Who should pay for a mortgage subordination fee?
I am refinancing my first loan. The bank has to submit papers to my second loan bank for subordination. My first bank wants me to pay the subordination fee. The second bank tells me that the borrower (me) should not have to pay that fee. Who is responsible for the subordination fee?
Normally when a first mortgage is paid off the second moves into the first position unless the holder agrees to "subordinate" the second. A subordination agreement is an instrument that allows a first lien or interest to be paid off and allows another first mortgage company to come in and be the first priority lien holder.
It is very common for the borrower to pay subordination fees. The second mortgage belongs to the borrower and most likely it is the borrower requesting to keep it open. Most banks handling a refinance would rather you pay-off the second mortgage rather than subordinate.
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I hope this information helps you Find. Learn & Save.
From my perspective, the important bits of information to learn are, was the servicer really fishing for a reason to kill the deal, and did it know of the nearby foreclosure?
We are in the process of closing on a VA IRRRL refinance, involving the subordination of a HELOC. The lender agreed to the subordination and we submitted the request to our secondary lender to whom we paid $350.upfront and directly. Comes closing day, we sign the documents and realize afterward, that the title company has charged us $350. for subordination charges. I recognize the requirement for the secondary lender fees, but is customary for the title company to require additional fees, or are they double billing through an internal error of some kind?
This sounds like a double fee. The title company might charge a minimal fee for registering the subordination.