A subordination clause is a priority-shifting clause. The New York booklet defines it as a clause that permits the placing of a later mortgage that takes priority over an existing mortgage. In other words, the earlier interest agrees to move down in priority.
This is a highly practical real-estate finance term. It does not create a mortgage by itself, but it changes the order in which security interests stand relative to one another. That is why it belongs naturally with mortgage on real property and lien vocabulary.
Practical note: The clause is about priority, not validity. A subordinated mortgage is still a mortgage; it simply yields priority to another interest under the agreed arrangement.
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