The other clause usually found in junior mortgages is the "subordination clause." This is designed for the protection of the mortgagor, the owner of the property. The junior mortgagee when he made his loan was willing to take as security the property already subject to a mortgage or mortgages to secure a certain sum or sums. There should be no reason why his mortgage should not continue in the same subordinate position. But without any provision to cover the situation, the junior mortgagee's mortgage would automatically become a first lien upon payment of the prior mortgage claims. Hence it is customary to insert a clause by which the junior mortgage's position is fixed. The following is a satisfactory form:

This mortgage is subject and subordinate to a mortgage given to secure the payment of $................ and interest, recorded in the office of the

.................... of the County of ................ in Liber ..........

of Mortgages, at page..........., now a prior lien on said premises, and shall be and remain subject and subordinate to said mortgage and to any renewal or extension thereof or to any new mortgage given to replace it to secure an amount not exceeding the amount of said mortgage.

Special forms of mortgages. Building-loan mortgage. - In addition to the form of mortgage which has been considered there are two other forms of mortgage which are used when appropriate.

The building loan mortgage is distinct in that the amount of the loan is not fully paid to the borrower when the bond and mortgage is delivered. Its purpose, as the name implies, is to aid a builder in financing the erection of a building. Naturally the amount of the loan is based upon the value of the land and the completed building. The lender would be foolish to advance the entire loan before erection, yet the builder does not wish to commence work till he knows he can rely on the loan being made. To provide for this situation, the building loan mortgage came into use. An agreement is made between the lender and borrower and usually filed in addition to the bond and mortgage. This agreement provides in substance that the borrower shall erect a certain building (sufficiently de scribing it) on the land and that the lender shall loan upon the security of such land and building a specified amount to be repaid upon completion of the building. The agreement further provides that the amount of the loan shall be advanced to the borrower in instalments as the building progresses, stating either that the amount and times of advances are to be at the lender's discretion, or in certain amounts at fixed periods in the course of construction. The interest specified in the agreement, as well as in the bond and mortgage, is payable only on the amounts of the instalments from the date of advance. It is often provided that the loan shall continue until a definite period after completion. This enables the builder more readily to sell his house. (Appendix forms 54 and 55.)