Escrow & Title
In Alaska, a 'subordinate mortgage' is one that:
AHas higher priority than the first mortgage
BHas lower priority than an existing mortgage in the event of foreclosure✓ Correct
CIs paid off before the senior mortgage in bankruptcy
DCan be converted to a first mortgage at the lender's option
Explanation
A subordinate mortgage (also called a junior or second mortgage) has lower priority than the first (senior) mortgage. In foreclosure, the first mortgage is paid first from the sale proceeds. Any remaining funds go to subordinate lienholders in order of priority. Second mortgage holders receive nothing if the sale proceeds don't cover the first mortgage.
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