This is not something I have ever heard of. In the ordinary course you would record simultaneously with your new trust a Subordination Agreement. I have never heard of an auto subordination.  

I would be interested in seeing the document to see if there is language in it that speaks to the auto-subordination, but, I think that the lender who is currently in 2nd lien position has to specifically agree in writing to remain in 2nd lien position.  

I am very interested in the outcome of this.  Please up date when you get the document.

Charlene