What is a lien?

A lien is a document recorded at the county clerks office, against a person OR against a piece of real estate, and it notes an amount of money due to the lien holder.  It signifies the lien holder’s right to stand in line to get paid the lien amount plus interest/penalties, when a property sells.  Liens stack up in chronological order.  The first lien to be recorded at the clerk’s office is in “first position”. 2nd is in 2nd position, and so on.  

1. A lien on real estate, must be recorded at the county clerk’s office, in the county in which the property is located.

2. Attachment: When a lien is recorded at the county clerk’s office, against a person, that lien, automatically and instantly, attaches to all pieces of real estate that person owns in that county.  The same lien may be recorded in multiple counties, in order to have it attach to all real estate the person owns in those counties – especially when a property is known to span county lines.  This is why we have to search al buyers’ names in a purchase.  We want to make sure NO liens attach to the property of a buyer, before we record the lender’s mortgage.  We want the lender’s mortgage to always be recorded in first position.

3. Types – There are all types of liens: Mortgages, judgment liens, state/fed/local tax liens, unpaid child support liens, HOA liens, etc.  All have different expiration time periods. See #5 below.

4. Yes, a “mortgage” is a lien.  It’s simply a lien held by a lender.  It essentially states, that if you pay you stay, and if you don’t, you won’t = meaning, if you default on your loan, you’ll be foreclosed upon and your home will be repossessed by the bank.  The bank will then sell the house and pay off/down your loan with the sales proceeds.  If there is not enough sales proceeds to pay off your loan (a “shortfall”), then the lender will file a default-judgment-lien against you, and you will not be able to buy another house without first paying off that shortfall, plus legal fees, interest and penalties.  You may be able to negotiate some settlement that is less than the full amount owed, in exchange for release of this default judgment lien – you may even get the lender to foreclose on you withOUT a default judgment for any shortage.

5. Expiration – Different liens are valid for different lengths.  Some do not have expiration dates. Call your local county clerk’s office for the schedule of validity/expiration…or just call Jett Title.

6. Releases – Once a lien is satisfied (either paid in full, or when a partial payment is accepted in exchange for release), then a lien release must be filed at the county clerk’s office by the lien holder.  Releases are usually just 1 of 2 pages in length.