Perfected Lien

A legal filing process wherein a Lender’s (Investor’s) claim on specific loan Collateral is officially filed and publicly recognized within a given state under the Uniform Commercial Code. Perfected Liens are used to support the return of principal and any interest due to a Lender. Perfected Liens are critical if the Lender’s recovery process must be upheld through a legal process, such as bankruptcy court. Also, a security interest in the collateral that is used to secure the performance of a debt that is protected from third-party claims. A perfected lien for real property must be filed with the correct legal authority, such as the state, in which the Issuer or Property is located. Perfected liens for real estate are achieved when the mortgage deed of trust is recorded in the land records of the appropriate municipality. Pertains to debt.

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