If there is some sort of "automatic subordination" I don't think it would be created by the language in document you are about to receive.  Unless there is something in your state law that I have never heard of, the lender subordinating their interest would have to authorize that.  The new lender can't just insert something in their mortgage to subordinate another's position.

That said, I suppose it would be possible that something was inserted in the second mortgage holder's mortgage that states that they will agree to subordinate to any lender who refinances the first.  That might create some type of "automatic subordination."

Please let us know if you find out how that works.

Best,
Robert A. Franco
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