What distinguishes a mortgage lien from a tax lien?

A mortgage lien is specifically created when an individual borrows funds to purchase real estate, using the property as collateral for the loan. This type of lien serves to secure the lender's interest in the property, ensuring that if the borrower fails to repay the loan, the lender has the right to foreclose on the property to recover the owed amount.

On the other hand, a tax lien arises from unpaid taxes. When an individual or entity does not pay their taxes, the government can place a lien against their property as a way to secure the debt owed. This lien is a legal claim against the property that must typically be satisfied before the property can be sold or refinanced.

The distinction between a mortgage lien and a tax lien fundamentally lies in the purpose of the lien—one is about securing borrowed funds for purchasing real estate, while the other pertains to unpaid taxes, establishing the basis for the correct answer.