Subordination Agreement

A subordination agreement is a legal document that establishes the priority of liens or claims on a property, typically when multiple loans or liens exist. It allows a newer lien, like a second mortgage, to take a subordinate position to an existing lien, such as a first mortgage, altering the standard repayment hierarchy. This agreement is crucial in real estate and refinancing, as it ensures that the primary lender maintains the first claim on the asset. 

A loan management software can help track subordination agreements, ensuring accurate prioritization of loans and efficient risk management.