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Definition of Lien

A lien is a legal claim on property. Liens can include second mortgages or vehicle loans where the object or possession is collateral against the loan amount. Property which has a lien against it cannot be sold or transferred without first clearing the lien. If the owner of the property defaults on loan payments, the lender has the legal authority to repossess and sell the property to repay what is owed on the loan. Failure to make payments on a loan is termed default.

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