Sub Agreement Define

Posted Oktober 9th, 2021 by admin

The Mortgagor essentially repays it and gets a new loan when a first mortgage is refinanced, which now puts the most recent new loan in second place. The second existing loan increases to become the first loan. The lender of the first mortgage refinancing now requires the second lender to sign a subordination agreement in order to reposition it as a priority when repaying the debt. The priority interests of each creditor are modified by mutual agreement by what they would otherwise have become. Subordination is the process in which a creditor has less priority in collecting its debts from its debtor`s assets than the priority the creditor previously had,[1] Generally, the debt is considered subordinated, but in reality, it is the creditor`s right to collect the claim that has been reduced in priority.

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