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Why Do “Left” And “Right” Mean Liberal And Conservative? Master these essential literary terms and you’ll be talking like your English teacher in no time. 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. 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. Definition of "Defeasance clause" Geomary Bengochea, Real Estate Agent AmeriTeam Realty. Rul. 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. There are many different clauses that can come up in regards to a loan. In securities trading, where a clearing house becomes counterparty to each side of a trade, after the trade has been agreed. Defeasance refers to the substitution of collateral in a loan agreement. A rendering void; an annulment. What is a defeasance clause? Causes the discharge of a mortgagees estate interest in a property. 1. What Is An Em Dash And How Do You Use It? How does it work or how can it affect the title to a property? 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. This can include penalties for prepayment should the loan come with them. The mortgage will expire upon performance of the promises made by the mortgagor & allows him to REDEEM THE PROPERTY when mortgage is satisfied. The securities are pledged to the lender, who releases the real estate from the mortgage. 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. What Is The Difference Between “It’s” And “Its”? the kind of gross misconduct that could result in the, Post the Definition of defeasance to Facebook, Share the Definition of defeasance on Twitter. 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. Clause is the term used to identify a certain section of a contract or policy. Article describing the method to legally extinguish debt. 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 The Dictionary.com Word Of The Year For 2020 Is …, “Affect” vs. “Effect”: Use The Correct Word Every Time. Based on the Random House Unabridged Dictionary, © Random House, Inc. 2020, Collins English Dictionary - Complete & Unabridged 2012 Digital Edition defeasance clause - Translation to Spanish, pronunciation, and forum discussions Summary. Which word describes a musical performance marked by the absence of instrumental accompaniment. Please tell us where you read or heard it (including the quote, if possible). 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. Dictionary.com Unabridged 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. A rendering void; an annulment. 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. Learn a new word every day. defeasance synonyms, defeasance pronunciation, defeasance translation, English dictionary definition of defeasance. It occurs when cash or bonds equivalent to a borrower’s debt is substituted for the collateral and used to service the debt. What made you want to look up defeasance? Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free! "It's a financial and legal transaction that has many moving parts. The voiding of a contract or deed. Definition. a collateral deed or other writing embodying such a condition. Describe 2020 In Just One Word? b. 2 Salk. “Epidemic” vs. “Pandemic” vs. “Endemic”: What Do These Terms Mean? Defeasance 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. 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. n. 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. Defeasance of municipal bonds. Defeasance also means the act of rendering something null and void. Section 13.1.Option to Effect Legal Defeasance or Covenant Defeasance. Can you spell these 10 commonly misspelled words? Chatham can partner with you … A provision or condition upon which a right or interest is terminated. Defeasance - definition of defeasance by The Free Dictionary. Only required clause in a mortgage. It must be of a thing defeasible, and all the conditions must be strictly carried out before the defeasance can be consummated. The clause may also detail additional information. 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. 2. Defeasance is a provision that voids a bond or loan when the borrower sets aside cash or bonds sufficient enough to service the borrower's debt. Defeasance often renders a loan void given that the borrower sets aside sufficient cash to offset the outstanding debt. 2. Defeasance is a substitution of collateral. Every commercial real estate defeasance involves multiple parties with varying interests so it's important for you to have experts on your side." A protagonist is the main character of a story, or the lead. 64. comments The defeasance clause arose out the English common law. Defeasance . It permits the mortgagor to redeem his/her property upon the payment of the obligations to the mortgagee. It is also referred to as "defease." Defeasance Definition. An instrument which defeats the force or operation of some other deed or estate. Allows income from the mortgaged property to be applied to the mortgage payments should they become delinquent. Defeasance clause Definition. 'All Intensive Purposes' or 'All Intents and Purposes'? Accessed 9 Dec. 2020. 2. a. Test Your Knowledge - and learn some interesting things along the way. Defeasance definition: the act or process of rendering null and void ; annulment | Meaning, pronunciation, translations and examples 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. 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. Defeasance The setting aside by a borrower of cash or bonds sufficient to service the borrower's debt. Provision guaranteeing the return of title to a mortgagor upon satisfaction of a mortgages conditions and terms. A clause within a contract or deed providing for annulment. The voiding of a contract or deed. Defeasance Clause: The Definition and Its Implications. For investors borrowing money to purchase commercial real estate, having a defeasance clause in the loan documents is a fact of life in finance. © William Collins Sons & Co. Ltd. 1979, 1986 © HarperCollins Defeasance. The IRS acknowledged deductibility of the defeasance costs in Rev. Defeasance Clause Law and Legal Definition. "Defeasance is a complex process," said Jack Rose, Chief Strategist at Breakwater Equity Partners. The defeasance clause is … Defeasance clause Defeasance clause; Defeasance clause Definition. Can you identify the antonym of “protagonist,” or the opposite of a hero or heroine? What are its legal implications in real estate? “Defeasance.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/defeasance. Related Rules . 575 Willes, 108; and vide Carth. 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. 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). Receivership clause. A clause within a contract or deed providing for annulment. Alert. Full Definition of Defeasance. Defeasance Clause Definition. Borrowers looking to refinance, sell, or value a property often have fixed-rate loans that carry a defeasance or prepayment penalty. That, which in the same deed is called a condition, in another deed is a defeasance. 'Nip it in the butt' or 'Nip it in the bud'? Every defeasance must contain proper words, as that the thing shall be void. This condition is known as the defeasance because it defeats or undoes the bond. Define defeasance. DEFEASANCE, contracts, conveyancing. b. We Asked, You Answered. While that definition sounds simple enough, the defeasance process itself can be quite complicated. Defeasance definition, a rendering null and void. Defeasance Clause: A mortgage provision indicating that the borrower will be given the title to the property once all mortgage terms are met. Delivered to your inbox! The borrower uses proceeds from a refinance or sale to purchase securities. 85-42, which addressed "in-substance defeasance." Defeasance means substituting one piece of collateral for another. See more. Both the borrower's debt and the offsetting cash or bonds are removed from the balance sheet. Build a city of skyscrapers—one synonym at a time. Very few states still allow the defeasance clause as part of the mortgage. 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