement that the title is now lost so the current owner can obtain a re-issued title
In California, the request form simply states: "lost" (among other reasons) and doesn't assign "blame" to one party or the other. It could be lost by the previous owner or it could blow out the window while the buyer is driving home. The state doesn't care as it's all the same thing--a lost title. Seems to be roughly the same paperwork in MO.
If the previous owner refuses to declare to the DMV that they are/were the previous owner and relinquish ownership claim to the current owner, then the current owner has to go through a relatively stringent process in order to obtain title (court order or surety bond, for examples). You have nothing to lose by helping them demonstrate to the DMV that they own the vehicle and nothing to gain by refusing to help--other than some sense of victory derived from making their process more difficult than necessary. I understand there's value in that for some people, but come on if that's really your position both parties just want to move on so why drag it out?