Definition
A lien is a legal claim against a property. It serves as collateral for a debt, giving the lienholder the right to seize the property if the debt is not repaid.
Understanding the Role of Liens
Liens appear during the mortgage process as a legal claim on property. They ensure that the lender can recover the loan amount if payments aren't made. In simple terms, a lien gives the lender a right to the property until the loan is paid off. Example: If you borrow $200,000 to buy a home, the lender has a lien for that amount. Once you pay the mortgage, the lien is removed. It's not a tool for immediate property takeover; it's more like a safety net for the lender. Liens ensure that properties are sold fairly, protecting both buyers and lenders.
