Lien of Foreclosure Law and Legal Definition
When a person buys a real estate by getting a loan, that person usually has to execute a mortgage deed which creates a lien on the property. By doing so, the property becomes collateral or security for the loan. The mortgage note will specify the payment frequency, the interest rate, the duration of the loan and the projected maturity date. If the borrower violates the terms of the mortgage loan, the lender who is also the owner of the lien can initiate a foreclosure action to recover the security (the real estate) in order to recapture the outstanding balance and the accrued interest due on the mortgage loan. The lien will remain on the property until the loan balance goes to zero, or there is a foreclosure for non-payment. Once the loan is closed and the mortgage signed, the lien is recorded, and becomes part of the title to the property. This is referred to as lien of foreclosure.
