This agreement allows one lien holder to subordinate its deed of trust to the lien of another lien holder. For valuable consideration, a particular deed of trust will at all times be prior and superior to the subordinate lien.
A North Carolina Subordination Agreement of Deed of Trust is a legal document used to modify the priority status of an existing deed of trust in relation to another debt or lien. This agreement is commonly employed in real estate transactions, where it allows for the adjustment of lien priority to accommodate new financing or to facilitate a refinancing arrangement. In simple terms, a subordination agreement places one debt or lien in a lower position, or subordinated position, in terms of priority compared to another debt or lien. This is typically done to enable a borrower to secure additional financing using the same property as collateral without jeopardizing the first lender's security interest. Keywords associated with a North Carolina Subordination Agreement of Deed of Trust include: subordination agreement, deed of trust, lien priority, real estate, refinancing, collateral, debt, lender, borrower, financing, security interest. In North Carolina, there are primarily two types of subordination agreements associated with a deed of trust: 1. Intercreditor Subordination Agreement: This type of agreement is executed when multiple lenders are involved in a real estate transaction. It outlines the lien priority and subordination terms between the lenders to establish the order in which they will be repaid in the event of default or foreclosure. It ensures clarity and protection for all parties involved. 2. Subordination Agreement for Refinancing: This agreement type is used when a borrower seeks to refinance their existing loan while keeping the original deed of trust intact. By signing this agreement, the borrower requests that the existing lender agrees to subordinate their lien to the new lender's interest. This allows the new lender to take the first position in terms of lien priority, ensuring their security interest in the property. Understanding and implementing a North Carolina Subordination Agreement of Deed of Trust is crucial for lenders, borrowers, and other parties involved in real estate transactions. It helps protect the rights of all parties and ensures transparency in lien priority and security interests.
