What does secured by a subordinate lien mean?

What does secured by a subordinate lien mean?

Related Definitions Subordinate Liens means all liens, security interests and assignments with respect to the Collateral securing payment or performance of the Borrowers’ obligations to Arrowhead for Subordinated Debt. Sample 2.

Is a subordinate lien a junior lien?

Subordination is the act by which a beneficiary that has a senior lien based on the general priority rules, voluntarily agrees, for consideration, that its lien would be junior to a lien that is subsequently recorded.

What is a subordinate claim?

Any claim to payment so stated to be subordinated is referred to as a “Subordinated Claim”; each claim to payment to which another claim to payment is a Subordinated Claim is referred to as a “Senior Claim” with respect to such Subordinated Claim.

What does subordinate clause mean in real estate?

When you take out a mortgage loan, the lender will likely include a subordination clause. Within this clause, the lender essentially states that their lien will take precedence over any other liens placed on the house. A subordination clause serves to protect the lender in case you default.

What’s the definition of subordinated?

1 : placed in or occupying a lower class, rank, or position : inferior a subordinate officer. 2 : submissive to or controlled by authority.

Who prepares a subordination agreement?

Subordination agreements are prepared by your lender. The process occurs internally if you only have one lender. When your mortgage and home equity line or loan have different lenders, both financial institutions work together to draft the necessary paperwork.

What does subordinate mean in real estate?

Subordination is the process of ranking home loans (mortgage, HELOC or home equity loan) by order of importance. Through subordination, lenders assign a “lien position” to these loans. Generally, your mortgage is assigned the first lien position while your HELOC becomes the second lien.

How does a subordination agreement work?

A subordination agreement prioritizes collateralized debts, ranking one behind another for purposes of collecting repayment from a debtor in the event of foreclosure or bankruptcy. A second-in-line creditor collects only when and if the priority creditor has been fully paid.

Who benefits from a subordination clause in a deed of trust?

The borrower (trustor) benefits the most from a subordination clause since this makes it easier to obtain an additional loan on their property. For example, the buyer of vacant land can obtain a construction loan more easily if the loan against the land will be subordinated to the construction loan.

Can a subordinate lien be put on a mortgage?

A subordinate lien can be put on a mortgaged property . The most common type of subordinate lien is a second mortgage. Sometimes unpaid bills result in a mechanic’s lien being placed on your property — another type of subordinate lien.

What is a subordinate lienholder?

A subordinate lien is any secondary lien that is placed on a person’s property. This can include mortgaged property like a home or a fully owned property, like a vehicle. In basic terms, a subordinate lien is any lien that has less of a payment priority than liens that have already been placed.

What is Lien subordination?

​​Lien Subordination occurs when the Department of Revenue allows its lien to take a lower priority than someone else’s lien. Lien Subordination is made at the discretion of the Department of Revenue.

Which Lien is a junior lien?

Junior Lien Law and Legal Definition. Junior lien is a lien placed upon property after a previous lien has been made and recorded. It is a lien that is junior or subordinate to another lien on the same property. It will be paid after earlier liens have been paid.

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