defeasance clause

Definition

A mortgage provision stating that the lender's title interest terminates once the loan is fully repaid. It's the legal version of 'when you pay me back, I promise to stop owning part of your house.'

Example Usage

Thanks to the defeasance clause, the bank released the lien immediately after our final mortgage payment cleared.

Origin

From Old French 'desfaire' meaning 'to undo,' established in medieval English property law

Fun Fact

In title theory states, the lender actually holds legal title to your property until the defeasance clause is triggered by full repayment.

Source: American Bar Association real property law documentation

Related Terms

Intermediate

subject property

The specific property being appraised, analyzed, or discussed, as opposed to all those comparison properties. It's like referring to the guest of honor at a party—everyone else is just there for context.

🏠 Real Estate

Intermediate

credit repair scam

Predatory services promising to magically fix credit scores for upfront fees, usually doing nothing illegal that borrowers couldn't do themselves for free. It's the housing market's equivalent of those 'lose weight without diet or exercise' ads.

🏠 Real Estate

Beginner

dead deal

A transaction that has collapsed spectacularly, usually after everyone involved has invested weeks of time, hope, and paperwork. The real estate equivalent of a relationship that was 'totally going somewhere' until it wasn't.

🏠 Real Estate

Advanced

partition action

A lawsuit filed by a co-owner to force the sale or physical division of jointly owned property when owners cannot agree on management or disposition. It's the legal sledgehammer for splitting property when co-ownership goes toxic.

🏠 Real Estate

Intermediate

rent control

Government-mandated caps on rent increases, beloved by tenants and blamed by landlords for everything from peeling paint to climate change. Economics' most passionate debate in apartment form.

🏠 Real Estate

Beginner

auction

A socially acceptable form of gladiatorial combat where participants wave paddles and bankrupt themselves in public, all for the thrill of outbidding strangers. The highest bidder wins the dubious honor of paying more than everyone else thought something was worth. Popular in real estate, art, and estate sales where dead people's stuff finds new homes.

🏠 Real Estate

Translate This Term

See “defeasance clause” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

Try the Translator

Share This Term

Post on X Share on Facebook Share on LinkedIn

Discover a Term

Beginner

ttyw

talk to you whenever...