What Are Property Liens?

Real estate laws vary from State to State.  Put simply, a property lien is evidence of a debt, secured by the property.  There are voluntary and involuntary liens, but for today’s discussion, we will only be discussing voluntary liens created for the purpose of purchasing property.  

Texas is a Lien Theory state meaning title goes into buyer’s name, but owner grants a voluntary lien against the property to the Lender.  The voluntary lien is in the form of a Deed of Trust.  The Deed of Trust identifies the borrower, the lender and the Trustee and provides details about the debt that the borrower owes to the lender.  The Trustee is a 3rd party, named by the lender, to act for them if the borrower fails to repay the loan. 

The Deed of Trust is essentially the evidence of a financial obligation on the part of a home or landowner.  When the borrower repays the loan amount, pursuant to terms of the deed of trust and note, the lender will execute a Release of Lien.  The Release of Lien must be filed in the county property records, and at the time of such recording, the property is vested in the owner, free and clear of the original purchase money lien.