Lien Foreclosure Process

There are many things in life that we accept without thinking much about what they really mean. For instance, many of us drive our cars without thinking much about the processes going on under the hood. When it comes to our homes, the phrase lien foreclosure process may have the same effect as discussing the processes of your car’s engine. You know it exists but you don’t have a clue what it means – other than it sounds unpleasant.

A Lien Is A Legal Claim

The lien foreclosure process is a phrase that refers specifically to foreclosures that result from liens. There are several kinds of liens such as mechanic’s liens, judgment liens, mortgage liens and tax liens.

We know what a foreclosure is. That is when your right to own a particular piece of property is removed through a legal procedure by a person or a company that holds a lien on your property. Basically when you have a mortgage, the deal is like this – the bank gives you money and you give the bank a lien on your property. A lien is simply a legal claim against an asset and it is used to secure a loan. When the property is sold this claim must be settled. A mortgage lien is part of the typical arrangement when you buy a house and get a mortgage.

Taxes And Lien Foreclosures

The other liens mentioned come up when you incur a bill and do not pay it. So long as you own something and you default on a loan or a bill, the other party has the option to attach that bill to what you own. You might not have the money to pay your taxes but you do own your house. The tax people can then apply their tax lien to your house and sooner or later, you will likely sell the house. The tax bill is then paid.

Sometimes the taxes won’t wait. You’ve heard of houses going up for sale for taxes. All this means is that the tax lien was exercised and the house was foreclosed on in order for the taxes to be paid. Judgment liens and mechanics liens usually wait until the property is sold before they are collected. However, if a person has judgment liens and mechanics liens they usually have other financial problems as well and there is a good chance that the property will be up for sale sooner rather than later.

Educate Yourself

If you are entering into the lien foreclosure process, you'll want to devote some time into educating yourself on the options available to you. We know of no better way to do this than to read the free report you can get here.