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what is a subordination agreement mortgages are ranked by priority within the public records first in time first and right a subordination agreement is a recorded document that allows the transfer of that priority for example let's say bank of america has a small balance first mortgage if the homeowner wanted to obtain a new and larger mortgage from wells fargo this would require boa to surrender its current priority position the way this is done is with the subordination agreement the agreement itself is a one-page document that needs to be executed in our example by boa once recorded the subordination agreement would give legal priority to the new wells fargo first mortgage and move bank of america to second position
