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How can I secure the first position on a property lien for a loan?

How can I secure the first position on a property lien for a loan?

Q: What document creates a lien?

A lien is typically created by a legal document known as a mortgage or a deed of trust. These documents outline the terms of the loan and grant the lender a security interest in the property. Additionally, other documents, like judgment liens, can be filed to establish a lien based on court decisions.

Q: What is a first priority lien?

A first priority lien is the highest-ranking lien on a property, meaning it must be paid off first in the event of a sale or foreclosure. This priority is usually determined by the order in which liens are recorded. The holder of a first priority lien has the right to collect from the property's value before any junior liens.

Q: What is the first lien priority?

First lien priority refers to the order of claims against a property. The first lien recorded generally has priority over subsequent liens. This means that in a foreclosure or sale, the first lienholder is paid first from the proceeds, ensuring they recover their investment before any other creditors.

Full question:

I need the correct form or document in order to have the first position on a property lien from a loan to purchase the property.

Category: Real Property
Subcategory: Liens
Date: 04/07/2025
State: California

Answer:

Priority of liens is usually determined by the date they are recorded. Generally, the mortgage holder has priority over later filed liens, known as junior creditors. This means junior creditors can only collect from any remaining proceeds after the mortgage holder is paid. If the property is sold in foreclosure and there are no proceeds left, junior creditors may seek payment from other assets of the borrower.

A subordination agreement is a legal document that allows a person with a senior interest to agree to subordinate that interest to a lesser interest. This often occurs when a seller agrees to subordinate a purchase-money mortgage, enabling the buyer to obtain a first-mortgage loan for property improvements.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What is the first lien on a property?

The first lien on a property is the primary claim against the property that has the highest priority for repayment in the event of a sale or foreclosure. This lien is typically established by the first mortgage recorded on the property. It ensures that the lender is paid first before any other creditors or lienholders can collect from the proceeds of the sale.

What document creates a lien?

What is a first priority lien?

What is the first lien priority?

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