Senior Lien
A legal claim against property that has priority over other liens when it comes to payment during foreclosure or property sale. Senior liens must be satisfied first before any junior (subordinate) liens receive payment from the proceeds. The priority is typically determined by the order in which liens were recorded, though some liens (like tax liens) may have automatic priority regardless of recording date.
Example
“The bank's mortgage was a senior lien, meaning it would be paid first before any other debts if the property went into foreclosure.”
Memory Tip
Think of 'senior citizens get priority' - senior liens get paid first, just like seniors often get priority seating.
Why It Matters
Understanding lien priority is crucial for lenders, buyers, and investors because it determines who gets paid first if the property is foreclosed or sold. Senior lien holders have better security and lower risk of loss.
Common Misconception
The largest lien amount doesn't automatically make it senior—priority is typically based on recording date and lien type, not dollar amount.
In Practice
A first mortgage recorded in 2020 maintains senior position over a home equity line of credit recorded in 2022, meaning the original mortgage gets paid in full before the HELOC receives any foreclosure proceeds.
Etymology
From French 'lien' meaning 'bond' or 'tie,' with 'senior' indicating age-based priority, as senior liens are typically older and thus have first claim on the property.
Common Misspellings
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