Interesting. Here (Ontario), we get a two piece registration document, which you are required to carry with you when driving. One half is the "vehicle portion" and the other is the "plate portion". Unless you are leasing, you will always have the ownership (vehicle portion) in your name. There is no separate "title document" that is held back.
A lender will register a lien against the vehicle, but it's up to the buyer to check for one before handing over their money. There is a "used vehicle information package" that a private seller is supposed to get and provide to the buyer, which shows any liens, ownership history, etc, but not everyone does. An informed buyer will avoid those people. :)