First Lien Position

When a lender is in a first lien position, it means that they are in the highest priority position to benefit from any liquidation of the property serving as collateral for the loan (in the event that the loan is in default and the property is to be sold).

An example of a first lien position would be the bank which holds the original mortgage on your property. The term primary lien holder refers to the lender who retains the first lien position; in the event another lender “subordinates” their position, that lender becomes a secondary lien holder.