This form is an subordination agreement which puts a debt or claim which has priority in a lower position behind another debt, particularly a new loan. It is a contract in which a junior creditor agrees that its claims against a debtor will not be paid until all senior indebtedness of the debtor is repaid.
Alabama Subordination Agreement
State:
Alabama
Control #:
AL-012-06-CP
Format:
Word;
PDF;
Rich Text
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FAQ
Subordination clauses in mortgages refer to the portion of your agreement with the mortgage company that says their lien takes precedence over any other liens you may have on your property.The primary lien on a house is usually a mortgage. However, it's also possible to have other liens.
Unless there is a subordination agreement, it is virtually impossible to refinance your first mortgage. The document agreeing to the subordination must be signed by the lender and the borrower and requires notarization.
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.
When a Borrower wishes to refinance the property, they must request a subordination request to the Lender. The Lender will subordinate their loan only when there is no cash out as part of the refinance.
An agreement to keep a second (or subordinate) mortgage in second position, even as the first mortgage is refinanced. The second mortgage is also known as a home equity loan or home equity line of credit.
: placement in a lower class, rank, or position : the act or process of subordinating someone or something or the state of being subordinated As a prescriptive text, moreover, the Bible has been interpreted as justifying the subordination of women to men.
A subordination agreement is a legal document that establishes one debt as ranking behind another in priority for collecting repayment from a debtor. The priority of debts can become extremely important when a debtor defaults on payments or declares bankruptcy.