Posted by LindaH
on April 1, 2009, 10:18 am, in reply to "subordination"
67.142.130.24
A method by which one entity agrees to take a lower, more inferior position (a "back seat" if you will") to another ....
Example: Borrower have first mortgage and equity line on property...refinance but do not want to close out the equity line....normally, when first mortgage is paid off and released the equity line would automatically move up into first lien position, new mortgage would come after, therefore second. New mortgage wants first lien position so equity line holder agrees to "subordinate" to the new mortgage - let new mortgage slip into first position and equity line holder remains in second.
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