Fiduciary Lien (Alienação Fiduciária)

Alienação fiduciária (fiduciary lien) is the legal mechanism through which the bank retains formal ownership of the property for the entire term of the financing. The buyer holds possession and use of the property, but full ownership only transfers once the debt is paid in full. If the borrower defaults, the bank can repossess the property through an out-of-court process in a much shorter timeframe than the previous judicial mortgage foreclosure process — generally between 3 and 6 months.