What is a foreclosure for claim of lien?

A lien is typically defined as a claim against a particular item of property. A lien is also known as a security interest. A lien may be made by entities such as the government, a bank, or a person duly authorized by law to create a lien. A creditor, with the consent of the property owner, may also create a lien.

If a property owner defaults on the payment of a loan, a foreclosure of a claim of lien indicates a creditor may take legal action to acquire the collateral applied for the aforementioned loan. A number of states permit lenders to take possession of a property put up as collateral through strict foreclosure.

This means the lender may reclaim said property by declaring that the owner has missed payment/s on a loan. Other states need the lending entity to litigate and file a suit for foreclosure, and gain judgment prior to confiscating and selling off the property.

The amount attained from a foreclosure sale is primarily used to pay the associated debt, plus any related foreclosure expense. In case the proceeds are greater than the debt, the difference goes to the borrower. If the amount cannot cover the debt, a deficiency balance occurs. The lender may choose to go after other assets of the property owner.

The Right of Redemption, the borrower’s legal right to redeem property, is applicable in many states. This entails that the owner may reclaim his property after giving the creditor an amount equivalent to the unpaid debt and other expenditures.

A lien accomplishes three things. It prohibits the property owner from transferring or selling the property in question until the debt is paid or addressed. The lien also permits the claiming entity to proceed with foreclosure and the property’s subsequent sale to address the outstanding amount. Lastly, the lien determines the precedence between a number of creditors who may assert their claims over property associated with the lien.

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Moe Bedard
Founder at LoanSafe.org
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications. I currently live in Carlsbad, California with my beautiful wife and children.
  • Jackie James

    Just found out that my 86 year old neighbor who is a widow with signs of early dementia may lose her home after 45 years. She tells me that she has been paying her mortgage on time but the lender will not accept her payments and sends them back to her. She tells me that she has a lien on her property also. She has no surviving family members and she seems to be on her own and alone. She would like me to help. What questions do I need to ask of her or the mortgage holder to best help her? She had a stroke and was ill for a few months and things got out of control. No foreclosure action has started yet but it sounds like foreclosure could occur at any time. How can I best help her? Any advice?

  • roberta clifford

    I was selling a home by contract before the buyer made the second payment the house caught fire and was beyond repair The buyer had home owners insurance but did not have my name on the policy An attorney is going to help me get money for my loss. The problem is that the city is going to demolish the house and thyey have contracted a company to do it. They are going to put a lein on the property and sell the lein I was told i have no control over it because i’m not the owner anymore is this true? Do i have any rights according to my attorney i have to deal with the cities decision.

  • carol winter

    my son bought a timeshare and it was put in my husband and myself name in 2003 due to lack of work we have been unable to pay this year I have received threat letters for past 6 month due to my son getting work I called to pay this years payment and they have said I don’t own any more that it is fore closure I don’t know what to do with this now this timeshare has been nothing but problems we paid 13,000 pounds and maintenance goes up every year its now at 15000 dollars could you please help thanks