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What is a Mortgage Note’s Lien Position?

Sell your mortgage

More than two-thirds of all Americans manage a mortgage note of some kind, which is a whopping 2,200,000 people nationwide. Each of these people has a lien clause that returns their property's value to lenders in the event of default.

But what exactly is a mortgage lien, and who is in a position to receive sold assets first?

We're exploring all of this and more, including definitions, examples, and information about how to reduce your risks in the event of a lien.

What is a Mortgage Lien?

A mortgage lien is a legal claim that a lender has on a borrower's property. This is usually placed on residential real estate, although it may also be present in commercial sales and buildings. 

Liens give lenders the right to take back their property if borrowers fail to uphold their end of the bargain — that is if they fail to make payments on time or to the right amount. The outstanding payment could be just about anything, including principal payments, contracted work, or even taxes.

A mortgage lien protects the lender's money and ensures your transaction goes off without a hitch. However, it can also spell disaster for homeowners and their families, leading to a loss of property or even homelessness.

What is a Mortgage Note’s Lien Position?

A mortgage note's lien position, sometimes called promissory note lien priority, refers to how debts are repaid in the event of a foreclosure. If a borrower defaults on their loan and fails to render payments, they will need to repay lenders in the order in which debts were incurred.

There are several different lien positions that mortgages can take, although the priorities are almost always listed as numbers. Each is calculated according to the 'first-in-time, first-in-right' rule, which says that the first person to lend money will be owed payments first.

The first lien position is almost always given to the mortgage lender. This means that funds from the sale of a home are sent to the lender first to cover damages and expenses. Excess money trickles down to the person or entity in the second lien position (depending on who gave money first). The funds continue in this trickle-down fashion until there is nothing left.

The hierarchy of a mortgage loan is similar to a totem pole. The person at the top is first in line to be paid, while the people lower down will receive their money last (if there is any left to return).

How to Check Your Mortgage Loan Positions

According to US law, priority for mortgage loans is set according to whoever filed first in your county records' office. This means you could check with your county for additional information about where, when, and to who the money is owed in the event of a lien.

Here's what you'll do:

  • Look up your county's website and navigate to the recorder or assessor's office page.
  • Search for the name and address of your borrower in the office's database. This will bring up a list of all documents that have been filed under the particular person. If you do not have access to a county assessor's page, you'll need to call or visit your local tax assessor’s office or county courthouse in person.
  • Find the mortgage loan you're looking for and check the date of filing. If there are multiple lenders listed, the one with the earliest filing date will have the first-in-time, first-in-right status. 

Checking your county records is a great way to get an idea of where you stand in terms of lien priority. However, it does not ensure that lenders will get their money back in the case of foreclosure or provide compensation for any damages or expenses.

How to Get Rid of a Mortgage Note's Lien

If you are a mortgage lender that is not in first priority, you may not be in a position to receive funds in the event of foreclosure. To avoid this, you can try to negotiate with your borrower, encourage them to refinance, or even pursue legal action. However, the best and most efficient way to avoid these headaches is to simply sell your mortgage note to another capable lender.

Just follow these three easy steps:

  1. Contact We Buy Loans Fast to connect with a buyer.
  2. Sell your mortgage to our team and get cash fast.
  3. Use the cash to pay down any resulting liabilities.

At We Buy Loans Fast, we work with a number of private investors who may be interested in buying your mortgage note. We can help you sell your mortgage within just a few weeks or less, giving you cash to pay off debts and restoring your peace of mind.

You can get in touch with We Buy Loans Fast for a free and no-obligation consultation today.


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