The Difference

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A note is a mortgage lien.  An agreement between two parties to pay it back.  How people trade those I don't really know.  A tax lien is when the government puts a lien on the property for non payment of property taxes.  These are sold by the county for payment of property taxes owed.  Every state has different bidding procedures and redemption period.  That is, if it's a lien state.  Some states are deed states which more or less sells the property.  Procedures and bidding are also different in states.  Some states are lien/ deed.  Some states are deed with redemption periods.

Two good books, "Profit by Investing in Real Estate Liens", by Larry Loftis and "Zero Risk Real Estate", by Chip Cummings

A "Note" is simply slang term when used in REI discussions which includes the entire whole loan. That means the security instrument (Mortgage or Deed of Trust) plus the Promissory Note is included along with all rights and interests. In it's simplest form a note is just a promise to pay. In real estate those notes are secured by the instruments above. That is, the property is given as collateral and memorialized in those documents. A note can be "unsecured" which means there is no collateral. Further a note can be secured by alternative forms of collateral like in an auto loan where title to the automobile secures the lien.

A borrower gives a mortgage to a lender, which is giving a limited interest in the property, and the lender gives money.  The money and terms of repayment are described in the note.

In the US we have two types of real property title which one or the other is adopted by each state.  "Title Theory" and "Lien Theory".  In a lien theory state the property is pledged as collateral and a lien is created.  The property owner retains title with the lien on the property.  These states use mortgages as their primary security instrument.  In title theory states the property is pledged and placed into trust.  Some states which are title theory allow for mortgages to be used.  Additionally, title theory states are generally non-judicial foreclosure states and title theory states are generally judicial foreclosure states.

In taxes we have a similar idea.  Tax Liens are certificates of lien against the property and Tax Deeds are ownership interest in the property.  A tax lien must be foreclosed upon as it does not carry an ownership interest in the property itself.  A tax deed does.  Some tax deeds sales can be redeemed by the property owner.  Meaning until a certain time the property owner can pay the back taxes and clear ownership.  In those settings the deed is sold but a redemption period must run it's course.  

Property taxes in most all cases have "Super Lien" status meaning no matter when they arise in time, which is place in title, they are automatically senior to other liens.  (which are not Super Lien status).  Mortgages and Deeds of Trust do not have this privilege.  A tax deed/lien is an involuntary lien - the government places the lien without consent and where a mortgage/dot is voluntary - the borrower gave the lien to a lender.

That's the nuts and bolts.