AFTER FILING PLEASE RETURN TO:
(hereinafter the “Mortgagee”) is the holder and owner of a deed to secure debt (hereinafter the “security deed”) made by
(hereinafter designated as the “Borrower”), dated
, and recorded in Deed Book , Page , in the
records of the Superior Court of County, , conveying security title to certain property as described in Exhibit “A” attached hereto and made a part hereof by reference (hereinafter the “Property”).
The Borrower has applied to (hereinafter the
“Lender”), for a loan in the sum of $ for Lot and $
for Lot (hereinafter the “construction loan”) to be secured by a deed to secure debt (hereinafter the “construction loan security deed”) conveying to Lender security title to the Property. Lender has refused to make the construction loan unless the security deed shall be subordinated to the construction loan security deed.
THEREFORE, in consideration of ONE DOLLAR ($1.00) in hand paid by Lender to Mortgagee, and in consideration of the consummation of the construction loan in reliance upon this agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Subject to the terms and conditions contained herein, Mortgagee hereby subordinates all its right, title or interest under the security deed in or to the Property, as against the construction loan to be so made by Lender, so that the construction loan security deed to be executed by Borrower to Lender shall convey security title to the Property superior to the security deed and superior to the indebtedness thereby secured.
2. Lender hereby agrees that in the event of a default under the construction loan or under the construction loan security deed, Lender shall give to Mortgagee written notice of such default and Mortgagee shall have the right within ten (10) days after receipt of said notice to: (a) cure such default in which case Lender shall reinstate the construction loan, or (b) pay to Lender the unpaid principal balance of the construction loan and accrued interest thereon and all costs associated therewith actually incurred by Lender in which case Lender shall assign and deliver to Mortgagee, without recourse or warranty, except as to correctness of the unpaid principal balance of the construction loan and accrued interest thereon, all instruments evidencing and securing the construction loan.
3. Lender further agrees that it has not made and will not make any other or additional loans or advances to Borrower which are or would be secured by the construction loan security deed and that the construction loan security deed shall secure only the construction loan, which is in the principal amount of $
for Lot and $ for Lot , and advances contemplated under
§ of the and no other loans or advances from Lender to Borrower.
4. The parties hereto agree that all notices required by this agreement shall be in writing and delivered personally or by certified mail. For purposes of this agreement the address of Mortgagee is:
For purposes of this agreement the address of Lender is:
Attn: Residential Construction Department
5. This agreement shall be governed by the laws of the State of
and shall be binding upon and shall inure to the benefit of the successors and assigns of the parties hereto, including without limitation any purchaser at any foreclosure sale under the security deed.
6. The security deed shall remain otherwise in full force and effect, the subordination herein provided being limited in application to the construction loan proposed as herein set forth, or any renewal thereof.
WITNESS the hands and seals of the parties, this the day of
Signed, sealed and delivered in the presence of: ______________________________
Its: Authorized Representative
Signed, sealed and delivered in the presence of: _____________________________
State Specific Subordination Forms
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