Definition:

A lien (often a deed of trust or a mortgage) that has priority over all other liens. In the event of foreclosure, the first lien will be satisfied before other liens.

definition of first lien

Example:

A property costing $200,000 is financed with a first mortgage of $155,000, a second mortgage of $25,000, and $20,000 in cash. If the borrower defaults and the property is sold upon foreclosure for $160,000, the holder of the first mortgage (first lien) will receive the full amount of the unpaid principal plus legal expenses. The second mortgage will only receive any amounts remaining after the first mortgage has been satisfied, and in this example would not be paid back all of its principal.

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