If a child support debtor is attempting to refinance his property to lower his interest rate and payment but isn't taking any money (equity) out of the property, will DCSS subordinate their lien in favor of the new Mortgage?
It depends. If the obligor is paying regularly by wage assignment or shows a good steady pay history and his/her arrearages are not excessive, then as long as he is not taking equity out of the property to pay off other bills or taking out cash for him or herself, DCSS will probably offer to subordinate its lien to the new first trust deed (mortgage).
If, however, the obligor is not paying his/her support obligation regularly or his arrearages are excessive or if he/she is taking money out of the transaction to pay off other creditors, then DCSS will demand payment of the arrearages before subordination or matured installment will be issued.
Occasionally if there are insufficient funds to pay the entire debt owed, a partial payment will be accepted and the remainder of the debt will be subordinated to the first trust deed (mortgage). The Assistant Department Counsel will make this decision after a thorough review of the obligor's payment record and consultation with the custodial parent.
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