Using mortgages to invest in tax lien certificates
The property you are buying does in fact become collateral for the finance that has been sought to pay for it and is the protection a mortgagee needs if he is going to continue financing house purchases or investing in tax lien certificates. Information about the lien is registered at a county courthouse, or similar, to ensure the contract is official and binding.
Ownership of the property is then yours and cannot be transferred to anyone else until you have paid off the amount required to reverse the lien. This is a strange situation where the mortgagor still owns the property even though the debt still remains to be paid.
The only right that your mortgage gives to the mortgagee over your property is to sell it to recover funds in the case that you do not pay off your debt. Should they need to reclaim these costs then the case will be held in court and the procedure called foreclosure will be started. To ensure that everything is legal and above board, the court will place a ruling on the disposal in a process called judicial foreclosure. For the sake of clarity this is only a brief description of a much more complex subject but it should have helped explain the basic subject.