lien theory

Lien theory is a legal concept related to real estate loans. When you borrow money to buy a property, the lender may hold a lien, or legal claim, on that property as security for the loan. This means that if you fail to pay, the lender has the right to start a foreclosure process to sell the property and recover the owed money. Under lien theory states, the borrower retains legal title to the property while the loan is active, and the lender's claim is simply a lien until the debt is paid.