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#2260220 - 09/24/21 05:58 PM Subordination Request Letter
Processor21 Offline
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HI,
I am hoping someone can help me. I am looking for a subordination request letter template. I don’t need a subordination agreement, just a letter to send to other lenders when we are requesting if they’ll go behind our new lien. I have tried googling it but I am not getting what I THINK I need. Does anyone have a templates they could share?

thanks!!!

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#2260224 - 09/24/21 06:31 PM Re: Subordination Request Letter Processor21
rlcarey Offline
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You mean a cover letter to go along with the subordination agreement you are providing them?
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#2260234 - 09/24/21 07:30 PM Re: Subordination Request Letter Processor21
Andy_Z Offline
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You're going to ask another lender with an existing lien to fall behind your new lien. I guess my small community banking ways say, "not only no, but..." unless this business is dying and my loan is at risk and only your new funds will save my loan regardless of my collateral. I guess I was lucky enough to not have that happen.

I would assume this would all be worked out in advance and the paperwork would be a formality of an agreed upon action. In that case, "here is the subordination we discussed, please execute..." or perhaps you can be more specific as to the intent or conditions.
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#2260236 - 09/24/21 07:51 PM Re: Subordination Request Letter rlcarey
Processor21 Offline
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I guess a cover letter but we don't always create the subordination agreement because some lenders like to use their own and then we will have our legal team review them. So I want the processors to start out with a letter stating "hi, we want you to go behind our new lien. Do you want create the agreement or have us?" Obviously looking for something formal. But yes a cover letter would work and then I could tailor it to what we need.

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#2260239 - 09/24/21 07:55 PM Re: Subordination Request Letter Andy_Z
Processor21 Offline
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Yup! I want to say a good chunk of the time its on solar panel liens. This is in a Home Equity World by the way.

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#2260246 - 09/24/21 08:29 PM Re: Subordination Request Letter Processor21
Rocky P Offline
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Processor21, there is NO way the lenders should use their own letters. It is the bank’s letter. If some idiot LO puts something in stupid, or fails to run it by legal, the bank would be liable. IMHO a 1 D 10 T error.
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#2260248 - 09/24/21 08:38 PM Re: Subordination Request Letter Rocky P
Processor21 Offline
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So are you saying If I, Bank A, ask Bank B to go behind my new lien, Bank B shouldn't prepare their own subordination agreement?

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#2260250 - 09/24/21 08:48 PM Re: Subordination Request Letter Processor21
rlcarey Offline
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I am not sure why you would go that route. Then you need your own legal department and the title company to review what they prepared to see if it was acceptable. Why don't you just start with a simple cover letter requesting that they execute the attached subordination agreement that you provide?
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#2260252 - 09/24/21 08:50 PM Re: Subordination Request Letter Processor21
Rocky P Offline
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Florida
The bank should prepare it, not the letter directed by a LO. The post indicated, “. . because some lenders like to use their own. . .” That’s the fastest way to create a problem. It should be a bank letter/form created by legal, not a LO whose job is selling.
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#2260258 - 09/24/21 09:03 PM Re: Subordination Request Letter Rocky P
Processor21 Offline
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Oh I am sorry, I didn't add every detail but we are usually talking to an operation or underwriting group when we are requesting this. Never a sales team

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#2260260 - 09/24/21 09:04 PM Re: Subordination Request Letter rlcarey
Processor21 Offline
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Ok, I will make add that to the procedure. Thank you! Do you have a cover letter example?

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#2260262 - 09/24/21 09:12 PM Re: Subordination Request Letter Processor21
rlcarey Offline
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Galveston, TX
This really cannot be that hard, can it? I drafted the below in about 5 seconds. Whatever you use, run it past your legal counsel, since they will have to draft your subordination agreement form to attach anyway.


To Whom it May Concern,

Please see the attached completed subordination agreement. Our mutual customer has requested to refinance their current 1st lien mortgage. In order for us to fulfill their credit application, it will require that you subordinate you current lien to our new mortgage.

Please return executed document to:

Please contact us if you choose not to execute this document or if you have any questions at:
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#2260263 - 09/24/21 09:15 PM Re: Subordination Request Letter rlcarey
Processor21 Offline
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Thank you for the example and for being so nice!
Last edited by Processor21; 09/24/21 09:16 PM.
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