Subordination


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Subordination

To put in an inferior class or order; to make subject to, or subservient. A legal status that refers to the establishment of priority between various existing liens or encumbrances on the same parcel of property.

A subordination agreement is a contract whereby a creditor agrees that the claims of specified senior creditors must be paid in full before any payment on a subordinate debt can be paid to the subordinate creditor.

A subordination clause in a mortgage is a provision that gives a subsequent mortgage priority over one that has been executed at an earlier date.

subordination

n. allowing a debt or claim which has priority to take second position behind another debt, particularly a new loan. A property owner with a loan secured by the property who applies for another loan to make additions or repairs usually must get a subordination of the original loan so the new obligation is in first place. A declaration of homestead must always be subordinated to a loan. (See: subordination agreement)

See: allegiance, array, bondage, conformity, order, servitude, subjection
References in periodicals archive ?
Such an arrangement makes it possible for patronage and capital investment to remain consistent, which reduces the significance of saying that there is subordination of capital.
xxxvii) The authors recognize that the subordination of women within the health care professions occurred because the ideology of inequality of the sexes was part of mainstream thought.
Of the remaining four, two included submissive wives, and two included wives who deeply resented their subordination to husbands.
Fred Kent claimed that Chase's mortgage as well as Selma Kent's subordination agreement should be invalidated on the theory that Chase's declaration that the work-out agreement was null and void amounted to a rescission of that agreement, with the result that the Chase mortgage and subordination agreement of Selma Kent would no longer have any legal effect.
In the past, landlords were in such a dominant position that most tenants (other than the strongest of anchor tenants) were forced to accept the standard subordination clause, and until recently most tenants did not think much about the possibility of a mortgage foreclosure on the shopping center.
50 percent subordinated class and a subordination spread account for liquidity.
85% subordination provided by classes M-5, M-6, M-7 and M-8, initial OC and monthly excess interest.
20% subordination provided by class B-2 and B-3, the monthly excess interest and target OC.
In addition to enhancement levels for each class of notes discussed above, under the expected base case scenario excess spread provides an additional 2% enhancement in the form of class D (privately placed) subordination.
In addition to enhancement levels for each class of notes discussed above, under the expected base case scenario, excess spread provides an additional 2% enhancement in the form of class D (privately placed) subordination.
40% subordination provided by classes M-1 through M-11, monthly excess interest, and initial overcollateralization (OC) of 1.
Fitch ratings on the notes and certificates are based upon their respective levels of subordination, the specified credit enhancement amount, which consists of funds in the reserve account, overcollateralization (OC), and the yield supplement overcollateralization amount (YSOA).