The Company may, at the option of its Board of Directors evidenced by a Board Resolution, and at any time, elect to have either Section 13.2 or Section 13.3 hereof be applied to all outstanding Securities upon compliance with the conditions set forth below in this Article Thirteen. The borrower uses proceeds from a refinance or sale to purchase securities. 'All Intensive Purposes' or 'All Intents and Purposes'? Allows income from the mortgaged property to be applied to the mortgage payments should they become delinquent. A clause within a contract or deed providing for annulment. Defeasance Clause: A mortgage provision indicating that the borrower will be given the title to the property once all mortgage terms are met. Defeasance is a substitution of collateral. Defeasance clause Definition. 2. a. a collateral deed or other writing embodying such a condition. Why Do “Left” And “Right” Mean Liberal And Conservative? Only required clause in a mortgage. 2. The defeasance clause is … “Defeasance.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/defeasance. the act or process of rendering null and void; annulment, a condition, the fulfilment of which renders a deed void, Encyclopaedia Britannica, 11th Edition, Volume 7, Slice 10, Encyclopaedia Britannica, 11th Edition, Volume 4, Slice 2. defeasance clause - Translation to Spanish, pronunciation, and forum discussions How does it work or how can it affect the title to a property? It is the defeasance clause itself found in the mortgage contract that determines when the lender will give up the title to the property after the borrower has fulfilled all of the loan obligations. Defeasance. This can include penalties for prepayment should the loan come with them. Both the borrower's debt and the offsetting cash or bonds are removed from the balance sheet. Defeasance definition, a rendering null and void. Define defeasance. Full Definition of Defeasance. The Dictionary.com Word Of The Year For 2020 Is …, “Affect” vs. “Effect”: Use The Correct Word Every Time. The voiding of a contract or deed. Defeasance often renders a loan void given that the borrower sets aside sufficient cash to offset the outstanding debt. Build a city of skyscrapers—one synonym at a time. 1. Defeasance clause is a provision in a mortgage deed that provides that the conveyance to the mortgagee will be ineffective if the mortgagor pays the debt on time. A provision or condition upon which a right or interest is terminated. Definition: A provision in a mortgage that specifies the terms and conditions to be met in order to avoid default and thereby defeat the mortgage. © William Collins Sons & Co. Ltd. 1979, 1986 © HarperCollins What Is An Em Dash And How Do You Use It? 64. In the most simple terms, a defeasance clause is a contract term included in a mortgage that will allow the homebuyer to redeem full, unencumbered rights to the property upon the last payment to the mortgage lender. Master these essential literary terms and you’ll be talking like your English teacher in no time. It occurs when cash or bonds equivalent to a borrower’s debt is substituted for the collateral and used to service the debt. Describe 2020 In Just One Word? An instrument which defeats the force or operation of some other deed or estate. Defeasance Clause Law and Legal Definition. The clause in a mortgage agreement that gives the borrower the right to redeem title to the property upon payment to the lender of the complete debt obligation. 575 Willes, 108; and vide Carth. defeasance synonyms, defeasance pronunciation, defeasance translation, English dictionary definition of defeasance. Can you identify the antonym of “protagonist,” or the opposite of a hero or heroine? A protagonist is the main character of a story, or the lead. 2. 15th century, in the meaning defined at sense 1a(1), Middle English defesaunce, borrowed from Anglo-French defaisaunce, defesaunce "undoing, ruin, annulling of a document, condition in the document activating the annulment," from defesaunt, present participle of defaire, desfaire "to undo, put an end to, destroy, nullify" + -aunce -ance — more at defeat entry 1. Defeasance in a bill of sale is the putting an end to the security by realizing the goods for the benefit of the mortgagee. Delivered to your inbox! In securities trading, where a clearing house becomes counterparty to each side of a trade, after the trade has been agreed. Defeasance - definition of defeasance by The Free Dictionary. A defeasance clause is a provision of a mortgage agreement that states that the borrower will be given the full title to the property once mortgage terms are met. The loan, however, is not paid off. Clause is the term used to identify a certain section of a contract or policy. The clause may also detail additional information. Defeasance clause Defeasance clause; Defeasance clause Definition. Please tell us where you read or heard it (including the quote, if possible). Definition. Defeasance of municipal bonds. Pronunciation: \di-ˈfē-zən(t)s\ \ˈklȯz\ Used in a Sentence: Once the debt is repaid, the defeasance clause defeats the mortgage lien and the property is no longer pledged as collateral. The securities are pledged to the lender, who releases the real estate from the mortgage. Anglo-French defesance, literally, undoing, destruction, from Old French deffesant, present participle of deffaire to destroy, undo — see defeat, Thesaurus: All synonyms and antonyms for defeasance, Nglish: Translation of defeasance for Spanish Speakers, Britannica English: Translation of defeasance for Arabic Speakers. Defeasance Clause Definition. Section 13.1.Option to Effect Legal Defeasance or Covenant Defeasance. It must be of a thing defeasible, and all the conditions must be strictly carried out before the defeasance can be consummated. A rendering void; an annulment. Summary. We Asked, You Answered. Article describing the method to legally extinguish debt. “Epidemic” vs. “Pandemic” vs. “Endemic”: What Do These Terms Mean? Receivership clause. A clause in a deed, lease, will or another legal document that completely or partially negates the document if a certain condition occurs or fails to occur. Defeasance also means the act of rendering something null and void. See more. The related rules section is for members only and includes a compilation of all the rules of law in Quimbee's database relating to this key term. Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free! "Defeasance is a complex process," said Jack Rose, Chief Strategist at Breakwater Equity Partners. 85-42, which addressed "in-substance defeasance." Every defeasance must contain proper words, as that the thing shall be void. For investors borrowing money to purchase commercial real estate, having a defeasance clause in the loan documents is a fact of life in finance. That, which in the same deed is called a condition, in another deed is a defeasance. b. Defeasance definition: the act or process of rendering null and void ; annulment | Meaning, pronunciation, translations and examples It permits the mortgagor to redeem his/her property upon the payment of the obligations to the mortgagee. Defeasance . What are its legal implications in real estate? 2 Salk. What made you want to look up defeasance? de fea sance: noun: 1. The IRS acknowledged deductibility of the defeasance costs in Rev. Can you spell these 10 commonly misspelled words? Publishers 1998, 2000, 2003, 2005, 2006, 2007, 2009, 2012, a condition on the performance of which a deed or other instrument is. What is a defeasance clause? Chatham can partner with you … This condition is known as the defeasance because it defeats or undoes the bond. Defeasance clause. Defeasance Definition. Provision guaranteeing the return of title to a mortgagor upon satisfaction of a mortgages conditions and terms. Dictionary.com Unabridged Defeasance refers to the substitution of collateral in a loan agreement. Alert. Defeasance Clause: The Definition and Its Implications. b. Test Your Knowledge - and learn some interesting things along the way. Acceleration clause The acceleration clause is the clause in a mortgage or trust deed that stipulates the entire debt is due immediately if the mortgagee defaults under the terms of the contract. Every commercial real estate defeasance involves multiple parties with varying interests so it's important for you to have experts on your side." Borrowers looking to refinance, sell, or value a property often have fixed-rate loans that carry a defeasance or prepayment penalty. Clause used to defeat or cancel a certain right upon the occurrence of a specific event (e.g., on final payment, words of grant in a mortgage are void and the mortgage is thereby cancelled and title is revested to mortgagor). Definition: The defeasance clause is a required contract provision that ensures that the title for the property is transferred to the buyer, once the mortgage is fully paid off. Related Rules . The mortgage will expire upon performance of the promises made by the mortgagor & allows him to REDEEM THE PROPERTY when mortgage is satisfied. History and Etymology for defeasance Middle English defesaunce, borrowed from Anglo-French defaisaunce, defesaunce "undoing, ruin, annulling of a document, condition in the document activating the annulment," from defesaunt, present participle of defaire, desfaire "to undo, put an end to, destroy, nullify" + -aunce -ance — more at defeat entry 1 There are many different clauses that can come up in regards to a loan. Defeasance means substituting one piece of collateral for another. Accessed 9 Dec. 2020. Learn a new word every day. Defeasance The setting aside by a borrower of cash or bonds sufficient to service the borrower's debt. Defeasance Clause: A provision of a mortgage—an interest in land given to a mortgagee-lender to secure the payment of a debt—which promises that the mortgagor-borrower will regain title to the mortgaged property when all the terms of the mortgage have been met. A rendering void; an annulment. What Is The Difference Between “It’s” And “Its”? The voiding of a contract or deed. The defeasance clause is a provision that states when the borrower satisfies the terms of his or her contract that the title to the property will his or hers. A clause within a contract or deed providing for annulment. Very few states still allow the defeasance clause as part of the mortgage. "It's a financial and legal transaction that has many moving parts. comments The defeasance clause arose out the English common law. While that definition sounds simple enough, the defeasance process itself can be quite complicated. 'Nip it in the butt' or 'Nip it in the bud'? Definition of "Defeasance clause" Geomary Bengochea, Real Estate Agent AmeriTeam Realty. Based on the Random House Unabridged Dictionary, © Random House, Inc. 2020, Collins English Dictionary - Complete & Unabridged 2012 Digital Edition the kind of gross misconduct that could result in the, Post the Definition of defeasance to Facebook, Share the Definition of defeasance on Twitter. 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