Defeasance Clause

A mortgage provision indicating that the borrower will be given the title to the property once all mortgage terms are met. The defeasance clause is not required in states using property liens as collateral for a mortgage. In this sense, the clause is a substitute for collateral.

Most states allow property liens when mortgages are issued, and don't follow the common law theory requiring a defeasance clause. In real estate, a lien gives the mortgagee the right to foreclose the property upon default of the terms in order to recoup what was owed.

Investment dictionary. . 2012.

Look at other dictionaries:

  • 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.… …   Law dictionary

  • defeasance clause — That provision in a mortgage which assures the revesting of title in the mortgagor when all the terms and conditions of the mortgage have been met. A clause which permits the mortgagor borrower to defeat the temporary and conditional conveyance… …   Black's law dictionary

  • defeasance — de·fea·sance /di fē zəns/ n [Anglo French defesance, literally, undoing, destruction, from Old French deffesant, present participle of deffaire to destroy, undo see defeat] 1 a: a condition (as in a deed or will) that upon fulfillment terminates… …   Law dictionary

  • defeasance — /dafiyzans/ An instrument which defeats the force or operation of some other deed, estate, or will. A collateral deed made at the same time with a feoffment or other conveyance, containing certain conditions, upon the performance of which the… …   Black's law dictionary

  • defeasance — [dē fē′zəns, difē′z ns] n. [ME & Anglo Fr defesaunce < OFr defesance < defesant, prp. of defaire, desfaire: see DEFEAT] 1. the annulment of a contract or deed 2. a clause stating a condition the fulfillment of which makes the deed, contract …   English World dictionary

  • defeasance — The clause of a mortgage intended to define the terms and conditions upon which the mortgage shall be satisfied, cease to be security for a debt, and become void. First Nat. Bank v Bain, 237 Ala 580, 188 So 64. More generally defined as a clause… …   Ballentine's law dictionary

  • defeasance — /dɪ fi:z(ə)ns/ noun a clause (in a collateral deed) which says that a contract or bond or recognisance will be revoked if something happens or if some act is performed …   Dictionary of banking and finance

  • Оговорка об аннулировании — (defeasance clause) – статья в закладной, согласно которой заемщику залогодателю возвращается чистый титул после того, как выполнены все условия займа, включая погашение …   Словарь терминов по экспертизе и управлению недвижимостью

  • chattel mortgage — An instrument whereby an owner transfers title to, or creates a lien upon, personal property as security for the performance of an act, which is usually the payment of money, with the title or lien subject to defeasance upon performance. 15 Am… …   Ballentine's law dictionary

  • bond — A certificate or evidence of a debt on which the issuing company or governmental body promises to pay the bondholders a specified amount of interest for a specified length of time, and to repay the loan on the expiration date. A long term debt… …   Black's law dictionary

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