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Subordination occurs when the claim of one creditor on a real estate asset is made junior to another creditor’s claim, which is common during debt refinancing. The process begins with senior debt placed on the property at the time of acquisition, establishing a priority based on the chronological order of claims. As junior debt is added later, it remains subordinate to the senior debt. If the senior debt is refinanced with a new loan that is recorded after the junior debt, the claims are restructured. The refinancing can alter the hierarchy of claims, affecting the position of junior debt in relation to the new senior debt on the property.