Are you sure your definition is right? A “subordination clause” in a mortgage makes the holder secondary or subordinate to a future lien. That future lien would take priority. Who generally benefit the most by a subordination clause in a trust deed? The trustor. The borrower (trustor) benefits the most from a subordination clause since this makes it easier to obtain an additional loan on their property. For example, the buyer of vacant land can obtain a construction loan more easily if the loan against the land will be subordinated to the construction loan.
@@RealEstateLicenseWizard A lien that is a later one can, with the permission (subordination clause)of the lien holder(s) that have a senior position, be allowed to be placed in first position. A subordination clause controls or adjusts the priority of mortgage loans. Most commonly, it keeps the junior mortgage secondary to the primary mortgage when the primary mortgage is refinanced.
@@SharpRydah Again, where is your source? This is the number one answer that shows up on google which is inline with our definition: www.investopedia.com/terms/s/subordination-agreement.asp
