What does a mortgage lien represent in a mortgage loan transaction?

A mortgage lien represents a legal claim against a property that serves as collateral for a loan. When a borrower takes out a mortgage, the lender places a lien on the property they are financing, which secures the lender's interest in the event that the borrower fails to repay the loan. This means that if the borrower defaults on the mortgage, the lender has the right to foreclose on the property and recover the owed amount through the sale of the property. This legal claim ensures that the lender can recoup their investment, demonstrating the significance of the mortgage lien in securing debt obligations associated with the loan.

In contrast, other options pertain to different aspects of the mortgage process. The calculation of interest refers to how lenders determine the cost of borrowing, while the total amount of the loan indicates how much the borrower is obligated to repay, and the processing fee is related to the costs incurred by lenders when originating the loan. These elements are essential to understanding the overall process, but they do not define the role of a mortgage lien in a transaction.