Please be advised that the subordination review process can be relatively lengthy and may delay the closing of your pending transaction. In submitting your subordination request, you agree that HomEq will not be held liable for any damages arising from or related to HomEq’s failure to approve the subordination or approve it within a specific time limit, including, but not limited to, the expiration of a loan commitment or increase in interest rates. Submission of the Subordination Request Form, supporting documentation and payment of the review fee does not guarantee HomEq will approve the subordination of its loan and no reliance should be placed thereon.
Please complete the Subordination Request Form and submit it with all necessary documentation to the address on the Subordination Request Form. The subordination review process will not begin until the complete package and review fee are received. Only complete packages will be submitted for review. Fax requests will not be accepted. If the subordination request is approved, HomEq will prepare the Subordination Agreement.
Should you have any questions regarding this matter, please contact our Customer Service Department at (877) 867-7378, 5:00am to 5:30pm, PT, Monday through Friday.
Frequently Asked Questions
Q: What is a Subordination Agreement?
A: A subordination agreement is a recorded document used to establish lien position when more than one lien exists on a property.
Q: When would I need a Subordination Agreement?
A: You would need a subordination agreement if you have a first and second mortgage and you want to refinance your first mortgage. For example, you want to refinance your 13% first mortgage with a 9% first. When the 13% mortgage is paid off, the second mortgage will become the first mortgage. The lender will make the new 9% mortgage only if it is recorded as a first mortgage. The solution is to have the owner of the second mortgage sign a subordination agreement so the second will stay in its second position - subordinating allows the new 9% mortgage to be a first mortgage.
Q: My loan with you isn't changing, why do you care if we get a new loan?
A: When your new lender agreed to make you a loan, the decision was based upon a set of conditions including your existing first loan payment and interest rate being a certain amount. We must verify that your ability to repay our loan is not diminished by the new loan.
Q: Why does HomEq require so many documents for a subordination?
A:HomEq must review each subordination request to verify that your
ability to repay our loan is not diminished by the new loan.
Unfortunately, there is no one document that provides all the necessary
information. With all the requested documents, we can make the best
decision.
Q: Why does HomEq charge a fee for a Subordination Agreement?
A: A fee is required to process the paperwork as well as research the time sensitive information.
Q: How does HomEq calculate the Current Loan to Value (CLTV)?
A: HomEq calculates the CLTV by adding the payoff balance of the first
loan to the payoff balance of any other secured loan and dividing the
sum by the property value.
Q: Why does it take so long to approve a subordination?
A: Completing the document review, performing the calculations, preparing
the subordination agreement and notarizing the agreement all take time.
HomEq strives to complete subordination requests as quickly as
possible. However, HomEq cannot begin the review process until all the
necessary documentation is received together with the subordination
fee. Delays can occur when a lender or title company fails to supply
all the necessary information.
Q: Why does HomEq charge a fee to redraw a Subordination Agreement?
A: When a Subordination Agreement must be prepared a second time it is
because something has changed, such as the amount of the new first
mortgage. A fee is charged because of the time and effort involved in
preparing the redraft.
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