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Subordination is the process by which a creditor is placed in a lower priority for the collection of its debt from its debtor's assets than the priority the creditor previously had, [1] In common parlance, the debt is said to be subordinated but in reality, it is the right of the creditor to collect the debt that has been reduced in priority ...
A subordination agreement is a legal document used to make the claim of one party junior to (or inferior to) a claim in favor of another. It is generally used to grant first lien status to a lienholder who would otherwise be secondary to another party, with the approval of the party that would otherwise have first lien.
Subordinated bonds are regularly issued (as mentioned earlier) as part of the securitization of debt, such as in the issue of asset-backed securities, collateralized mortgage obligations or collateralized debt obligations. Corporate issuers tend to prefer not to issue subordinated bonds because of the higher interest rate required to compensate ...
And If you want to go this route, before you can refinance your primary mortgage, your mortgage lender must submit a subordination package — all of the documents supporting the request — to ...
A high-cost mortgage, defined by HOEPA as ... (a primary mortgage or refi of a primary mortgage) or 8.5 percentage points for a subordinate lien (like a home equity loan).
A mortgage is a legal instrument of the common law which is used to create a security interest in real property held by a lender as a security for a debt, usually a mortgage loan. Hypothec is the corresponding term in civil law jurisdictions, albeit with a wider sense, as it also covers non-possessory lien.
When refinancing, if the homeowner wants to refinance the first mortgage and keep the second mortgage, the homeowner has to request a subordination from the second lender to let the new first lender step into the first lien holder position. Due to lender guidelines, it is rare for conventional loans for a property having a third or fourth mortgage.
To give you a relatively simple mortgage banker definition, this is the entity that approves you for a loan and cuts a check to the home seller so you can get your keys to the house.