Rhode Island Subordination of Lien (Deed of Trust/Mortgage) refers to the legal process through which a creditor agrees to subordinate their lien or mortgage position to another creditor's lien or mortgage on a property. This agreement reorders the priority of the liens, allowing the second creditor to move ahead of the first creditor in the event of foreclosure or sale of the property. In Rhode Island, there are two common types of Subordination of Lien (Deed of Trust/Mortgage): 1. Voluntary Subordination: This occurs when the first creditor voluntarily agrees to subordinate their lien or mortgage position to a junior lien or mortgage. The decision is usually made to facilitate a borrower's eligibility to obtain additional financing, such as a home equity loan or a refinancing. The first creditor consents to move down the priority ladder and allows the second creditor to have a higher ranking position. 2. Involuntary Subordination: This type of subordination occurs as a result of a court order or legal action, requiring the senior creditor to subordinate their lien or mortgage to the junior creditor's lien or mortgage. It usually happens when the court believes that the interests of justice or fairness require modifying the lien priority. The court assesses various factors such as the intent of the parties, fraud, mistake, or undue influence when determining involuntary subordination. The Rhode Island Subordination of Lien (Deed of Trust/Mortgage) process involves several essential steps. First, it requires the preparation of a Subordination Agreement that outlines the terms and conditions under which the subordination will occur. The agreement should include the names of the involved parties, details of the liens or mortgages being subordinated, and any conditions or limitations agreed upon. Once the Subordination Agreement has been drafted, it is typically signed by all parties involved, including the borrower, the first creditor, and the second creditor. The agreement must also be notarized and recorded in the appropriate county land records office. Recording the subordination agreement ensures it becomes a public record, protecting the interests of all parties involved and providing notice to potential future creditors. Rhode Island Subordination of Lien (Deed of Trust/Mortgage) is a crucial legal mechanism that allows for the reordering of lien priorities when necessary. It enables borrowers to leverage additional financing and provides flexibility and options to creditors. Whether it is a voluntary or involuntary subordination, it is essential to ensure that all parties involved fully understand the terms and potential implications of the subordination agreement before proceeding.