defeasance

American  

[dih-fee-zuhns] / dɪˈfi zəns /

noun

Law.

1. a rendering null and void.

2. a condition on the performance of which a deed or other instrument is defeated or rendered void.

3. a collateral deed or other writing embodying such a condition.

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defeasance British  

/ dɪˈfiːzəns /

noun

1. the act or process of rendering null and void; annulment

2. 1. a condition, the fulfilment of which renders a deed void

   2. the document containing such a condition

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Other Word Forms

• nondefeasance noun

Etymology

Origin of defeasance

1400–50; late Middle English defesance < Anglo-French defesaunce, Old French defesance, equivalent to desfes- (past participle stem of desfaire to undo; defeat ) + -ance -ance

Example Sentences

This is a standard practice in the Danish mortgage system; it could be done in the U.S. by creating a “defeasance” account at settlement to pay the remaining monthly payments on the existing mortgage on time and in full.

From The Wall Street Journal

The federal government appoints a financial agent—the Treasury or the Department of Housing and Urban Development—to manage mortgage defeasance accounts.

From The Wall Street Journal

The defeasance manager provides the seller or settlement agent with a fair-market valuation of the remaining payments on a home’s outstanding mortgage, determined using the current market prices of a portfolio of Treasury securities.

From The Wall Street Journal

The defeasance account manager collects this market value at settlement, and invests the proceeds in the appropriate U.S.

From The Wall Street Journal

The defeasance agent’s guarantee to remit the remaining mortgage payments to the mortgage servicer on time and in full substitutes for the home seller’s liability.

From The Wall Street Journal