What typically happens when a mortgage is recorded?

When a mortgage is recorded, a lien position on the property is established. This means that the lender has a legal claim to the property as security for the loan given to the borrower. Recording the mortgage in the public records provides notice to all parties that the lender has a financial interest in the property and establishes the lender's priority over other potential claims or liens that may come later. This process is crucial for ensuring the lender's rights are protected in the event that the borrower defaults on the loan.

The other options do not accurately describe what happens during the recording of a mortgage. Ownership does not transfer to the lender; instead, the borrower retains ownership while granting the lender a lien. Recording a mortgage does not cancel it, and significant action does occur during the recording process, contrary to the option suggesting no action occurs. Therefore, establishing a lien position through recording is the fundamental result of this important legal step.