What is an example of a voluntary lien in title insurance?

A mortgage serves as an excellent example of a voluntary lien in the context of title insurance. A voluntary lien is one that a property owner agrees to against their property typically in exchange for a loan or financing. When a homeowner takes out a mortgage, they are willingly entering into an agreement that allows the lender to place a lien on their property. This lien serves as security for the lender, giving them the right to take possession of the property if the homeowner fails to fulfill their repayment obligations.

In contrast, other types of liens like IRS liens, judgment liens, and seizure liens are generally involuntary. They do not arise from the owner's consent but rather through legal processes or obligations that compel a lien to be placed on the property, often due to unpaid debts or legal judgments. Understanding this distinction is crucial in the realm of title insurance, as it affects the priority of claims and the overall title status when that property is being sold or refinanced.