Request Loan Subordination

​Required documentation

When requesting a loan subordination, you will need the following items:

• A formal written request from the lender or title company outlining the following:
• Loan terms (including the new loan amount)
• Who is paid out of escrow (if applicable)
• Pre and post total monthly payment
• Lender’s name and contact information
• Instructions on the return of the executed subordination agreement
• Copy of appraisal or real estate valuation
• Current preliminary title report
• Current loan estimate signed by the applicant
• Copy of the 1003 application with current information signed by the applicant
• Statement from client including:
• Authority for the City of Salem to provide loan information to lending or title company
• Original signature - faxes accepted when originals follow
• A non-refundable $500 fee per loan to review the subordination (checks payable to City of Salem, credit cards and cash are not accepted).

Process

After receiving all required documentation, expect a minimum of 21 business days for the review process.

Subordinations may be approved if the following conditions exist:

• Rate and term refinance with no cash out and/or additional debt added to the first mortgage loan, regardless of loan to value (LTV)
• Total LTV is at/or below 80%
• New loan doesn't exceed a 30-year term
• Interest rate is fixed

Subordinations will not be approved if the following conditions exists:

• The subject property is being used as an investment property. Property must be the primary residence of the borrower
• The City currently holds the first lien position

If you are requesting an exception to this policy, please include a statement of explanation. Lenders may want to discuss the request with their clients prior to submitting documentation. The City will complete a Subordination Agreement. Original recorded agreements are to be returned to the City of Salem.

​Applicable document