Define: Conventional Lien

A conventional lien is a legal claim or encumbrance placed on a property by a lender or creditor to secure repayment of a debt.

Unlike other types of liens, such as tax liens or mechanic’s liens, a conventional lien is voluntarily created by the property owner as part of a loan agreement with a lender.

A conventional lien can be used to secure various types of debts, including mortgages, home equity loans, and personal loans.

A conventional lien is created through a legal document called a mortgage or deed of trust, which is signed by the property owner and the lender. This document is then recorded in the public records to provide notice to other potential creditors.

Yes, a conventional lien can be removed once the debt is fully repaid. This is typically done through a process called lien release or satisfaction, where the lender provides a document stating that the lien has been released.

If a property owner fails to make the required payments on a debt secured by a conventional lien, the lender may have the right to foreclose on the property and sell it to recover the outstanding debt.

Yes, a conventional lien can affect the sale of a property. Before a property can be sold, the lien must typically be satisfied or released to provide clear title to the buyer.

Yes, a conventional lien can be subordinated to another lien if the lender agrees to subordinate its position. This is often done to allow another creditor to have a higher priority lien on the property.

Yes, there are legal limitations on conventional liens, such as usury laws that limit the interest rates that can be charged, as well as various consumer protection laws that regulate the terms and disclosures of mortgage loans.