Defeasance Clause

You'll feel indescribable freedom and joy when you finally pay off your home mortgage or a large college loan debt. In the case of real estate, the final payment of a mortgage entails a defeasement clause, which delineates the process and details for conferring official title to the property away from the mortgage institution and to the official owner.

In the majority of cases, this is perfunctory and not necessary, but certain state laws include them for specificity if an asset other than cash is used for the balance of a mortgage, which the lender deems acceptable.