Under Rhode Island property law, which entity holds the lien in a mortgage transaction?

In a mortgage transaction under Rhode Island property law, the lender or bank holds the lien. When a borrower takes out a mortgage, they are securing a loan with the property itself. The lender provides the funds needed for the property purchase, while the property serves as collateral for that loan. This arrangement gives the lender a legal claim, or lien, against the property until the borrower repays the loan in full.

This lien ensures that if the borrower defaults on the loan, the lender has the right to initiate foreclosure proceedings to recover the amount owed by selling the property. This mechanism protects the lender’s financial interest and establishes a clear path for recourse should the borrower fail to meet their repayment obligations.

In contrast, the property owner does not hold a lien; they are the one providing the security for the lender’s loan. The state government typically does not hold a lien in a private mortgage transaction unless it involves tax liens or specific governmental claims. Title companies mainly facilitate the closing of transactions and ensure that the title is clear but do not hold liens themselves. Thus, the correct entity that holds the lien in a mortgage transaction in Rhode Island is indeed the lender or bank.