Nolo's Plain-English Law Dictionary

Subordination Agreement

A written contract in which a lender who has secured a loan by a mortgage or deed of trust agrees with the property owner to subordinate its loan (accept a lower priority for the collection of its debt), thus giving the new loan priority in any foreclosure or payoff. The agreement must be acknowledged by a notary so that it can be recorded in the official county records. (See also: subordination)
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