What is a Lien?
Many people use the terms “mortgage” and “loan” interchangeably. However, a mortgage is not a loan, but rather, a lien. This term is unfamiliar and confusing to many people, but it is important to fully understand the concept of a lien in order to understand mortgages and other aspects of property ownership.
A lien is a type of hold on your property that is used as collateral for money or services you owe to another party. Liens are involved in a variety of situations in which an item of significant value has been paid for with borrowed money. The lien prevents the borrower from selling the property by preventing the transfer of title until after the lien-holder has been fully compensated. The lending party who holds the lien can also force the borrower to sell the property in order to collect money that is owed.
When purchasing property, it is important to make sure that no lien exists on the property. In other words, the property you purchase should have a clear title, meaning that the seller is the legally recognized property owner. If the property you purchase has a lien, you may not be the full owner of the property because the seller was not legally allowed to sell the property in the first place.
A mortgage is a way that a lender retains and secures certain legal property rights while the borrower still owes money to the lender. Before you decide to buy or sell your next piece of property, it is important to be familiar with the legal issues surrounding titles and mortgages to make sure that you are the rightful owner of the property.
Sometimes mortgage companies are dishonest and can cause homeowners to lose possession of their homes. If you are in danger of losing your home through a foreclosure, contact the Milwaukee bankruptcy lawyers of the DeLadurantey Law Office, LLC at 414-377-0518.