Which lien results from property financing?

• A. Mortgage Lien
• B. Mechanic's Lien
• C. Municipality Property Tax Liens
• D. Federal (IRS) Tax Liens

Answer: (A)

When you finance a property, the lender typically places a mortgage lien on the real estate. This lien is a security interest created by the mortgage (or deed of trust) that the borrower signs, and it’s recorded in public records to show the lender’s claim on the property until the loan is repaid. If you default, the lender can enforce the lien through foreclosure to recover the owed funds.

Mechanic’s liens arise from unpaid labor or materials provided for the property, not from financing. Property tax liens come from unpaid local taxes, and federal tax liens come from unpaid IRS taxes. These can attach to the property independently of any financing. Therefore, the lien that results from financing is the mortgage lien.