Subordination Agreement

Definition: A subordination agreement is an agreement that changes the relative priority of specified liens or interests.

Example

An existing second lender agrees that a replacement first mortgage will remain ahead of its lien after refinancing.

Keep the distinction clear

Distinguish the agreement changing priority from an assignment transferring a lender's interest. The parties and precise terms matter.

Related terms

Subordination Clause · Assignment of Mortgage · Second Mortgage

Keep studying

Mortgages: Borrower, Lender, Ownership, and Key Clauses

References: Cornell LII: subordination agreement

Pronunciation (US): suh-bor-dih-NAY-shuhn uh-GREE-muhnt (capitals show stress)

Pronunciation reference: Merriam-Webster