Lien

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Lien

A security interest in one or more assets that lenders hold in exchange for secured debt financing.

Lien

The ability of a lender to sell the collateral if the borrower defaults on a loan. For example, if a loan is secured by one house, the bank or other lender has a lien on the house. It may foreclose and sell the house if the borrower does not make payments in a timely manner. A lien makes a loan less risky for the lender and may entitle the borrower to a lower interest rate or even a higher line of credit. See also: Secured Bond, Mortgage.

lien

The legal right of a creditor to sell mortgaged assets when the debtor is unable or unwilling to meet requirements of a loan agreement. A lien makes a bondholder's claim more secure.

Lien.

A lien exists when you owe money to a lender on a particular vehicle or other asset, such as real estate, that has been used as collateral on a loan.

An asset on which there's a lien can't be sold until the lienholder has been repaid. When you own an asset on which there's a lien, you risk having it repossessed if you default and don't make the required payments in full and on time.

lien

A legally enforceable claim on the property of another as a result of a debt or obligation. It may be voluntary,such as a mortgage,or involuntary,such as a tax lien.It may be general,such as a judgment lien on all property within a county,or specific,such as a mortgage lien on the described property. One of the most important concepts in lien law is the priority among competing liens if property is insufficient to pay all claims or if the owner files for bankruptcy.The general rules are as follows (however,there may be local variations among the various states):

1. The first lien to be recorded is paid first, and so on in the order of recordation.

2. A statutory lien, such as a mechanics' and materialmen's lien, may be given artificial priority even though recorded after another lien.

3. Lien priority may be reshuffled if a debtor files for bankruptcy. The rules are too complex to examine here.

4. Lien-stripping takes place in bankruptcy when an asset is not worth as much as the accu- mulated liens placed upon it. Junior lienholders are stripped out and turned into unse- cured creditors. Even mortgage liens may be reduced in amount, if the real estate is not worth as much as the loan balance.

5. A landlord's statutory lien for unpaid rent can be avoided, or set aside, by a bankruptcy trustee, but a landlord's contractual lien cannot be avoided unless lien-stripping comes into play.

References in periodicals archive ?
A $3,150,000 first lien mortgage for the refinance of a 6-unit multifamily on Cypress Ave in Ridgewood, NY.
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A $5,200,000 first lien mortgage for the refinance of an 84-unit multifamily on Sullivan Ave in Westminster, MD.
A $2,550,000 first lien mortgage for the refinance of a 6-unit multifamily on Himrod St in Brooklyn, NY.
The company intends to use the remaining net proceeds from the offering and the borrowings available under the first lien term loan and the revolving credit facility to fund the company's development drilling program and construction of additional pipeline infrastructure to serve the new wells.
A $5,225,000 first lien mortgage for the refinance of a 35-unit mixed-use on Brown St in Philadelphia, PA.
A $3,800,000 first lien mortgage for the refinance of a 31-unit multifamily on 171st St in Jamaica, NY.
A $5,500,000 first lien mortgage for the refinance of a 60-unit multifamily on S Marshall Blvd in Chicago, IL.
A $3,750,000 first lien mortgage for the refinance of a 2-unit multifamily on Clendenny Ave in Jersey City, NJ.
A $3,710,000 first lien mortgage for the refinance of a 12-unit flex space on Airport Rd in Lakewood, NJ.
Holders whose first lien notes are purchased in part shall be issued new first lien notes equal in principal amount to the un-purchased portion of the first lien notes surrendered representing the same indebtedness to the extent not repurchased.
From the first lien lender's perspective, permitting a second lien loan allows the first lien lender to meet its customer's borrowing needs without extending its own credit beyond limits it considers prudent.

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