Typically, a person entering an agreement to purchase a home or other piece of real estate will need to secure a loan to help finance the purchase. A loan, of course, provides the necessary money to buy the property if the buyer is only able to pay a portion up front. However, entering into a mortgage agreement with a lender creates some important legal rights for the lender in case of default or a sale.
When a lender agrees to provide a loan for the purchase of a home or other piece of real estate, they will retain a security interest in the form of a lien against the property. In more basic terms, the lien gives the lender legal rights to the real estate that stops short of actual possession - that will always go to the buyer.
The lien will stay with the property as long as the loan is outstanding. Thus, if the buyer attempts to sell the property before the loan is paid off, the lender will be able to use it to require that the remainder of the loan be paid up before a sale can be completed. When paid, the lien will be removed from the title.
Of course, the lien also provides protection in a situation where the buyer is no longer able to pay the loan, and can be used in the foreclosure process to obtain possession of the home.
For those looking for more information about mortgage liens and what they might mean for a property buyer or owner, an experienced attorney can help answer questions. In a situation where a lender is attempting to use the lien as part of a foreclosure process, it can be important to ensure all legal rights are respected and enforced to avoid unfair treatment.