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Define Senior Lien in Real Estate
Senior Lien:
In real estate, a "senior lien" is a type of lien that has priority over other liens on a property. This means that if the property is sold or foreclosed on, the holder of the senior lien has the first claim on any proceeds from the sale or foreclosure.
Example:
A working example of a senior lien would be a first mortgage on a property. If the owner of the property has a first mortgage, that mortgage holder would have a senior lien on the property. This means that if the property is sold or foreclosed on, the first mortgage holder would be paid first from the proceeds, before any other lien holders.
"A Deep Dive for Real Estate Agents"
In a foreclosure or sale of a property, the senior lien holder would typically be paid first, but this would depend on the specific circumstances of the case.
For example, in the case of a first mortgage, the first mortgage holder would have priority over other lien holders, but there may be other liens that also have priority, such as property taxes or other government liens.
In some cases, a foreclosure sale may not generate enough funds to pay off all of the liens on the property, in which case the lien holders may have to negotiate a settlement or agree to a partial payment.
So, while the senior lien holder would typically be paid first in a foreclosure or sale, there may be other factors that could affect the order of payment.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
A senior lien, what could it be?
It's priority in the first degree.
The first to be paid, if property is sold,
Before other liens, it takes hold.