Preliminary Notice

• The first lien notice that lenders and contractors (any organization that wants to collect debt based on property value) provide is the preliminary notice of lien. This is not the lien itself; it is only an official letter that shows the intent to file a lien, giving the homeowner the chance to resolve the issue before a lien is permanently attached to the property file. Many states require this preliminary notice before creating the lien.
  
  

Lien Notice

• The lien notice itself is sent after the lien is filed. This notice specifies the claim made by the lender, how much the debt is and what the debt is secured by. Again, state laws vary. Some states do not require a lender to actually send a notice of lien. This means that the homeowner may not know about the lien until the foreclosure proceedings begin. In the case of contractor-based liens, the homeowner may not know at all until the contractor takes legal action to begin a foreclosure.
  
  

Notice of Lien Effects

• In states that do require a notice of lien, the notice is one of the beginning steps in the foreclosure process for the lender. This notice is preceded by a notice of default and is followed by several other notices informing the homeowner of the foreclosure, foreclosure sale, and the imminent eviction. The notice of lien functions as a part of this process leading to foreclosure, but it also means the lender is willing to consider alternatives like short sales or loan modifications, providing an opening for borrowers.
  
  

Notice of Completion

• After the lien has ended, many lenders will send a notice of completion that shows the process is finished. This typically occurs when the lender has been fully paid off or has collected the collateral and decided to close the account. The notice of completion will show that the borrower is released from any claim associated with that debt, but it will not remove the lien entirely. The lien will still remain on the historic record of the property.