This is an official Washington form for use in land transactions, a Subordination Agreement (with representative acknowledgments).
Washington Subordination Agreement - with representative acknowledgments
Category:
State:
Washington
Control #:
WA-1042-08
Format:
Word;
PDF;
Rich Text
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Description
How to fill out Washington Subordination Agreement - With Representative Acknowledgments?
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FAQ
Despite its technical-sounding name, the subordination agreement has one simple purpose. It assigns your new mortgage to first lien position, making it possible to refinance with a home equity loan or line of credit.
But as property values are going up and the demand for refinance isn't as much, it seems that the subordination process has gotten a little easier. Typically, it takes two to three weeks to get the resubordination paperwork through, and it is likely to set you back $200 to $300.
A subordination agreement prioritizes collateralized debts, ranking one behind another for purposes of collecting repayment from a debtor in the event of foreclosure or bankruptcy. A second-in-line creditor collects only when and if the priority creditor has been fully paid.
Subordination agreements are prepared by your lender. The process occurs internally if you only have one lender. When your mortgage and home equity line or loan have different lenders, both financial institutions work together to draft the necessary paperwork.
An intercreditor agreement is a bit different than a subordination agreement. They both serve to do the same thing, allow two different lenders to split up the collateral of a business so both can be secured in the first lien on their respective collateral.
Unless there is a subordination agreement, it is virtually impossible to refinance your first mortgage. The document agreeing to the subordination must be signed by the lender and the borrower and requires notarization.
When a Borrower wishes to refinance the property, they must request a subordination request to the Lender. The Lender will subordinate their loan only when there is no cash out as part of the refinance.
A subordination agreement acknowledges that one party's claim or interest is superior to that of another party in the event that the borrower's assets must be liquidated to repay the debts.