General Mortgage Knowledge · 20% of the SAFE exameasy
Correct answer: The process of one lien holder agreeing to take a lower priority position behind another lien
Subordination is a legal process where a lien holder agrees to accept a lower priority position. For example, when a borrower refinances their first mortgage but keeps their HELOC, the HELOC lender may need to sign a subordination agreement to remain in second position.
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