Affiliate Broker Tennessee (TN PSI) National Practice Exam `

What type of lien is created by a mortgage against a property?

1. Involuntary lien

2. Secondary lien

3. Voluntary lien

4. Judgment lien

The correct answer is: Voluntary lien

A mortgage creates a voluntary lien against a property because it is a legal obligation that the borrower willingly agrees to when they take out a loan to purchase real estate. This type of lien is established when the property owner signs the mortgage documents, thereby granting the lender a security interest in the property. The lien ensures that if the borrower defaults on the loan, the lender has the right to foreclose on the property and recover the owed amount. In contrast, involuntary liens, such as tax liens or mechanic's liens, are imposed by law without the property owner's consent. These liens typically arise from unpaid debts or obligations. A secondary lien refers to a lien that is subordinate to another lien, while a judgment lien occurs as a result of a court ruling. These distinctions highlight why a mortgage specifically results in a voluntary lien as it is predicated on the mutual agreement between the borrower and lender.