subordination agreement
- A legally binding document wherein a lender consents to a lower collection priority for their debt, enabling a new loan to have precedence in a foreclosure or payoff scenario
- The bank crafted a subordination agreement to allow a new loan to take priority in case of foreclosure.
- To facilitate additional financing, the initial lender decided to enter into a subordination agreement making their loan second in line.
- On her advise, the property owner insisted on a subordination agreement before taking out a second mortgage.
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