Prefer to talk in person? Find a mortgage specialist on Zillow
Profile picture for doany65

what does subordination of a second mortgage mean?

  • May 14 2009 - US
  • 2
    2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (22)

Best Answer

When you refinance your first mortgage and there is a 2nd that is not being paid off, it has to be subordinated.  That means that the 2nd mortgage lender agrees to remain in 2nd position.  What happens is when you payoff your first mortgage, the 2nd mortgage then becomes a first position lien on title, so the new 1st mtg company requires that the 2nd lien holder subordiante to them and remain in 2nd position.
  • May 14 2009
  • 4Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for doany65
Tammy:  Yours was the "best" answer for my needs.  I was interested in learning the definition of subordination as it relates to refi on a 1st mortgage alone.  Although I didn't specify that in my question, it's what I wanted to know and is exactly what you answered.  Thank you. 

The rest of you folks who use this forum for one-upping each other and bickering...I can tell you that this is not helpful coming from a layman who is looking for answers.  It starts to sound like WWE Smackdown and turns people off.  Although I'd like to give an honorary mention to Gregorio for the "sub" quiz...at least that one made me laugh!  Thanks all for your efforts.
  • October 08 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Justin, I was never saying that what Jacob said was not true, I was saying it is not what subordinate means. It is a product of the subordination that the second lien holder gets ripped in foreclosure, but that is not the definition of it. The op asked nothing about foreclosure, thus, to offer what he did as the answer to: "what does subordination of a second mortgage mean?", is what I take issue with.

Example:

OP: What does paying points mean?

Response: It means you can write them off on your taxes.

While true, it's not what it means and has nothing to do with the question asked.
  • May 14 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Jacob, I have good understanding of the English language and what you typed, is not what "subordination means." Maybe you should read it again or get it translated if necessary so you may better understand.


  • May 14 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Poor doany got more than he/she wanted here I'm sure. It is common lenderspeak to say "Subordinate a Second" but technically that phrase is used to mean Resubordinate a Second.  So the first answer to the question was the one that doany needed and that should have been the end of it.

Jacob's reference to foreclosure was used to demonstrate order of title, he could have also said in the case of refinance or in the case of selling the property, any of those would have proved the same point which is simply that subordinate means to be second (lesser/junior/etc).
  • May 14 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Ahhhhh shoot, did I just hear a BIG can of worms open up?
  • May 14 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

"Subordinationsimply means that in case of foreclosure, the first loan will be the first tobe paid and the second loan will be paid off second."

Read the statement in toto. "Subordination in case of foreclosure" are the key words.  Do not pass a verdict without reading the facts presented. Otherwise you become stupid!!
  • May 14 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Gee, I leave to get a mani and pedi and look what happened here!  LOL..
  • May 14 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

"Actually Jacob is correct.  Subordinate, or subordination simply means to be secondary or of less importance (junior lien)."

If you want to split hairs, they are in fact doing both. Once the refi takes place they would be in first position thus the need to subordinate. Since they have previously been in second position "resubordination" is equally accurate.

Jacob's answer was not accurate, it was stupid when he said: "Subordination simply means that in case of foreclosure, the first loan will be the first to be paid and the second loan will be paid off second."
No one mentioned foreclosures and that statement "subordination simply means" leaves the impression that it only deals with foreclosures and that is not what it "simply means".
  • May 14 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Are you telling me that the end result of subordination is something else? Then tell me what is the end result of subordination.

There is NO law which states that there is one and only one answer to a question. Only in simple maths 1 +1 = 2, and will always remain so!!!
  • May 14 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Actually Jacob is correct.  Subordinate, or subordination simply means to be secondary or of less importance (junior lien).

Tammy's answer refers to REsubordination in which the the junior lien agrees AGAIN to be junior.

The orginal question posted itself is flawed because it is redundant (subordination of a second).
  • May 14 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Jacob,

Tammy's answer was precise and accurate, yours was meandering and incoherent.

There is no law that you MUST answer questions that you are clearly unfamiliar with.

Stick to what you know!
  • May 14 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

As far as I am concerned the question is what is the impact of subordination and not how subordination is done. 

Answer the question instead of finding faults with answers.
  • May 14 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I can't stop laughing . . .  :-)
Gregorio, that is one of your all time funnies!
  • May 14 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Jacob, Draw a circle around the correct answer please and turn in your paper when you are done. You may be graded on a curve if needed.







Or None of the above.
  • May 14 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Um no you didn't explain what subordination means.  Not really sure what you are describing but you're not even close.
  • May 14 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I was explaining what subordination meant and nothing more.  How much money is left for the second lender is not the question. 
  • May 14 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Mike, you are correct. 

Jacob, you might want to read up......

And, yes Nick, it appears so!  LOL
  • May 14 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Wow Jacob. Are you seriously a lender?


  • May 14 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

It's also my understanding that in a foreclosure, the subordinated or 2nd loan is pretty much worthless. Which is why the subordinated lender may not agree to the second position if they feel the property is going to end up in foreclosure. Am I correct in that interpretation?
  • May 14 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

LOL-Jacob

Subordination simply means that in case of foreclosure, the first loan will be the first to be paid and the second loan will be paid off second.

So what you are saying is a subordination only applies to a foreclosure?  It means nothing if an individual is refinancing a first mortgage?
  • May 14 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.


Let me answer that question with an example.

Image you have a loan 80/10/10.

The first loan is with ABC lender. The second loan is with XYZ lender. Here is where the subordination comes in.   Subordination simply means that in case of foreclosure, the first loan will be the first to be paid and the second loan will be paid off second.

  • May 14 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.