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.
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?
Jackie James(Quote) (Reply)
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