§ 4-111. Subordination of lender's interest

   (a) Definitions. --

   (1) In this section the following words have the meanings indicated.

   (2) "Lender" means a person holding an interest in or lien on property pursuant to a mortgage or deed of trust.

   (3) "Subordination agreement" means an agreement establishing priorities:

      (i) Between or among lenders; or

      (ii) Between or among a lender and any other person or persons holding an interest in property.

(b) Subordination of interest. -- A lender may subordinate its interest under a mortgage or deed of trust to the interest of another lender or to the property interest of a person, through execution of a subordination agreement on behalf of the subordinating lender by:

   (1) As to a lender secured by a mortgage, the mortgagee or assignee; or

   (2) As to a lender secured by a deed of trust, the trustee or successor trustee or the holder of the note or other obligation secured by the deed of trust.

(c) Applicability. -- This section applies to all subordination agreements existing on or after October 1, 1997.

HISTORY: 1997, ch. 633.