Mortgage Lien

Author: Terri Ewing | Date: September 2, 2008 | Filed In: Glossary

Mortgage Lien Defined

A mortgage lien gives the lender the right to take back the property when the borrower does not make the mortgage payments. A mortgage lien is filed by the lender and recorded in the county where the property is located.

Mortgage liens are ranked by title position. A first mortgage would be in first mortgage title position and a second mortgage would be in second position. The first position obviously takes precedence over anything below it. For more see Subordinationn.

When you refinance or sell and the loan is paid in full, the lender files a release of lien at the county. However, some lenders are a little sloppy at filing the release of lien and the next time you try to sell or refinance, you find there is an old mortgage lien still “leining” your property. You would think the lender would be more than happy to contact the county and get everything straightened out but you would be wrong.

Always keep all of your closing statements showing mortgages paid in full. You should also get a release of lien letter in the mail from the old lender so make sure you look for that about 3 or 4 weeks after you pay off the mortgage. Also, give the county about a month or so and check with them to see if the release of lien has been filed. This can save your bacon because it is no fun trying to get a lien released from months or years ago.

Author: Terri Ewing