Understanding lien in real estate and its satisfaction
Lien basically is the right to take possession of any property that belongs to someone else until that person clears a debt that he owes. It is a right in legal terms, granted by the property owner, to let someone take over it in case an underlying obligation like a loan repayment is not met.
What is lien?
Thinking in terms of real estate, lets us try and understand it better with an example. Suppose you take loan from the bank in order to buy a new house from its owner. So the loan money is used by the borrower to get hold of the new house.
The bank now creates a lien on the house, which is more commonly called the mortgage. In case you are unable to pay back the loan amount you borrowed from the bank, the bank has the right to take possession of your house, and sell it in order to recover the loan amount. This is called foreclosure of property.
When the money is paid back, or the debt is cleared, the lien is said to be satisfied. In that case, nobody can come for your house, neither can the bank have any say if you want to sell it in the future. That is basically Real Estate Lien Satisfied.
The role of Deed of Trust
Now it is absolutely necessary to put the arrangement in a paper, which serves as both proof and reminder to all the parties in agreement. A deed which contains the terms and conditions of repayment, as well as the conditions of foreclosure is called the deed trust.
All intricate details of the pre-determined arrangement are put on a Printable Deed of Trust Form. Liens and mortgages are public records, and therefore deeds of trust have to be on paper or printed matter.Download PDF File Download Word File via Google Doc Download Word File Download DOCX File Download RTF File Download ODT File Download EPUB File Download ZIP File