A New Hampshire Subordination Agreement — Lien is a legal document that allows one creditor to waive their priority position in favor of another creditor in regard to the distribution of proceeds from the sale of a property. This agreement clarifies the order in which creditors will be paid in the event of a default or foreclosure. In New Hampshire, there are two primary types of subordination agreements related to liens: 1. New Hampshire Subordination Agreement — Mortgage Lien: This type of agreement is commonly used in real estate transactions where the property serves as collateral for a mortgage loan. By signing this agreement, a junior lien holder (typically a second mortgage lender) agrees to subordinate their lien to the primary mortgage lender. This means that the primary mortgage lender will have the first right to be repaid from the proceeds of the property's sale, while the junior lien holder must wait until the primary lender's claims are satisfied. 2. New Hampshire Subordination Agreement — Mechanic's Lien: This type of agreement applies to construction projects where a contractor or subcontractor has filed a mechanic's lien against the property. By signing this agreement, the lien holder consents to subordinate their lien to other creditors, often to secure financing or refinancing for the property. It ensures that if the property is sold or refinanced, the proceeds will first be used to satisfy the higher-priority liens before the mechanic's lien. Keywords: New Hampshire, Subordination Agreement, Lien, Mortgage Lien, Mechanic's Lien, priority, creditors, foreclosure, default, property, collateral, real estate, proceeds, repayment, second mortgage, junior lien holder, primary lender, mechanic's lien, construction, contractor, subcontractor, financing, refinancing.
New Hampshire Subordination Agreement - Lien
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Lenders can execute what are referred to as executory subordination agreements. Executory subordination agreements are essentially a promise to enter into a subordination agreement in the future if another loan enters the picture, like a construction loan.
Subordination agreement is a contract which guarantees senior debt will be paid before other ?subordinated? debt if the debtor becomes bankrupt.
Subordinated debt (also known as a subordinated debenture) is an unsecured loan or bond that ranks below other, more senior loans or securities with respect to claims on assets or earnings. Subordinated debentures are thus also known as junior securities.
Subordination agreements are used to legally establish the order in which debts are to be repaid in the event of a foreclosure or bankruptcy. In return for the agreement, the lender with the subordinated debt will be compensated in some manner for the additional risk.
Example of a Subordination Agreement A standard subordination agreement covers property owners that take a second mortgage against a property. One loan becomes the subordinated debt, and the other becomes (or remains) the senior debt. Senior debt has higher claim priority than junior debt.
A subordination clause is a clause in an agreement that states that the current claim on any debts will take priority over any other claims formed in other agreements made in the future. Subordination is the act of yielding priority.
A subordination agreement must be signed and acknowledged by a notary and recorded in the official records of the county to be enforceable.
A Subordination Agreement is a legal document that establishes the priority of liens or claims against a specific asset.