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Related to Lien: line, Construction lien


A security interest in one or more assets that lenders hold in exchange for secured debt financing.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.


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.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
"In an action to enforce a target lien bond, however, the underlying lien already has been dissolved," he wrote.
First Sentinel did not learn that the IRS liens had not been discharged until after it entered into a contract to sell the property in December 2015.
A $3,440,000 first lien mortgage for the refinance of a 41-unit multifamily on Cleveland St in Orange, NJ.
If the lien is not released, then what is the remedy for a homestead property owner who has a code enforcement lien recorded against the property?
In general, they find that default rates on second liens are similar to those on first liens on the same home, although HELOCs perform better than CESs because of the timing of their origination and the quality of borrowers.
The IRS will withdraw a lien only if the taxpayer requests a withdrawal letter in advance after the taxpayer has fully paid the taxes due or enters into a direct debit installment agreement (DDIA) in which monthly payments to the IRS are automatically withdrawn from the taxpayer's bank account.
The new second lien term loan has a final maturity of 27 December 2015 and may be prepaid subject to certain premiums after one year.
The second lien notes will be senior secured junior lien obligations of United and the company's obligations under these notes will also be guaranteed on a senior unsecured basis by UAL and certain of its subsidiaries.
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.
Taxpayers were given significant new appeal processes, known as "collection due process" (CDP).These rights stopped the IRS from enforcing liens and levies while the taxpayer appealed the action.
That's particularly true in that hedge funds and distressed-asset lenders are prime forces in this type of lending, and may not have the stomach or the expertise to stay the course if things go south (see sidebar, "How Second Liens Complicate a Workout," on page 43).
Lien Chan, leader of Taiwan's opposition Nationalist Party (KMT), expressed his intention Friday to visit China.