What is the Process for Filing Liens on Real Estate?

Property liens are filed against homes for many reasons. If you own your home free and clear and you decide to take out a mortgage loan it's considered to be a lien against the property. Creditors can sometimes file liens against property to collect on a past due debt after they receive a judgment against you. Liens are attached to homes in accordance with the rules, regulations and laws of each particular state that someone resides within. If you have home improvements done to your home the contractor can file a lien against your property until the debt is paid. A lien establishes a security interest in the property by the individual filing the lien.

Prepare the lien document. Depending on the type of document you may need signatures and a notary stamp before the lien can be filed. There could be a place for the lender or creditor to sign as well. This can vary and will depend on the type of lien being filed. Every item on the lien document should be filled out according to the instructions provided. All liens do not need to have the borrower sign. It all depends on the type of lien.

Go to the court house. Once the lien document is prepared take it to the courthouse residing in the county where the property is located. A representative will direct you to the correct department. Typically you would visit the county recorders office or the clerk of courts to have the lien filed. They will make sure it is indexed and documented correctly. Once the lien is filed anyone can look up the information either online or by visiting the courthouse. You will need the address of the property or the parcel number. This information becomes readily available because it is now public record.

Have the lien released. When the debt has been paid the lien should be released. A creditor will send a lien release document to the courthouse to have the lien released. This means the creditor no longer has a security interest in your property. If the creditor forgets to release the lien it can affect the homeowner's ability to get a loan in the future. If you apply for another loan and the lien is not released it will appear that you still have the debt outstanding. The lender will need proof that the debt has been paid. If the lender merged or consolidated with another creditor it could be difficult to track them down years after the debt has been paid.

Source:

http://www.realestatelawyers.com/Liens.cfm