It’s a Bird. It’s a Plane. It’s a Super Lien!

Some states give certain liens a special status: super liens! Whoever records a super lien gets their money back first — they jump in front of the prior recorded liens on the property. Sometimes, homeowners’ associations have this super power. If so, they can override the famous “first in time, first in right” rule for liens.

Homeowners usually don’t think too much about lien priority. But mortgage companies do. And people who invest in mortgage notes, considering them first-priority liens, absolutely do. Lien priority is a factor they check before investing in debt in a given state.

Let’s take a look at liens, super liens, and how mortgage companies and mortgage investors react to them.  

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Know the Facts About Liens

Person at a desk working on lien paperwork

Good Debt, Bad Debt…

Nowadays, people can be divided into three classes: the haves, the have-nots, and the have-not-paid-for-what-they-haves.

– Earl Wilson

If you own a home, there’s probably a lien (or a few) on its title. A lien represents a debt that the homeowner has yet to pay. A mortgage creates a lien. There can be other ways, too, that “lienable” debt finds its way to a house title.

Here, we review the facts: what a lien is, the common types of liens, and the effects liens can have on your property.

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When You Least Expect It… What You Need Know About Unrecorded Real Estate Liens

Image of a child holding a book with a very surprised like on their face.  Captioned: When you least expect it... What You Need To Know About Unrecorded Real Estate Liens

For many buyers, the home shopping experience involves gazing wistfully at hardwood floors, kitchen countertops, new appliances, and the sunny views from the windows over the garden. As the purchase decision gets closer, the focus turns to the AC efficiency and the state of the roofing, electric outlets, vents, and ducts. Even then, an unknown lien on the title might be the furthest thing from a buyer’s mind.

Liens represent debts that must be resolved before the home can be sold. A mortgage lien, for example, represents a buyer’s obligation to repay the lender.

Before the title can be conveyed to a new owner, a title search will look back over the chain of title to find easements, covenants and restrictions in the records. If a preliminary title report comes back clean, it means nothing substantial was unearthed in the records. Typically, then, the buyer can then access financing, and the parties may proceed with the deal.

But what about unrecorded liens? No one likes surprises that could delay closing. Potentially even more problematic are liens that escape the title company’s attention entirely, only to be discovered after the new owner has lived in the home for some time.

To avert these problems, it helps to know the basics of unrecorded liens.

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How Does a Judgment Lien Work? Our Succinct Guide to Judicial Liens on Real Estate

Image of a judge gavel discussing how judgement liens work.

Many people have liens on their home properties, connected to some debt waiting to be paid. Consider your mortgage — a voluntary, recorded lien you agreed to have placed on the home as collateral for the loan. There are also involuntary liens, such as those imposed on your property after a court action. These judicial liens, or judgment liens, can attach to real estate. Individual states regulate both voluntary and involuntary liens.

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How a Lien Affects the Real Estate Title

Image of a house in the background with a construction worker in a hardhat holing building plans. Captioned: How a Lien Affects the Real Estate Title.

Many people have liens on their real estate. Consider your mortgage—a lien that leverages the home as collateral for your mortgage loan. Other liens, too, can show up in a title search. Homeowners should know what kind of liens might attach to a home they already own, or a home they’d like to buy. Here, we review the basics of home liens: types of liens, how they impact the home’s title, how they can lead to foreclosure, and how to remove them.

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