What is a lien called that is placed against a property when the owner borrows money?

• A. Mortgage Lien
• B. Voluntary Lien
• C. Encroachment Lien
• D. Involuntary Lien

Answer: (A)

A lien that is placed against a property when the owner borrows money is known as a mortgage lien. This type of lien is created when a borrower uses real estate as collateral for a loan. The mortgage lender holds this lien until the borrowed amount is repaid. Mortgage liens are essential in real estate transactions, as they secure the lender’s interest in the property and provide a legal claim against it in the event of default by the borrower.

While voluntary liens, like mortgage liens, are placed with the owner’s consent, they specifically pertain to borrowing against real estate. Encroachment liens are not commonly recognized in the context of mortgages and refer more to property disputes. Involuntary liens arise without the owner's consent, often due to legal judgments or tax obligations, which is distinctly different from a mortgage lien established with approval.