New Jersey Real Estate Practice Exam Free Practice Question
A subordination agreement is used to
Correct Answer: A
Rationale: A subordination agreement is primarily utilized to change the priority of mortgages, allowing a new loan to take precedence over existing ones. This is crucial in refinancing or obtaining additional financing.
Option B, initiating foreclosure proceedings, is not correct as subordination agreements do not directly involve foreclosure actions.
Option C refers to pledging property without relinquishing possession, which is more aligned with a pledge or lien, not subordination.
Option D involves assigning rents, which relates to securing a lender's interest during borrower default, but does not pertain to altering mortgage priority.
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