A lien is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the lienee and the person who has the benefit of the lien is referred to as the lienor or lien holder.
A mortgage is a legal instrument of the common law which is used to create a security interest in real property held by a lender as a security for a debt, usually a mortgage loan. Hypothec is the corresponding term in civil law jurisdictions, albeit with a wider sense, as it also covers non-possessory lien.
In finance, a swap is an agreement between two counterparties to exchange financial instruments, cashflows, or payments for a certain time. The instruments can be almost anything but most swaps involve cash based on a notional principal amount.
Title insurance is a form of indemnity insurance predominantly found in the United States and Canada which insures against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage loans. Unlike some land registration systems in countries outside the United States, US states' recorders of deeds generally do not guarantee indefeasible title to those recorded titles. Title insurance will defend against a lawsuit attacking the title or reimburse the insured for the actual monetary loss incurred up to the dollar amount of insurance provided by the policy.
Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.
Gap Financing is a term mostly associated with mortgage loans or property loans such as a bridge loan. It is an interim loan given to finance the difference between the floor loan and the maximum permanent loan as committed.
A mechanic's lien is a security interest in the title to property for the benefit of those who have supplied labor or materials that improve the property. The lien exists for both real property and personal property. In the realm of real property, it is called by various names, including, generically, construction lien. The term "lien" comes from a French root, with a meaning similar to link, which is itself ultimately descended from the Latin ligamen, meaning "bond" and ligare, meaning "to bind". Mechanic's liens on property in the United States date from the 18th century.
Hypothec, sometimes tacit hypothec, is a term used in civil law systems or mixed legal systems to refer to a registered non-possessory real security over real estate, but under some jurisdictions it may sometimes also denote security on other collaterals such as securities, intellectual property rights or corporeal movable property, either ships only as opposed to other movables covered by a different type of right (pledge) in the legal systems of some countries, or any movables in legal systems of other countries. Common law has two main equivalents to the term: mortgages and non-possessory liens.
Second mortgages, commonly referred to as junior liens, are loans secured by a property in addition to the primary mortgage. Depending on the time at which the second mortgage is originated, the loan can be structured as either a standalone second mortgage or piggyback second mortgage. Whilst a standalone second mortgage is opened subsequent to the primary loan, those with a piggyback loan structure are originated simultaneously with the primary mortgage. With regard to the method in which funds are withdrawn, second mortgages can be arranged as home equity loans or home equity lines of credit. Home equity loans are granted for the full amount at the time of loan origination in contrast to home equity lines of credit which permit the homeowner access to a predetermined amount which is repaid during the repayment period.
A floating charge is a security interest over a fund of changing assets of a company or other legal person. Unlike a fixed charge, which is created over ascertained and definite property, a floating charge is created over property of an ambulatory and shifting nature, such as receivables and stock.
In finance, a security interest is a legal right granted by a debtor to a creditor over the debtor's property which enables the creditor to have recourse to the property if the debtor defaults in making payment or otherwise performing the secured obligations. One of the most common examples of a security interest is a mortgage: a person borrows money from the bank to buy a house, and they grant a mortgage over the house so that if they default in repaying the loan, the bank can sell the house and apply the proceeds to the outstanding loan.
In real estate business and law, a title search or property title search is the process of examining public records and retrieving documents on the history of a piece of real property to determine and confirm property's legal ownership, and find out what claims or liens are on the property. A title search is also performed when an owner wishes to sell mortgage property and the bank requires the owner to insure this transaction.
A secured loan is a loan in which the borrower pledges some asset as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The debt is thus secured against the collateral, and if the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to regain some or all of the amount originally loaned to the borrower. An example is the foreclosure of a home. From the creditor's perspective, that is a category of debt in which a lender has been granted a portion of the bundle of rights to specified property. If the sale of the collateral does not raise enough money to pay off the debt, the creditor can often obtain a deficiency judgment against the borrower for the remaining amount.
The maritime lien is one of three in rem claims capable of being brought under UK Admiralty Law. Whilst being a common law instrument, it has been codified under s.21(3) of the Senior Courts Act 1981 along with s.21(2) and s.21(4), its statutory counterparts. Maritime lien and ship mortgage have a single corresponding term in the civil law, namely the ship hypothec.
Tacking is a legal concept arising under the common law relating to competing priorities between two or more security interests arising over the same asset. The concept is best illustrated by way of example.
- Bank A lends a first advance to the borrower, which is secured by a mortgage over the borrower's property. The mortgage is expressed to secure this advance and any future advances.
- Bank B subsequently lends more money to the borrower and takes a second ranking mortgage over the same property.
- Bank A then subsequently lends a second advance to the borrower, relying on its original mortgage.
Subordination in banking and finance refers to the order of priorities in claims for ownership or interest in various assets.
Central Railroad & Banking Co. of Ga. v. Pettus, 113 U.S. 116 (1885), was an appeal from a decree of the Circuit Court of the United States for the Middle district of Alabama in favor of the appellees, Pettus & Dawson and Watts & Sons, adjudging them entitled to the sum of, 161.21, and interest thereon at eight percent per annum from March 7, 1881, with lien, to secure its payment, upon the roadbed, depots, side tracks, turnouts, trestles, and bridges owned and used by the appellants, corporations of the State of Georgia, in operating the railroad formerly belonging to the Montgomery and West Point Railroad Company, an Alabama corporation, and which extends from Montgomery to West Point with a branch from Opelika to Columbus. This property was directed to be exposed to sale unless within a given time the said amount was paid. This suit is the outgrowth of certain litigation in the courts of Alabama relating to the before-mentioned and other railroad property in which the appellants are interested.
Provident Institution for Savings v. Mayor of Jersey City, 113 U.S. 506 (1885), was a bill in equity filed in the Court of Chancery of New Jersey by the appellant, to foreclose two mortgages given to it on a certain lot in Jersey City, New Jersey by Michael Nugent and wife, and another person.
The vast majority of states in the United States employ a system of recording legal instruments that affect the title of real estate as the exclusive means for publicly documenting land titles and interests. This system differs significantly from land registration systems, such as the Torrens system that have been adopted in a few states. The principal difference is that the recording system does not determine who owns the title or interest involved, which is ultimately determined through litigation in the courts. The system provides a framework for determining who the law will protect in relation to those titles and interests when a dispute arises.
South African property law regulates the "rights of people in or over certain objects or things." It is concerned, in other words, with a person's ability to undertake certain actions with certain kinds of objects in accordance with South African law. Among the formal functions of South African property law is the harmonisation of individual interests in property, the guarantee and protection of individual rights with respect to property, and the control of proprietary management relationships between persons, as well as their rights and obligations. The protective clause for property rights in the Constitution of South Africa stipulates those proprietary relationships which qualify for constitutional protection. The most important social function of property law in South Africa is to manage the competing interests of those who acquire property rights and interests. In recent times, restrictions on the use of and trade in private property have been on the rise.
