A clause in a second deed of trust that permits the first deed of trust to be refinanced without sacrificing its lien position is a/an:
A. acceleration clause
B. lien waiver
C. subordination clause
D. alienation clause
Answer: C. subordination clause
Explanation: A subordination clause in an earlier loan enables a loan recorded subsequently to take priority over the earlier loan. Refinancing is a new loan that takes the place of an existing loan, so without the subordination clause the second deed of trust would have higher priority than a refinancing of the first deed of trust that occurs after the second loan is made.
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