What is a Lien?

What is a lien?

A lien on your home’s title represents the legal claim that a lender or creditor places on your property when you use that property as collateral for a debt or financial obligation. It signifies that you have borrowed money or entered into an agreement that is secured by your home.

What is a lien release? And why does Point need it?

A lien release, also known as a lien satisfaction or a release of lien, is a legal document that proves that a lien on your property has been removed.
When a debt has been paid in full, your lender needs to file a lien release to formally show that they have no claim to your property.
A lien release is important because it formally acknowledges that the debt or obligation secured by the lien has been paid off or otherwise fulfilled.
Point needs a lien release to make sure we are aware of any creditors that may have claims to any part of your home equity.

Why is there a lien on my property?

Liens can be placed on your property for different kinds of debts and unpaid obligations. Some common lien types we see on the titles of homeowners are: mortgages, HELOCs, tax liens, contractor or mechanic liens, child support, and HOA liens.

What are liens that may be on my property?

These are some of the most common liens:

Mortgage liens: When you buy a home with a mortgage, the lender places a lien on the home until the mortgage is paid off.
Mechanic's liens: Contractors or suppliers can place liens on a property if they haven't been paid for services or materials used in construction or repairs.
Tax liens: Your local, state, or federal government can place liens on properties for unpaid property taxes or other tax debts.
Judgment liens: If a court awards a monetary judgment against a property owner, a lien can be placed on their property to ensure payment.
Homeowner association (HOA) Liens: HOAs can place liens on properties for unpaid dues or violation fines.
Medical liens: These can occur if a property owner has unpaid medical bills or expenses related to medical treatment. Hospitals or medical providers may place liens on the property to secure payment.
Creditor liens: Other types of creditors, such as credit card companies or personal loan providers, can place liens on a property if the property owner owes them money.

How does Point know about the liens on my property?

Point may have discovered liens on your property through a public record search, title search, or information from your Point application.
Point also orders a preliminary title report during our underwriting process. The title report will reflect any liens or judgments attached to the property and/or property owners. We need a clean title report for the closing of your Point Home Equity Investment.

Are there any liens that Point will not approve?

Point cannot proceed with any Home Equity Investment applications with a child support lien or dissolution of marriage lien.

What happens if I cannot provide this document to Point?

Point cannot move forward with your Home Equity Investment application without the requested lien release.

How can you obtain this lien release?

Contact your lender/creditor
Contact the contractor / construction company that completed the work on your property
Contact the judgment attorney who owns the judgment

What information does Point need to see on your lien release?

A lien release should include details such as:

Names of the parties involved (lienholder or title company, and property owner)
Description of the property
Original amount of the debt or obligation
Date of the lien's creation
This MUST match the date of the judgment or lien on title
Date of its release
This MUST match the date of the judgment or lien on title
Instrument number for judgment
Notarization or official seal of the releasing party
Confirmation that the lien has been paid in full and released

Example of a lien statement

Note: Your lien statement will vary. Hopefully this example can add helpful context.