Agreement to Subordinate Lien Between Lienholder and Lender Extending Credit to Owner of Property Subject to Lien
Overview of this form
The Agreement to Subordinate Lien Between Lienholder and Lender Extending Credit to Owner of Property Subject to Lien is a legal document that establishes an agreement between a lienholder and a lender. This form confirms the lienholderâs consent to subordinate their existing lien, allowing the lender to take priority on the same property. This form is essential in situations where a property owner needs to secure additional financing, and it differentiates itself by specifically addressing the subordination of existing liens to accommodate new loans.
What’s included in this form
- Identification of the parties involved: lienholder, lender, and property owner.
- Description of the property subject to the lien.
- Details of the existing lien, including amount and recording information.
- Acknowledgment of the lender's willingness to extend credit based on the subordination agreement.
- Terms of subordination and the requirement for the lienholder to execute necessary assignments.
- Signatures of involved parties to validate the agreement.
When this form is needed
This form is typically used when property owners seek to obtain loans that necessitate the subordination of an existing lien. This can occur in scenarios such as refinancing an existing mortgage, obtaining a construction loan, or acquiring additional financing for property improvements. By using this form, parties can ensure the lender's claim takes precedence over previous liens, facilitating the loan approval process.
Who can use this document
- Property owners seeking additional financing against a property with existing liens.
- Lenders wishing to secure their loan with priority over existing liens.
- Lienholders who agree to subordinate their lien for the benefit of the property owner and the lender.
How to complete this form
- Identify the parties: Fill in the names and addresses of the lienholder, lender, and property owner.
- Specify the property: Provide the complete address of the property subject to the lien.
- Detail the existing lien: Include the lien amount and reference the mechanics lien statute applicable in your state.
- Enter the loan details: Include the date and record information related to the lender's loan agreement.
- Obtain signatures: Ensure all parties sign and date the form to make it legally binding.
Does this form need to be notarized?
This form does not typically require notarization to be legally valid. However, some jurisdictions or document types may still require it. US Legal Forms provides secure online notarization powered by Notarize, available 24/7 for added convenience.
Avoid these common issues
- Failing to accurately identify the parties involved can lead to legal complications.
- Not including complete and correct property addresses may invalidate the agreement.
- Neglecting to provide adequate details about the existing lien can cause confusion about lien priority.
Benefits of completing this form online
- Convenient access to a reliable legal template that can be downloaded and customized.
- Editable format allows for easy input of specific details relevant to your situation.
- Trustworthy design, created by licensed attorneys to ensure legal sufficiency.
Form popularity
FAQ
A subordination agreement acknowledges that one party's claim or interest is superior to that of another party in the event that the borrower's assets must be liquidated to repay the debts.
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.
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.
A subordination agreement often comes up when a home has a first and a second mortgage, and the borrower wants to refinance the first mortgage. If you have two mortgages on your home and refinance the first loan, the refinancing lender might require a subordination agreement.
And many lenders charge a fee to review the subordination package, a fee that might run as high as $100. Your lender will probably pass this fee to you.
Subordination is the tenant's agreement that its interest under the lease will be subordinate to that of the lender.Attornment is the tenant's agreement to become the tenant of someone other than the original landlord and who has now taken title to the property.
Resubordination is the process of keeping the first mortgage in first place, ahead of other mortgages. When you refinance your first mortgage, the lender will insist on resubordinating the home equity loan or line of credit. The equity lender isn't required to resubordinate.
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.
But as property values are going up and the demand for refinance isn't as much, it seems that the subordination process has gotten a little easier. Typically, it takes two to three weeks to get the resubordination paperwork through, and it is likely to set you back $200 to $300.
